Next generations’ fund set to finance June’s pensions

The government is set to draw cash from a special fund set up for future generations to make up the amount it needs to pay supplementary pensions this month. The Labor Ministry, meanwhile, has been upping pressure on social security funds to hand over their cash reserves.

Alternate Minister for Social Security Dimitris Stratoulis will be signing a decision allowing the government access to the cash of the Insurance Fund for Solidarity between Generations (AKAGE), with the aim of injecting 50 million euros of liquidity into the Single Supplementary Social Security Fund (ETEA).

The need to collect a total of 2.3 billion euros by end-May to pay the June pensions of all social security funds is pressing and the ministry is holding successive meetings with fund chairmen and other officials to scrape together the cash needed for 2.6 million recipients.

Despite a significant increase in salaried employment – as recorded by the ministry’s Ergani registration system – the picture of pension fund revenues is far from promising. The only hope of boosting coffers is from the settlement of debts, which is progressing at a satisfactory rate. The ministry must also address the growing deficit at Greece’s funds, which is expected to reach 2.9 billion euros by end-2015.

Most of June’s pensions are supposed to be paid next Friday, May 29, with the rest due on June 2.

After the strong reaction from opposition parties to an ETEA proposal for cashing a bond at a 25 percent loss and its subsequent withdrawal by Stratoulis, the ministry has been looking for ways to come up with the cash needed to cover ETEA pensions.

Beyond the 50 million from AKAGE, the ministry will also require other pension funds to return some of the 1 billion euros they owe ETEA.

An emergency meeting has been scheduled for Friday at the Labor Ministry with the participation of ETEA Chairman Thanassis Kapotas to discuss this issue.

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