Public-sector pension funds sinking under deficits, ADEDY warns

The civil servants’ union federation ADEDY on Tuesday rung an alarm bell about the future of public-sector pension funds that are currently flailing under rapidly rising deficits and called for immediate political measures for their support.

In a letter addressed to Finance Minister George Papacon-stantinou, Alternate Labour Minister George Koutroumanis and Deputy Finance Minister Philippos Sahinidis, a copy of which was also sent to the prime minister’s office, ADEDY pointed out that the primary deficit of the civil servants’ welfare fund was already 800 million euros for 2011 and roughly 150 million euro for the Civil Servants’ Shareholder Fund, while 40,000 pensioners were not receiving any of the dividends due to them and another 200,000 were not being paid a part of the dividends due to them.

The union demanded an immediate meeting with the ministers to discuss measures to support the cash-strapped funds.

According to ADEDY, the funds’ dire financial straits were a result of a mismanagement of their reserves by the state, which had been either squandered on the stock exchange or used to cover state revenue-raising and social policies without being returned.

“The reduction in public-sector workers’ pay via the abolition of the 13th and 14th salaries, the restrictions on hiring and a 20 percent cut in benefits, combined with the increase in applications for pensions, have led the funds to an impasse,” ADEDY noted.

The union predicted that the problem would become acute unless measures were taken immediately, since a large number of people were expected to qualify for retirement by 2017.