Dire finances of pension funds mean new cuts inevitable, unionists say

Repeated assurances by government officials that there will be no more austerity measures imposed on Greeks after three years of tough cutbacks were undercut Tuesday by unionists’ claims that further reductions to pensions are unavoidable due to the dire financial state of the country’s funds.

At a press conference Tuesday, representatives of the country’s main pension funds, including the Social Security Foundation (IKA), warned that the pension system was still a liability as delayed reforms – chiefly involving the merging of the funds – had failed to solve key problems. The biggest scourge remains the funds’ finances, with IKA alone having seen a 65 percent increase in its arrears – from 4.8 billion euros in 2010 to 8 billion this year.

Other problems include Greece’s aging population, which has resulted in reduced revenues for the funds, and a mass wave of early retirements, which has burdened several funds, particularly those representing employees at former state banks and utilities such as the Public Power Corporation and telecoms company OTE, which have seen a major staff exodus in recent years.

Representatives of the IKA workers’ union, known by its acronym POSE-IKA, suggested Tuesday that the financial problems would lead to further cuts of at least 30 percent to auxiliary pension funds and 10 percent to main pension funds. Privileged funds including those of bank and utility workers will not be able to offer the generous pensions they once did, according to unionists who said the only safety net for workers henceforth would be a basic monthly minimum pension of 360 euros.

Some funds, such as the one representing the country’s seamen, face abolition. Those insured with the fund representing the self-employed, known as OAEE, have additional problems. An estimated 50 percent of them reportedly do not qualify for a pension and may be obliged to cover their own costs for treatment at state hospitals.

The head of the IKA workers’ union, Giorgos Kyriakopoulos, said pension fund staff would launch rolling five-day strikes from Monday to protest the situation of the country’s funds as well as the planned induction of 600 Labor Ministry staff into the government’s mobility scheme.

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