A plan nobody wants to fail

Government, bankers and bank workers yesterday continued deliberations over a bank-authored plan to tackle the pressing problem of overhauling the sector’s pension system. The overhaul is considered essential for banks’ financial health and seen as a prelude to a wider reform of the country’s social insurance system. Economy Minister Giorgos Alogoskoufis met the board of the Hellenic Banks Association (HBA) for a discussion of the plan – unofficially put forward by Piraeus Bank president Michalis Sallas last week and sponsored by HBA – which envisages roughly equal bank and government contributions to a unified auxiliary pension fund. «The HBA plan is a basis for discussion. There are many difficulties and peculiarities for each bank,» said HBA president Yiannis Costopoulos. The issue is pressing because banks’ actuarial liabilities toward their employees’ auxiliary pension funds – and which, according to the International Accounting Standards due for implementation next year, will have to be deducted from their equity capital – are so large that a number of them, notably Emporiki, are in danger of collapse. This evidently holds wider implications for the banking system and the stock market. Sources said Alogoskoufis intends to clarify his position after a meeting with union leaders next week. In a press briefing, Federation of Bank Employees (OTOE) Dimitris Tsoukalas welcomed the Sallas plan as the first development toward a comprehensive solution and urged HBA to submit it officially so that a dialogue could begin. However, he indicated that a number of points in the unofficial draft that «would have to be lifted for an agreement to be reached,» notably the lack of a special funding provision for the transfer of the 18,000 bank workers’ main pensions to the Social Security Foundation (IKA). Separately, European Environment Commissioner Stavros Dimas said early retirement provisions would have to be scrapped as elsewhere in Europe, and that it was unacceptable for the Greek taxpayer to subsidize the cost of the scheme.