Pension payment to be ‘a little tight’ in March

Reality has hit the new administration of the Health Ministry, as one day after the storm of pledges for improvements to the social security system, the officially registered deficit of the country’s social security funds for 2015 comes to 1.5 billion euros, and is expected to top 2 billion if the “zero-deficit clause” for funds is abolished.

The funds’ fragile balance is reflected in the general government figures for the period from January to November 2014: They show that the cash flow of pension funds dropped from 2.155 billion euros in November 2013 to just 435 million in November 2014, a decline of 79.8 percent.

Furthermore, figures from the Helios database show that pension costs for this month alone come to almost 2.34 billion euros, despite the reduction in the number of recipients. The decrease in fund revenues in the last few months of 2014 – despite debtors’ positive response to the 100-installment settlement plan – has added to the system’s woes.

All this has worried the new general secretary for social security, Giorgos Romanias, who stated on television on Thursday that while there will be no problems in the payment of pensions in February, things will be “a little tight” in March. He added that a solution would be found before then.

The major concern generated by that statement drew an intervention by Alternate Social Security Minister Dimitris Stratoulis, who stated that the new government guarantees pensions, that any problems that may arise will be dealt with, and that pensions will not be subjected to further cuts.

Romanias himself tried to appease pensioners a little later, stating that “there is not even one chance in a million” that pensions will be reduced or not paid. There was a similar effort at appeasement by Alternate Finance Minister Dimitris Mardas, who said that the General Accounting Office figures indicate there is no problem with pension payments.

What Romanias had originally been trying to address was the very headache that all people responsible for the future of social security in recent years have suffered from. The considerable drop in state funding, the dramatic rise in unemployment and the decline in salaries have reduced the revenues of social security funds, so that most of the time the timely payment of pensions is only achieved at the last minute.

For instance, it was only two days ago that OAEE, the fund of the self-employed, managed to collect the necessary 255 million euros for the payment of February pensions, due on February 1. The Social Security Foundation (IKA) resorted to its monthly practice of borrowing 100 million euros from the pension funds of civil servants and of municipal employees, and has even turned 150 million euros of bonds it holds into repos in order to cover the sum of 250 million euros it needs for February.