ECONOMY

No urgency to merge funds

Employment Minister Savvas Tsitouridis is not in a hurry to implement the merger of the seven main pension funds into the Social Security Foundation (IKA), but will take time to consult with unions, he told a delegation from the General Confederation of Greek Labor (GSEE) yesterday. A law voted by the previous, Socialist government in 2002 makes this merger, as well the one among 27 auxiliary pension funds, mandatory. Tsitouridis reassured the GSEE delegation that the government would stand up to EU pressure to bring women’s retirement age into line with that of men. Employment Ministry officials estimated that Greece has another eight years to debate the issue with EU officials, even if the European Commission decides to bring the case before the European Court. Tsitouridis tried to convince GSEE to contribute toward preventing people from taking early retirement. He told them that this was often done because of fears that, by delaying their retirement, they might see their pensions eroded further. «Those who take early retirement can only lose out» in terms of pensions, Tsitouridis said. GSEE, on its part, expressed its satisfaction that Tsitouridis had committed himself to a full round of consultations with both employers and employees beyond the strict timeline – three months – imposed by the 2002 law and also that he had promised that state liabilities to IKA’s auxiliary pension fund would be fully settled by the end of 2007. Tsitouridis has promised IKA that government funding will increase to 1.9 billion euros per year and that the government will begin to repay its old debts to IKA from February. Bonds will be issued to cover part of the payment. Both the size of government debt to IKA and the pension fund mergers are contentious points. The GSEE officials told Tsitouridis that the state owes pension funds some 22 billion euros, an estimate that is likely to be several times over what the government itself estimates. The unionists also said that they would fight any attempt to unify pension funds or merge them into IKA by force. A law from 1992 provides that pension funds facing bankruptcy are automatically merged with IKA. The airline employees’ fund was merged into IKA in January 2002 and, recently, Tsitouridis decided to do the same with the electricians’ fund, estimating that it will only be able to pay members’ pensions until January.