NEWS

Ministry plans to merge funds

The conservative government intends to merge scores of pension funds as part of planned reforms to make the social security system viable. Employment and Social Security Minister Vassilis Magginas told parliament yesterday that 155 pension funds could be reduced to about 20. «With 155 social security organizations, its impossible to achieve even elementary economies of scale and reduce waste,» he said. Pension fund consolidation won’t affect «current pension benefits and retirement age rules,» according to the minister. Greece’s retirement system may derail government finances within a decade as pension funds suck up ever more tax money to finance the retirement of the ageing workforce, according to the Bank of Greece. The government’s call for talks to find common ground on pension system reforms have been turned down by labor unions and political opposition parties. Private sector umbrella union group GSEE says the state owes the social system 9.8 billion euros in past due contributions and has refused to take part in talks until this amount is settled. Businesses also say the current system is an economic time bomb and that funds need to be merged, the retirement age raised and benefits cut as part of new reforms. The government has said that it plans to introduce changes to the pension system in the first half of 2008.