By Vassilis Ziras
The government’s effort to rationalize the provisions of auxiliary social security funds is set to begin with the slashing of the lump sum civil servants are paid upon retirement by 22.6 percent, which the state workers’ union branded a “casus belli.”
Such a decision will most likely have retroactive validity, also affecting the 52,000 state sector pensioners who have been waiting for their lump sum for up to five years.
Labor Minister Yiannis Vroutsis told representatives of the Civil Servants’ Union (ADEDY) on Thursday that “the actuarial findings regarding the pension fund are showing significant problems that render it nonviable,” suggesting that the slashing of the retirement lump sum is non-negotiable.
Vroutsis categorically ruled out the possibility of increasing social security contributions or covering the deficit through LAFKA -- the Solidarity Account for Social Security Entities -- by saying, “As a minister, I cannot tolerate funding the deficits of the fund via the state budget or by imposing taxes on citizens or forcing the new generation of workers to pay extra contributions so that the old one can receive lump sums that do not correspond to the contributions they have paid.”
Ministry data show that in the civil servants’ pension fund (TPDY), for 29 years of social security contributions, the average amount of paid contributions amounts to 29,139 euros, while the average lump sum paid is 22.67 percent higher, at 37,680 euros.
Some 1.2 billion euros from the next bailout loan tranche will go toward the lump sums of civil servants, the minister said.
ADEDY issued a statement blasting the minister’s refusal to consider any of its proposals for the sustainability of the funds, and said that the cuts will come on top of the previous 20 percent reduction already imposed on lump sums for state sector retirees. By calling the measure a “cause for war,” ADEDY signaled it would resort to strike action.
It also called on the government to demand its creditors proceed with the recapitalization of social security funds in the same way it has planned to do with banks.