PENSIONS CLOSE TO POVERTY LINE THE REPORT BY THE BANK OF GREECE POINTS TOWARDS THE OPTION OF PRIVATE INSURANCE At the end of the article there are comments concerning the Hellenic Post

ACCORDING TO THE BANK OF GREECE, FROM 2015 ONWARDS AND ESPECIALLY AFTER 2020, THE PENSIONS WILL BE AT POVERTY LEVEL – THE ARTICLE ALSO INCLUDES COMMENTS RELATED TO THE HELLENIC POST

PENSIONS CLOSE TO POVERTY LINE

THE REPORT BY THE BANK OF GREECE POINTS TOWARDS THE OPTION OF PRIVATE INSURANCE

At the end of the article there are comments concerning the Hellenic Post

The Bank of Greece, in its report on the Monetary Policy for the period 2020-2060, predicts that the Greek pension system will be significantly weakened by then, as the basic benefits will be reduced by up to 50%, while the rapidly increasing numbers of pensioners will be living close to the poverty line.

According to an article published on “Kathimerini” newspaper, the Bank of Greece report points out that “the total replacement ratio will drop to 48,5% during the period 2020-2060, whereas before the reform of the Greek pension system it was 95,7%”.

“In case a pensioner does not have other income resources, the reduced replacement ratio of the first pillar will result in his/her living under the poverty line, when during his/her working years, the same pensioner could have been earning up to 1,2 times the average income”, concludes the Bank of Greece in its report.

But what led to such an adverse development, which may even result to the complete extinction of our pensions, even for those whose salaries are slightly above the minimum?

First of all, according to the above publication, it is predetermined that the public expenditure on pensions as a percentage of the GNP will be reduced. The aim is for it to drop to 17,4% of the GNP by 2060 from 24,1% that was in 2010.

However, such a reduction, when at the same time the retired population has increased (by 70%), will unavoidably lead to dramatic cuts on retirement benefits. Given this reduction of the public expenditure on pensions, the legal framework concerning the reform (laws 3863/2010 and 3865/2010) has included provisions according to which, the new method of calculation of the pension will be less compensatory than the generous replacement system that was in force until recently in Greece.

Indeed, it is characteristic that new coefficients have been introduced (e.g. the number of the people who retired within a particular year), which are used for the calculation of not only the main pension but also of the one-off retirement benefit; those coefficients minimize the contributions-benefits return and, as a consequence, the amount of the pension is significantly reduced, even for those who have completed 35 years of insurance.

In this new retirement landscape, the only constant will be the basic pension amounting to 360,00 euro, while the rest of the pension sum will be calculated on the basis of coefficients, which will lead to a proportional pension calculated on the total of the income and working years completed since the first day of employment.

This new calculation method, which will gradually adapt the pensions amounts to the diminishing possibilities of government funding, has already been legislated since 2010 and primarily affects those insured for the first time after 1-1-2011. However, it will also affect those who establish pension rights after 1-1-2015.

Especially in Greece, the pension cuts are connected not only to the minimization of the public expenditure due to various adjustment programs but also to the new basic salary, which is reduced by 20%, meaning that the Insurance Funds receive less income from insurance contributions. The increasing unemployment rates have a direct impact on the Insurance Funds revenues, despite short periods of relief offered by legislated measures.

Within these circumstances of gradual and unavoidable depreciation of the main pension as well as the redistribution system based on public funds, the Bank of Greece saw the need to re-examine the development of supplementary pillars, especially those linked to private insurance programs.

But still, according to the Bank of Greece report, there are various problems to deal with, among which: the unstable taxation system which offers no motivation to the employers, the significant number of small businesses that are unable to establish their own insurance fund, and the bureaucracy in every sector of the economy and public services.

Comments:

But what do the various financial organizations think about all this and why? What will our governing bodies decide on our behalf and when will they draw the line at pensions and salaries cuts? All those questions constitute only part of the issue, as it is of paramount importance to examine what we have done already and what we should do all together in the future, in order to salvage what’s left of our rights.

Each one of us and all of us as a whole are responsible for the current situation, thus we should assume responsibility and take initiatives to resolve it, otherwise these politics and policies of poverty, recession and unemployment, of black and uninsured employment, will leave no businesses standing, no employees to pay insurance contributions and no funds to pay our poverty pensions.

The devaluation of the work environment, where the employees have no rights or any kind of rudimentary protection against the employer, where there are no Collective Employment Agreements, no Social Security and no way of surviving, when at the same time more taxes are imposed only on salaried employees and pensioners, leaves little hope for the future.

Should the awaited economic growth and competitiveness be achieved through downsizing labor costs, to the detriment of labor rights and all conquests in this area?

Which rationale or economical theory dictates this?

It is a given that the investments and the creation of new jobs in Greece will be based on barbaric working conditions and that the new allocation of our country’s wealth is part of a greater geostrategic plan designed on a European and global level.

