Turkish gov’t says no compromise on retirement ages

ANKARA (Reuters) – Turkey’s government will not compromise on plans to raise the retirement age despite protests from trade unions, Labor and Social Security Minister Faruk Celik told Reuters yesterday. Celik said he hoped parliament would pass the social security reform bill, which the International Monetary Fund has sought, by the end of March and that its main elements could begin to be implemented in late August or early September. «It is a bill on our immediate agenda. It could come to the parliament (floor) this week or next week. All our efforts are aimed at passing it in March,» he said in an interview. Passage of the reform is a condition set by the International Monetary Fund for approving a new loan tranche of $1.3 billion. Celik made clear the government would not modify the plans to raise Turkey’s retirement age to 65. The current rate for men is 48 and for women is 44, but Turkey has decided to raise them gradually to 58-60 under a previous reform. «It will be 65 after 2036. The main pillar of this reform is built on the retirement age,» he said. The government says the current social security system is unsustainable after the deficit hit 4 percent of gross domestic product in 2007. It says the changes will come into force gradually. Turkish workers protested against the reform last Friday with a two-hour work stoppage. Trade union leaders warned of worse industrial action to come if the pro-business Justice and Development Party (AKP) government did not heed their demands and make changes. «There are efforts being made to sacrifice social security reform… We will not let this happen,» Celik said. Lower deficit A simplified administration and tighter inspections of businesses are expected to raise social security premiums by between 4 billion ($3.14 billion) and 5 billion lira, he said. «The deficit will be less this year,» Celik said, declining to give an exact estimate for the deficit in 2008 because it was too early. The deficit was 25.04 billion lira in 2007. The social security institution (SGK) is owed 42 billion in total and Turkey has to improve its finances, he said. He said 60 percent of all employees were registered as minimum-wage earners when this should be 20 percent in reality. «We will try to get as much revenue as possible from these dossiers (of unpaid premiums). We are expecting a serious sum from this,» he said. The current revenues of the social security institution were not enough to make payments for pensioners and hospitals, he said. «The premiums meet only 82 percent of pension payments. We have to improve this quickly,» he said. Celik said the government will also press ahead with a five percentage point cut to 28 percent in social security premiums under an employment incentives package, but only businesses with no debt to the government would benefit. The employment package would include measures for a more flexible labor market such as facilitating part-time work and empowering private employment agencies.

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