A scandal involving a civil servants’ pension fund overpaying –5 million for a government bond is the result of an inadequate regulatory framework, inexperienced pension fund managers and greedy brokerages, according to Finance Minister Giorgos Alogoskoufis.

Speaking in Brussels after an ECOFIN meeting, Alogoskoufis admitted that the fee paid by the Civil Servants’ Auxiliary Pension Fund (TEADY) for a structured government bond from a broker was “excessive.”

“Some greedy brokers have taken advantage of ignorant boards and passed on to them bonds that contain risks that pension fund managers are not aware of,” said Alogoskoufis.

Many board members of pension funds are appointed by the government. This has prompted opposition parties to call for the resignation of Labor Minister Savvas Tsitouridis as his ministry is responsible for the supervision of the country’s social security funds.

The government has pledged to tighten up investment procedures for pension funds.