Many have fallen victims of this new redistribution within the framework of this new globalization, and our country is a weak link suffering the painful consequences of the economic crisis, which is also due to political decisions.

The current situation is not just the result of mistakes and weaknesses of the system.

What they are doing to our country and its citizens is robbery and could be referred to as “the fraud of the century”!

Everyone has the right to work and it is the state’s obligation to guarantee this right as well as to provide a minimum benefit for the poor and the unemployed; the state’s aim should not be the glorification of the market at the expense of the majority of the citizens who are driven below the poverty line, with no rights or hope.

The amount of our pensions is not an unfounded demand or expectation. It is our right, based on insurance contributions we have already paid for, which the state is stealing from us.

The welfare state we’ve known in the past has unfortunately stopped assuming its responsibilities and meeting its obligations and this “virus” will spread to all sectors of social life (education, health, social benefits).

The downfall of Greece and the suffering of Greek citizens and employees is the result of deliberate choices; this situation has to be overturned not only for our sake but mostly for the future generations.

It is our duty.

This is not a one-way street.

Their tactics related to insurance funds, businesses and the economy in general, which are well known to everybody, aim to make it easier for them to impose their measures on the Greek society using the “shock doctrine”.

By presenting the whole economic situation as black and irreversible and by threatening that the only solution is “all or nothing”, they blackmail the society and mostly the employees, whose fear and insecurity make them accept all measures thinking that in this way they will avoid the worst.

Aren't they doing the same with the Hellenic Post?

While the employees have always dutifully assumed their burden by sacrificing many of their rights and benefits, the government and especially the administration have been undermining our Organization for years. As a result, the necessary actions that should be taken against certain measures are either postponed or weakened and spineless, thus failing to change the situation and offer new prospects.

With many years of recession still ahead of us, the Hellenic Post is following a declining course, whereas our competition is ruling the market uncontrolled, thus making it evident that powerful interests are favored at the expense of the employees and the public postal services.

In this transitional period, when negotiations with the administration are taking place, the propositions and positions of our union regarding the Hellenic Post's sustainability, our jobs and the preservation of the remuneration scale's basic characteristics, are both responsible and realistic.

These adverse circumstances of the recession and the memorandums are incomparable to any past period in the history of our country, despite what many argue, not taking into consideration the various political decisions that are in play. It is a given that our propositions, if not implemented and combined with significant reforms, will make little difference and not succeed in improving the Hellenic Post's prospects.

We need responsible answers and new tools to confront the situation; our employees know this and are ready to assume their burden, however, they refuse to be the only ones to do so.

Many are those who are overworked and underpaid and have started realizing that this allocation of poverty is neither effective nor fair. It is just an easy solution which creates social injustice without resolving any problems.

Unfortunately, the new administration has been proven insufficient and unable to rise up to the challenges of our times. We hope that it is not serving other powerful interests, purposefully showing reluctance and avoiding to take the necessary steps, thus leading our Organization to a financial, operational and administrative dead-end.

The restructuring, growth and improvement of the future prospects of the Hellenic Post require moral and political strength, willpower and administrative skills, as bold decisions need to be taken; only the active participation of all the employees can guarantee a fair and sustainable restructuring plan.

The most recent indications from the part of the administrative officials are very pessimistic and the employees stand ready to fight their unwillingness to address the issues, as they have done many times in the past. This time, however, the union's response will be more drastic.

All this odd backtracking and perfunctory actions that have been going on recently, can only cause fear and rage.

The convenient solution of salary cuts is unfair and offers only temporary profits.

We need a different course of action.

So we ask the administrative officials: are you able to do this? Anyway, this is what we pay you for!

We need to do now what should have already been done yesterday.

We will not let you complete the sell-out of the Hellenic Post.

If you don't take immediate action and decisions that will give new hope to the employees, we will all sink even deeper.

Is that what you want for the Hellenic Post?

The new Administration, with its many facets and diverse opinions, ought to prove to us that it can guarantee the future of the Hellenic Post as well as its role within the postal market of our country.

Isn't this what they were appointed to do anyway?

Unless they have a hidden agenda, in which case we will be ready to confront them.

In respect of the issue of the hasty retirement of many colleagues, who are once more apprehensive about the new developments, the POST Federation has not changed its position: the amount of the pension nowadays is much less than that of the salary, and this is a factor that everybody should take under serious consideration before making any relevant decisions.

Those who are thinking about early retirement, should not take their final decision because of fear or under pressure of the current events, as in the end they will probably be disappointed by the total sum of the pension and the one-off allowance.

On the contrary, they should make an informed decision based on their individual circumstances, after getting adequate information from our Federation and Insurance Fund on any changes in respect to the pension system as well as their rights as Hellenic Post employees (Collective Employment Agreement, salary scale, redundancy payment, which remained the same, but many people based their decisions on rumors that said otherwise and quit their jobs out of panic).

If you have established your pension rights, it does not hurt to be ready for retirement; on the contrary, if you are considering early retirement or costly repayment of pension rights, you should think it through.