ECONOMY

Government unveils IKA reform bill

The government yesterday unveiled a bill aimed at modernizing the country’s largest social security fund, the Social Security Foundation (IKA). The bill, drafted after talks with employer and trade union groups, will usher in computerized systems for paying contributions, reduce penalty rates on fines imposed on employers not paying dues promptly and slash the time needed to approve new pensions. Under the bill, computerized systems will keep track of pension contributions, abolishing the previous system of buying stamps. Employers from now on will be required to provide a detailed declaration, which can also be submitted via the Internet, which IKA will use to determine contributions that are owed. As of October 1, Greeks collecting their pensions from IKA will automatically receive the lowest IKA pension of 125,000 drachmas within two months of applying, with retroactive payment of sums owed. At the moment, the average time for applicants to receive their first pension payment from IKA ranges between eight and 10 months. The bill also lowers the penalties on fines for employers who are late in paying contributions. This is a significant break for businesses because interest rates have fallen, and this meant the continued system of penalty rates could not continue, said Labor Minister Tassos Yiannitsis. Prospects