Social security dialogue to start early this month
The government has decided to launch the social dialogue on social security reforms earlier than projected, in response to current political developments and also to demonstrate that it is actually doing something about the problem. The social dialogue, which originally was intended to begin in late March or early April, will now kick off in the first half of this month. The decision to bring forward the talks came after Premier Costas Simitis was briefed last week on the issues with which the government holds a different stand from that of the umbrella trade union body, GSEE, and the civil servants’ union (ADEDY). He subsequently contacted GSEE head Christos Polyzogopoulos. Economy and Finance Minister Nikos Christodoulakis and Labor Minister Dimitris Reppas met last Friday night to discuss the financial costs of social security reforms. The former had met with Bank of Greece governor Lucas Papademos on the relationship between the central bank and social security funds. They also clarified the role to be played by an audit committee and the correlation between social security funds and private sector fund-management companies. Among the issues to be discussed in the social dialogue include increasing the retirement age to 65 for workers due to retire after 2008, with the government offering financial incentives to encourage those reaching the age of 58 to stay on for a further seven years in the work force, and incorporating parental leave (two years for every child) into the worker’s years of service for those who are eligible for retirement after the completion of the transition period. Participants in the social dialogue are also expected to examine the replacement rate for workers due to retire soon, with the limit proposed at 80 percent. Younger workers will also see their relevant replacement rates improved. One proposal up for discussion is that of the supplementary retirement fund, which will be funded and administered by professional fund-management companies, without the state-run funds getting involved at all. The talks are also expected to look into the government’s contribution to the social security system, which will probably be determined as a fixed percentage of Greece’s gross domestic product. There has been no indication as to the size of the government’s funding and the source of the funding.
