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Greece considers new bank pension scheme

GREECE – The Greek government, bankers and the Bank Workers Federation, are in talks about the sector’s fragmented system, which could end with the launch of a single pension fund.

The integration of the sector’s auxiliary pension funds has so far seen bitter confrontation among bankers, who want to issue avoid footing the whole pension bill, workers who want pension promises to be kept, and the government.

Talks started last year but stalled in February as a common agreement seemed unlikely and the government said it would engage with each party separately.

The background is that Greek banks will have to comply with new International Financial Reporting Standards by the end of June.

This means they soon will have to report pension liabilities on their balance sheet, a prospect that could dent some banks’ capital base.

Workers federation OTOE, the government and bankers met again for talks yesterday. The federation and banking representatives were due to meet economy and finance minister Giorgos Alogoskoufis today.

OTOE president Dimitri Tsoukalas told IPE that the union is pressing for a single auxiliary pension fund, which should be called ETAT. But he said the union is also asking for pension promises to remain unaltered for employees hired until 2005.

The bank yesterday agreed to keep pension promises unchanged for employees hired until 2002 - a compromise which OTOE rejected.

So far negotiations have resulted in an agreement on integrating the sector’s first pillar pension provisions to the public fund IKA. Most banks have already taken this step apart from a few, which have now agreed to he transfer to IKA, he said.

“The really difficult part regard the supplementary pension funds,” Tsoukalas told IPE.

He commented that the sector has 11 supplementary pension funds, which overlap after a series of mergers - “so the puzzle gets even worse”.

“We also have a conflict about the funding. Who is going to pay?” he said. He said OTOE was given a “blurred” answer.

He said employers offered to pay a lump sum to the new fund, instead of regular contributions while the state committed the assets belonging to the 11 existing un-funded pension schemes plus a contribution from the public budget.

It is not possible to quantify the contribution size, which will be determined by an independent actuarial study, Tsoukalas said.

The finance and economy ministry was not available for comment.

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