Auxiliary pensions to drop further

By Christina Kopsini

The so-called “zero deficit clause” agreed between the Greek government and its international creditors to apply to social security funds from this summer, is bringing fresh cuts to auxiliary pensions.

The application of the clause is set to save the funds some 464 million euros, plus another 115.5 million from the reduction of the resources returned to the insured by the end of the Medium-Term Program of Fiscal Strategy for 2014-2018. Most of the 580 million to be saved will derive from the reduction of auxiliary pensions.

The first cuts will be imposed on the beneficiaries of the Single Auxiliary Social Security Fund (ETEA), which covers some 4 million people and will have to activate the clause from July 1.

Changes are also due to main pensions, so that their reduced amount from 2015 onward will offset the loss of resources estimated at 974 million euros by 2018, due to the reduction in social security contributions as of July 1. The recently revised bailout agreement calls for the drafting of a plan for the merging of funds by the end of June.