ECONOMY

Gov’t ‘planning to merge scores of pension funds’

The Greek government will merge scores of pension funds into about four to six main funds as part of its plans to overhaul its ailing security system, a senior government official said yesterday. A first round of talks with unions collapsed and the government is preparing new proposals, seen as less drastic than those that brought thousands on to the streets at the end of last year. «As part of reforms we will create four to six main funds which all existing funds will join, and about four auxiliary funds,» the official, who declined to be named, told Reuters. «The exact number of funds has yet to be decided.» Greece’s fragmented social security system now includes more than 150 main, auxiliary and health funds. Experts say their actuarial deficits could balloon to -400 billion, almost twice the size of Greece’s economy. Unions have accused the government of making a U-turn since winning a second four-year term in September, pledging not to raise the retirement age, cut pensions or raise contributions. They say the funds are victims of the state, which has dipped into them for decades and refuses to pay its own contributions. The official said the new plan included raising the age limit in some jobs. «In some special categories of early retirement, the age limits will rise to a target of 60 years of age. This will not be done abruptly but gradually,» the official said. «The general age limits – 65 for men and 60 for women – will not be changed.» The main thrust of the new plan is to convince rather than force people to stay at work more years. «One of the main changes will be the introduction of counterincentives against early retirement and incentives for those who wish to work beyond their retirement age,» he said. «This way, we will make the system viable.» Greek Prime Minister Costas Karamanlis is scheduled to present the government’s proposals on pension reforms to Parliament on February 15. Unions plan a nationwide strike on February 13. (Reuters)