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Greece unveils plan to integrate state pension funds
The Greek government on Tuesday unveiled a plan to restructure the country’s pension system through the financial integration of various sectors and by creating single set of rules and regulations for each pension organisation.
Presenting the plan, Labour, Social Insurance and Welfare Minister Yiannis Vroutsis said it envisaged the administrative and operational integration of 90 different pension registers and 60 different social insurance sectors which have been merged into the six main pension agencies of the country and continue to have “financial and accounting independence”.
The minister said that this situation has resulted in “bureaucracy, complexity, loss of revenue and problematic services to pensioners, increased administrative costs, inadequate statistics and undermined the ability to draft efficient policies”.
Ministry officials stressed that these changes should have been made years ago, but always stumbled on the fear of the “political cost”, while they dismissed any possibility of further cuts in pensions because of these changes.
According to the basic directions presented by the Labor minister, a coordinating commission will work on four axes: tracking down illegal pensions, collecting overdue debt and combating social contribution evasion through a single and simplified way of collecting debt and cutting administration costs.
The commission will work under specific timetable and will convene at least once every month.
Vroutsis described the country's pension system as a "mosaic of exceptions and special regimes built over the years of the basis of clientist attidents" and still remained "labyrinthine and fragmented".
“We have no right to make the same mistakes again, leaving difficult decisions for tomorrow. We have no right to lose more opportunities,” the minister told reporters, adding: “This is something that the next generations of Greeks will not forgive”.
Ministry sources said cuts made so far in basic and supplementary pensions saved around 1.4 billion euros for pension funds, of which 500 million euros from IKA, 2.4 billion euros from abolishing Christmas bonuses and 817 million euros from abolishing a favourable measure in social contributions paid by high-wage earners.
