Bankers edge closer to common stand on employees’ pension fund

Greece’s top bankers yesterday appeared to edge closer to a common position on their contribution to the integration of banks’ main and auxiliary pension funds, a thorny problem that has become pressing due to the application of international accounting standards (IAS) in next year’s financial statements. «We are close to a solution which will form the basis for next week’s meeting with bank employees’ unions,» an official told reporters after a meeting between bankers and Economy and Finance Minister George Alogoskoufis. The problem has become pressing because banks’ unfunded pension liabilities, which, according to IAS, will have to be written down on their balance sheets, are so large that a number of them, particularly Emporiki, will see their capital base seriously dented. The integration of the auxiliary funds poses the biggest problem, as their actuarial liabilities have been estimated at 4.7 billion euros. A plan unofficially put forward by Piraeus Bank President Michalis Sallas two weeks ago envisaged roughly equal bank and government contributions of 2 billion euros each to a single auxiliary pension fund, but the government has been keeping a discreet distance, saying it will contribute only in proportion to the size of the state’s stakes in the banks, and urging them to come to an agreement with bank employees’ unions first. The Sallas plan provides for the merging of the bank employees’ main pension fund with the Social Security Foundation (IKA), the country’s largest. The bank employees’ union (OTOE) has welcomed the plan as a basis for discussion but one of the conditions it sets is adequate funding provision for the transfer of its 18,000 members’ main pensions to IKA. A solution has been further complicated by misgivings about the Sallas plan by banks themselves, notably the National Bank of Greece (NBG) – the country’s largest – whose president, Takis Arapoglou, suggested last week that an integrated auxiliary fund be preceded by an ironing-out of the problems of each individual bank fund first. Alpha Bank Chairman Yiannis Costopoulos told reporters that «the differences (in views) are getting smaller.» But he did not specify whether this was among banks themselves or between banks and the government. Sources said, however, that NBG’s misgivings appeared to be mellowing and that it may consent to a modified Sallas plan next week. The bankers are due to meet Nicholas Garganas, governor of the Bank of Greece, on Monday to discuss the issue and that of the implementation of IAS. OTOE officials, in turn, will meet the bankers and Alogoskoufis on Tuesday and Wednesday respectively.