ECONOMY

Report calls for one pension fund

The government will need to merge all employee social security funds into one in order to ensure the system’s viability, according to a report submitted to Parliament yesterday. The National Actuarial Authority (NAA), a committee appointed the task of assessing state pension funds, warned in its report that if changes are not made then the social security system will develop into a major problem for state finances in coming years. NAA’s proposals include introducing a general retirement age for workers of 65 and calculating pension payments according to the same basis for everyone covered. Other recommendations focus on creating fund reserves to support the social security system during financial difficulties and implementing accounting principles on funds similiar to those used by multinational companies. The proposals come after the conservative government pushed through modest reforms last year against a wave of massive protest action. The changes, which included merging scores of funds into just 13 and offering workers incentives to remain in employment, had triggered weeks of strike action that brought the country to a halt on several occasions. Critics had argued, however, that the recently adopted changes to the law were too few to have any long-lasting effect on the system. Greece’s largest social security fund, IKA, was expected to show a deficit reaching 9 percent of gross domestic product by 2050 before the implementation of last year’s reforms, according to NAA figures. After the reforms, the deficit will reach 8 percent of GDP by 2060, the report adds, highlighting the small impact of the changes that Greece, one of several European Union countries facing a pension crisis mainly due to an aging population, has been urged by Brussels to make in order to revamp a fragmented, wasteful and mismanaged system that is straining state finances.