Auxiliary pensions are set for a drastic reduction following the abolition of 24 indirect taxes that raised revenues for social security funds, which is foreseen in the government’s new multi-bill.
The remaining 72 indirect taxes for such funds are also set to be revised by the end of the year, as Development Minister Costis Hatzidakis clarified this week, which would inflict a further blow on the pensions old and new pensioners receive.
“These contributions will be gathered in one account at the Finance Ministry, which will distribute them according to the needs of each fund. No social security fund structure will be put in danger with the incorporation of all such resources in one account,” the president of the Social Security Foundation (IKA), Rovertos Spyropoulos, said on Friday.
“As of January 1, 2014, you will get what you’ve paid for, as there will be an individual share, with no discrimination, while the system of supplementary pensions will be clear and transparent for all workers,” noted Anastasios Papanikolaou, the president of the Single Auxiliary Social Security Fund (ETEA).
Although the Labor Ministry officially estimates that the loss of resources will not cost funds any more than 120 million euros, estimates by the Labor Institute of the General Confederation of Greek Labor (INE/GSEE) raise that loss to about 1.7 billion euros and see the reduction to auxiliary pensions at 25 percent within 2014.