ECONOMY

Pension funds in ‘danger’

Many social security funds will go bust by 2014, says the Labor Institute of the General Confederation of Greek Labor (GSEE) and the Civil Servants’ Union (ADEDY). It is more than likely that many pensioners will be unable to receive their pensions after five years, unless there are fresh injections of funding into the social security systems, warns Savvas Robolis, the Labor Institute’s scientific director. The global economic crisis and the government’s strict adherence to fiscal discipline, which do not allow for the support of the system from the budget, are canceling out the demographic and actuarial studies that guaranteed the viability of the Social Security Foundation (IKA) until 2023 and of all funds until at least 2017. The changes in revenues are considerable and are already reflected in IKA, where the evasion of contributions has broken the 7-billion-euro mark. Furthermore, in the first months of this year, uninsured workers have increased by 15 percent and the delay in contributions reaches 25 percent. Moderate estimates suggest that even a rise in the number of those unemployed by 80,000 will signify a loss of revenues of 450 million euros. This is at a period when IKA will need an extra 2 billion euros to cover the pensions of the funds that have been merged with it, those of the Public Power Corporation (PPC) and OTE telecom. The budget support to IKA for this end does not exceed 1.2 billion euros. In this tight climate, the Employment Ministry appears ready to forfeit on recent assurances about abolishing favorable adjustments for the repayment of overdue social security contributions.