Less money for more pensions

Social security fund portfolios may have lost as much as 1 trillion drachmas in value since January 2000 due to the continuing stock market slide, according to data in the government’s Social Budget for 2001, which Labor Minister Tassos Yiannitsis submitted to Parliament yesterday. But the rate of return on investments has remained steady at 2.9 percent in the last three years. The funds also saw their cash balances severely curtailed from 298 billion drachmas in 1999 to 158 billion last year. The ratio of insured workers to pensioners fell dangerously from 2.5:1 in 1990 to 1.7:1. The social security system’s actuarial deficit is estimated at 1.3 trillion drachmas, or 3 percent of GDP. However, Yiannitsis said social spending had marginally increased to 20.4 percent of GDP in 2001.

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