ECONOMY

Pension plan attacked

Unions were scathing yesterday in their response to the government’s proposals about bank employees’ main and auxiliary pension funds. «This is a monument of sloppy work,» said the General Confederation of Greek Labor (GSEE) in a statement. OTOE, the bank employees’ umbrella union, responded with a call for a further 48-hour strike – the fourth in a row – today and tomorrow. After a meeting of the Inner Cabinet yesterday morning, Economy and Finance Minister Giorgos Alogoskoufis and Labor and Social Security Minister Panos Panayiotopoulos did not present a draft law, as expected, but merely «a general framework for a solution,» as they called it, although Alogoskoufis promised a draft bill will be submitted to Parliament «within days.» The fact that a draft law was not unveiled is probably due to differences over the exact share of the government, employers and employees in funding the new, integrated auxiliary pension fund. «Today the Inner Cabinet decided to push ahead with a major structural change for the economy; a change which affects banks’ pension funds – a problem which has troubled the banks’ pension system for many years,» Alogoskoufis told reporters. «With this structural change, mature pension rights will not be harmed. The rights of new bank workers, those hired after 1992, are being adjusted to those of all wage earners.» The draft bill consolidates the 11 existing bank employees’ auxiliary pension funds into one, funded by the banks themselves. In a bid to stay in line with EU competition rules, the new auxiliary pension fund is expected to be covered by the assets of the existing auxiliary pension funds and the banks. Bank employees hired before 1992 will not give up any pension benefits, but employees hired since then are likely to retire later and earn lower pensions, with those hired after January 1, 2005 being in the worst position. An initial plan had called for banks to provide two-thirds of the funds for the new integrated fund and the rest was to be provided by the state, but this was abandoned. The government appears to have chosen the current option amid concerns that the European Commission could see potential state participation in the funding of the new banks’ pension fund as an indirect state subsidy. All banks’ main pension funds will be merged into the private sector’s main social security system, IKA, earlier than originally envisaged – on January 1, 2006 instead of 2008. The new supplementary pension fund will be a public legal entity, meaning that the state is to assume potential future liabilities. This is a major point of contention with OTOE, which wants to maintain the fund’s independence. (Kathimerini/Reuters)