Big cuts in auxiliary pensions

The controversial draft law for the merging of auxiliary social security funds into a single entity provides for a considerable slashing of auxiliary pensions. However, the finalization of its key terms has been postponed until after the next election.

The creation of the Single Auxiliary Social Security Fund (ETEA) will entail the reduction of auxiliary pensions from problematic funds by between 15 and 40 percent, although this remains an issue of political debate within the government. The draft law also promotes the merging of the assets owned by the auxiliary funds and the creation of a new capitalizing system.

The bill, which remains at the Labor and Social Insurance Ministry due to serious objections raised by New Democracy — one of the parties supporting the transition government of Lucas Papademos — also forwards any decisions on social security contributions and resources, the conditions for retirement and other details about the fund?s operation to the next government.

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