ECONOMY

Gov’t to unveil social security reform blueprint

The government’s long-awaited blueprint for social security reform, due to be unveiled this week, provides for a drastic reduction through mergers in the number of pension and auxiliary funds, from 92 to 13. Observers say the new scheme is likely to be transitional, until the next phase of mergers, whenever that may be. But the picture of the impending overhaul is quite complex and its success or failure will be seen when it becomes operational. The changes mainly focus on the private sector, as they do not touch the basic structure of public servants’ and farmers’ main and supplementary funds. The retirement age for most private sector employees, who are insured with the Social Security Foundation (IKA), goes up from 58 to 60, with 35 years of work. A minimum of 100 days’ work annually is required for entitlements, except for builders, for whom the minimum is 80 days. The bill also provides for stronger incentives for delaying retirement, while women with underage children will have to work longer before retiring. A supplementary provision entitles young mothers to one year’s leave with basic pay. The measure is expected to be opted for by no more than 10 percent of low-paid working women. The five main funds of workers in the media will be united into one. Another fund will result from the merger of those covering lawyers, doctors and engineers. Finally, new supplementary pension funds are to set up for the private sector, public utilities and banks, as well as the security forces.