SEV joins the fray on pension fund scandal
The Federation of Greek Industries (SEV) yesterday joined in the fray on the issue of the mismanagement of public pension fund reserves, saying that administrative and political responsibilities were necessarily intertwined, and that the problem undermines the dialogue for much-needed pressing reform of the country’s social security system. «SEV has long raised the issue of the management of pension fund reserves and all welfare funds in general… as a basic prerequisite for the viability of the social security system,» SEV President Dimitris Daskalopoulos said. The statement came in the midst of the continuing uproar concerning the sale last month of an overpriced bond to the Civil Servants’ Auxiliary Pension Fund (TEADY) by the Akropolis brokerage, and has caused the government considerable embarrassment. As the head of pension funds are traditionally government appointees, critics’ fire has been mainly directed against Labor Minister Savvas Tsitouridis. The Capital Market Commission, the securities regulator, has revoked the Akropolis brokerage’s trading license, saying that it «acted to the detriment of its client, resulting in the client suffering a substantial loss.» Daskalopoulos said the issue proved that employers’ and employees’ social security contributions occasionally became prey to dubious transactions and undermined the dialogue for reform. He said SEV favored the joint management of pension funds by employers and employees, with an emphasis on bonds. «In the modern economy and management such solutions are available; they are simple and tested. Let’s be bold enough to apply them… Wherever there are administrative responsibilities, there are also political ones, at least as regards the appropriate and urgent solutions,» Daskalopoulos said. Separately, stockbrokers and institutional investors yesterday asked Tsitouridis to be allowed to participate on the special committee studying a reform of the legal framework governing the management of pension funds’ reserves. The Stockbrokers’ Association (SMEHA) said the pension funds should be administered by professional managers who should be selected annually. It said that blanket criticism against stockbrokerages was unfair. Tsitouridis countered criticism by saying that he was under attack because he favored the opening up of the huge market of pension funds to as many participants as possible.
