GREECE - Following the recent scandal about pension funds' bond purchases the Greek government has issued new rules on selections of board members for state-controlled funds.

In future, heads of pension funds will have to have proven experience in social insurance or social policy issues.

Furthermore, a commission will be set up for the selection of these people. It is to consist of the secretary general of Social insurance as non-voting chairman, the head of the Capital Markets Commission, the governor of the Bank of Greece as well as representatives of employers and employees unions.

Another step the government wants to take is to spread the use of International Accounting Standards and compulsory annual reports.

Earlier this month Andreas Kintis was appointed new head of the Civil Servants' Auxiliary Fund (TEADY), following his predecessor's forced resignation over bond-overpricing allegations.

Kintis, a professor of econometrics and a former rector of the Athens University of Economics and Business, took up his new position last week.

The fund's previous head, Agapios Simeoforidis, was asked to step down after it was found that TEADY allegedly over-paid €5m for a structured bond. He is now under investigation over the sale.

Financial columnist Dimitris Kontogiannis sees the scandal as a chance to overhaul the pension system including restrictions on asset allocation. Currently, pension funds have to put 23% in Greek equities and real estate and 77% to Greek government bonds, he explained in the daily Kathimerini.

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