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Clarity sought in Greek banks’ pension transfer

GREECE – The International Monetary Fund has called for clarification in the planned transfer of state-controlled banks’ pension liabilities to the main public pension fund.

The IMF said Greece plans to transfer the banks’ large pension liabilities to the IKA, the main public pension fund, by 2007.

It “urged early clarification of the terms of this transfer, especially as banks will have to recognize their pension liabilities under International Accounting Standards”.

The IKA, or Social Insurance Institute, is the largest social security organisation in Greece. It covers 5,530,000 workers and employees and provides 830,000 pensioners with retirement pension.

The IMF said it was disappointed that pension reform was not on the Greek government’s agenda. The pension reforms in 2002 “consolidated a number of funds, but did not address underlying expenditure pressures”.

“Since pressures are expected to begin to be felt during the next decade, they the IMF_team expressed disappointment that pension reform is not part of the government's immediate priorities,” the fund said in a report.

It “urged the authorities, as a minimum, to begin as soon as possible the public debate needed to develop a social consensus for change, including by laying out the cost of unduly delaying the reforms”.

It said that on current estimates, Greece’s pension and health-care costs will rise by more than in any other EU country between now and 2040. High public debt and the weak budget position would “leave little room for fiscal maneuver”.

Earlier this month IPE quoted a Greek Finance and Economy Ministry spokeswoman as saying the government may turn to Ireland for “inspiration” on pension changes.

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