ECONOMY

Pressure over pension fund decisions

pressure-over-pension-fund-decisions

Under  pressure from a large nationwide strike on Thursday – primarily opposing the planned reform of the social security system – and with tensions growing within the government, Labor Minister Giorgos Katrougalos will have to present within the week (probably on Friday) his final proposals for the system’s overhaul.

The mixture of cuts and contributions required for the new model to lead to a sustainable system in fiscal and actuarial terms is currently being projected on the smaller pension funds, after the completion of the actuarial and fiscal studies at the main funds (IKA, OAEE, OGA).

Even without having completed the first batch of prior actions, the government will therefore have until the end of the week to decide on the main features of the social security reforms that constitute part of the second batch and need to be drafted and ratified by Parliament by end-November.

The mix is explosive in that the planned changes, including fund mergers, will lead to pension cuts. No one can tell what the exact size of these cuts will be but it is feared they may reach as much as 20 percent in some cases.