All scenarios for the retrospectives of retirees after the SC

By Dimitris Katsaganis

Three key scenarios have fallen on the table of the Ministry of Labor and e-EFKA in relation to the government’s attitude towards retroactive pensions, after the publication of the decisions of the Council of State (CoC) the day before yesterday.

The first scenario envisages the payment of retroactive payments for auxiliaries – gifts only for those who have appealed to the courts until July 31, 2020, the second scenario envisages the payment of these retroactive payments to all retirees (whether they have appealed to Justice or not) and the third retrospective with the negative personal differences of Katrougalos law.

It is recalled that the CoC awarded the return of the cuts in the supplementary pensions and gifts for the 11 months June 2015 – May 2016 (based on the memorandum legislation of 2011-12), but only for those who have appealed to the Court by July 31, 2020, provided their cases have been finalized or will be finalized in the courts in the future.

Thus, those who have not appealed to Justice, but also those who will not be acquitted in the courts, based on the decision of the CoC are not entitled to retroactive return.

Experts estimate that close to 300,000 retirees who suffered the cuts had filed a lawsuit by July 31, 2020.

On the contrary, close to 1,300,000 retirees, although cut, did not appeal. Thus, based on what emerges from the decision of the CoC, if justified by the courts, the 300,000 who appealed, they and not those who did not appeal to Justice, will receive their retroactive.

Thus 3 out of 4 retirees will be excluded from the return of the cuts they suffered and only 1 in 4 will receive them retroactively.

This solution (ie the payment retroactively to only 1 in 4), although financially it is much more favorable (around 600 – 650 million euros) in relation to the possibility of returning the retroactive to all those who suffered cuts, it is estimated that politically it is very difficult, as they would be excluded from retroactive retirees simply because they did not appeal to the courts (until July 31, 2020), although based on the decisions of the CoC this month they are entitled to them.

The budgetary cost of returning the retroactive to all those who have suffered cuts (1.6 million retirees) is estimated, however, at 2.5 billion euros, an amount that is gigantic for the resilience of the middle budget, especially the energy crisis.

In the government, however, according to his information Capital.gr by Fund executives, do not politically rule out this possibility (ie the payment of retroactive for auxiliary – gifts to all retirees), despite the gigantic budget costs.

It is recalled that in the summer of 2020, the government of ND passed a law by which all public and private sector retirees received retroactively for the cuts in the main pensions for the 11 months June 2015 – May 2016, although the SC had justified only those who appealed in Justice and a relevant decision was pending from the Court of Auditors for the pensioners of the State.

Therefore, according to the same sources, there is no obstacle (beyond the budget) for the government to decide to follow the same path again, ie to return to all retirees the cuts in allowances and gifts and not only to those who were justified by the CoE. .

Factor in the whole equation of the impending extraordinary pension expenditure until the end of 2022 – given that any government decision on retrospectives must be taken in the immediate future and certainly before the widely acknowledged early elections next fall, as informed Capital.gr executives with knowledge of processes within the Ministry. Labor – are the increases in all main pensions from January 1, 2023 (practically before the Christmas holidays of 2022).

The reason for the thawing of the nominal increases (5% -6% according to the basic scenario which is on the table of the government) in the main pensions after their 6-year (from 2017) freezing, as the same leadership of the Ministry. Labor has announced.

In particular, all new pensions will be increased, ie those requested by retirees after 13 May 2016 – and accounting old pensions, ie those applied for by retirees until 12 May 2016. An accounting increase means that negative personal income will be reduced. difference of old retirees.

The possibility that concerns some executives of the funds, according to secure information of Capital.gr, is the offsetting of the retroactive for all retirees – and not only for those who are entitled by the CoE – with their negative personal difference, as has emerged after their recalculation based on the Katrougalos law and the Vroutsis law.

In this case, the new retirees from 1 January 2023 (practically before the Christmas holidays of 2022) would normally receive, as already provided, their increases (5% -6% according to the basic scenario), while the old retirees would be divided into two categories:

* The first category would be those whose after the offset of retroactive – nominal increase with their negative personal difference for 2023 (on an annual basis), a positive difference would arise, which would be actually received as retrospective.

* In the second category, would belong those retirees whose, after offsetting retroactive – nominal increase with their negative personal difference for 2023 (on an annual basis), the latter would disappear.

This solution, although extremely technically difficult, according to the executives who are examining it, could have three advantages.

The first is that all retirees who suffered cuts in ancillary and gifts in the 11 months of June 2015 – May 2016 (under legislation 2011-12) would receive, albeit indirectly, their retroactive. On the contrary, if the government decides to return the retrospectives only to those who have appealed to the Judiciary, the vast majority (who have not appealed to the Judiciary) will most likely feel “wronged”, the same sources note. Moreover, if the government decided to pay retroactively only to those who appealed to justice, but only when their cases were finalized positively, these retirees would probably be too late to receive the amounts they are entitled to.

The second advantage would be the elimination of the negative personal difference from January 1, 2023 for all old retirees would pave the way for horizontal increases in pensions from January 1, 2024.

The third advantage would be that the direct budgetary cost would be much lower than that of the retroactive return to all retirees who suffered cuts in 2015-2016.

M. Voridis: A “uniform regulation” must be made for retrospectives