Breaking a vow not to impose any more austerity measures, the Greek coalition government led by Prime Minister Antonis Samaras, the New Democracy Conservative leader, is set to slash already-reduced auxiliary pensions as much as another 25 percent.
Greek retirees, besides their pensions, receive auxiliary benefits they earned from deductions from their salaries over decades of work and they’ve already seen those cut.
Now they could be reduced by another 25 percent, according to the Labor Institute of the General Confederation of Greek Labor (INE/GSEE) although the government put the figure at far less.
The Labor Ministry said the cuts are necessary after the abolition of 24 indirect taxes that fed money into the labor pool, estimating a drop of 120 million euros ($165.03 million) although the labor unions said it would be 1.7 billion euros ($2.33 billion), the money taken from pensioners.
Some pensioners are already living on benefits of 300 euros ($412.60) although Samaras has promised to help them with returns from a primary surplus of 1.5 billion euros, only to see bigger cuts later.
Lump sums that retirees earned have also been cut 40 percent and more although the country’s highest court has ruled those unconstitutional, posing a problem for the government if the money has to be returned retroactively and current retirees receive what they are fully due. The court said the money belong to the beneficiaries, not the government, which has nevertheless expropriated it.
The remaining 72 indirect taxes for such funds are also set to be revised by the end of the year, as Development Minister Costis Hatzidakis clarified this week, which would inflict a further blow on the pensions old and new pensioners receive, another blow that the government promised wouldn’t happen.
“These contributions will be gathered in one account at the Finance Ministry, which will distribute them according to the needs of each fund. No social security fund structure will be put in danger with the incorporation of all such resources in one account,” the president of the Social Security Foundation (IKA), Rovertos Spyropoulos, said.
“As of January 1, 2014, you will get what you’ve paid for, as there will be an individual share, with no discrimination, while the system of supplementary pensions will be clear and transparent for all workers,” noted Anastasios Papanikolaou, the president of the Single Auxiliary Social Security Fund (ETEA).