New pension fund set to be mired in deficit

New pension fund set to be mired in deficit

The new pension fund set to replace IKA – to be named the Single Social Security Fund (EFKA) – is expected to launch with a formal deficit of 2.5 billion euros despite the abolition of early retirement and snap cuts to pensions old and new. On top of that, there is also the informal deficit, which exceeds 4.5 billion euros, concerning the hundreds of thousands of retirees whose pension applications are still pending.

In addition, one mustn’t forget the internal debts of funds to the National Healthcare Service Organization (EOPYY), amounting to 2 billion euros, and IKA’s loans to the Manpower Organization (OAED) – some 3 billion euros that will probably never be returned. That brings the black hole to more than 12 billion euros – threatening to suck the new entity in from the get-go.

As explained at the start of the 32nd annual conference of the federation of social security fund employees (POPOKP) on Thursday, the deficit in the budget of the two main funds, IKA (for employees) and OAEE (for the self-employed), adds up to almost 3 billion euros for 2016 alone. The federation’s head, Antonis Kourouklis, said that if the retirees with outstanding pension applications were to receive their delayed monthly allowances now, the deficit of IKA and OAEE would have to grow by 1.5 billion euros to cover the overdue pensions and another 1.5 billion euros per year to cover the new pensions to be issued.

Kourouklis added that the delays in the processing of retirees’ applications by the merged pension funds – besides the chaos they will generate among candidate recipients who have already started physically attacking fund employees – will lead to a further deficit of 1.5 billion euros.

The period between the application for and the actual payment of a pension already ranges between 12 and 36 months, and the fund mergers, along with the labyrinth of recalculating pensions, will likely further aggravate the already difficult situation: There are already at least 350,000 outstanding applications, and their total cost is estimated at over 4 billion euros.

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