Costly deal on pensions

Today, top officials of the Finance Ministry are scheduled to meet with its social partners, finalize the changes to the social security system and agree on the framework for financing the system’s huge actuarial deficit. But none of those involved who seem prepared to celebrate the «national agreement» appear to have pondered on the costs the proposed changes will entail. The exemption from the minimum retirement age of 65 of all those who began work after 1993 and completed 37 years of work, the increase in pensions to 70 percent from 60 percent of wages, and changes to auxiliary funds will burden the social security system significantly. According to independent MP and former National Economy Minister Stephanos Manos, the actuarial deficit in the next 30 years will increase by 50 percent of GDP because of the proposed changes to the social security system. This raises the issue that none of those subscribing to the impending agreement has asked for such an actuarial study.