The Labor Ministry is hoping for annual revenues of 300 million euros through the utilization of reserves of social security funds, which along with their real estate assets, add up to 18.9 billion euros.
The majority of the funds’ assets and reserves are placed in traditional investment options, without any professional and active management that would have helped cover part of the country’s fiscal obligations and avoid a bigger cut to pensions.
Although social security experts argue that the reserves of the funds would in no way cover their financing deficit or resolve the sector’s problems, the ministry aspires to include in the upcoming social security reform provisions that would allow for annual returns of 300 to 500 million euros.
While still in opposition, the two governing parties were usually against the placement of the funds’ reserves in the money and capital markets, but they are now turning to active and professional management of the reserves through the merger of the funds’ mutual fund management companies with their investment capital management companies. Sources say they also plan to set up a company to invest in real estate by taking up all of the funds’ property assets.