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Greek Pensions Pact Details Revealed

13 February 2012 (PLANSPONSOREurope.com) – Details have been revealed over how Greece’s government will cut nominal supplementary pension benefits starting from January 2012 to eliminate deficits.

Athens News has obtained the final versions of the memorandum agreements made between the government and the EU/IMF troika.

The document reveals the Greek government has committed through a framework law, an in-depth revision of the functioning of secondary/supplementary public pension funds.

The revision commits to stabilising pension expenditure, guaranteeing the budgetary neutrality of these schemes, and ensuring medium- and long-term sustainability of the system.

Additionally it says the revision will: 

• eliminate imbalances in those funds with deficits;
• unify all existing funds;
• cut overall operational and payroll costs including an adequate reduction in staff headcount (by at least 30%) in the new single fund;
• achieve long-term sustainability of secondary schemes through a strict link between contributions and benefits.

The document adds the reform of the secondary/supplementary schemes has been designed in consultation with the European Commission, ECB and IMF staff, and its estimated impact on long-term sustainability is validated by the EU Economic Policy Committee.

The government also says the parameters of the new secondary notional defined-contribution system ensure long-term actuarial balance, as assessed by the National Actuarial Authority.


 

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