BUSINESS

Pension cut seen at 11 pct

ROULA SALOUROU

TAGS: Finance

The government’s alternative plan for pensions foresees an average cut of more than 11 percent on monthly payments that exceed 1,000 euros, along with the radical reform of the social security system. This will be Athens’s attempt at preventing the country’s creditors from applying in full the tough measures included in the third bailout agreement.

The plan also includes the imposition of a ceiling close to 2,000 euros on the monthly sum of pensions paid to a recipient, from 2,350 currently per Social Security Foundation (IKA) recipient, 2,774 euros in special funds and 3,360 euros to those receiving two pensions.

Labor and Social Insurance Minister Giorgos Katrougalos reiterated yesterday that only small and medium-sized pensions are secure, setting 1,000 euros as the ceiling of small pensions and 1,000-1,500 euros as the medium range.

Social security experts argue that based on the country’s bailout commitment to reduce pension expenditure by 2.25 billion euros in the next two years – with the amount for this year set at 450 million – the cuts promoted will inevitably concern current recipients of 1,000 euros or more.

Further discussions will take place concerning any cuts that affect smaller pensions.

Estimates show that if the pension cuts are imposed across the board, they will come to a 6.2 percent rate, while if they are imposed on pensions of more than 1,000 euros per month, they will amount to at least 11 percent.

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