Pension bomb threatens to blow

Pension bomb threatens to blow

A hidden deficit of 8 billion euros is threatening to torpedo the government’s fiscal planning and bring down the country’s social security funds.

More than 300,000 applications for pensions are pending, representing total expenditure of 4 billion euros. The waiting time ranges between 12 and 24 months, while in certain cases it comes to three or four years.

Another problem for the Labor Ministry is the government’s obligation to determine and legislate a number of measures that would offset the impact of the Council of State’s decisions against pension cuts since 2012, estimated at 2 billion euros at least. In fact, social security experts argue that the cost of implementing the court verdicts may rise to 4.2 billion.

On top of this hidden debt, which is not officially recorded, one should add the debts of the pension funds to the EOPYY healthcare organization, amounting to 1.7 billion euros, as well as contributions to the former Labor Housing organizations (totaling 327.2 million euros), which are still paid by workers but are not forwarded to the organizations by the social security funds.

The data that pension fund employees presented on Thursday at their 31st annual conference are particularly timely, coming just a few days before the presentation of the government plan on the social security system’s new structure. This will have to absorb all of the above deficits.

The pension fund workers’ union estimates that outstanding applications for pensions amount to 327,000, with 43,500 of the applicants having just received temporary pensions. Almost half of the pending applications concern the Social Security Foundation (IKA), numbering 141,644 approved pensions that are yet to start being paid.

The fund of the self-employed (OAEE) has a backlog of 33,000 applications, with 9,500 temporary pensions issued, while the farmers’ fund (OGA) has 30,000 outstanding applications.