ZF English

Mystery of the 159,000 special pensions that use up 1bn euros per year

12.08.2010, 23:57 7

159,000 special pensions, of the military and police personnel,and of former secret services employees will continue to lacktransparency, and are set to be recalculated by the ministries thatpay them, not by the National Pensions and Social SecurityHouse.
This is the first time that the number appears in an officialstatistics, published yesterday by the Tax Council.
The level of the 159,000 special pensions is not public, whichmeans that neither are the potential savings following therecalculation. These pensions are fully paid from ministries'budgets, i.e. from the state budget.
The other special pensions, of magistrates, aviators and of MPs,around 8,000, paid both from the Pension House and from the statebudget, will be recalculated by the Pension House, which publishestheir level and the share contributed by the state on itswebsite.
The savings expected by recalculating the 8,000 special pensions inthe second category, are of around 100 million euros per year. Theestimated savings following the recalculation of the around 159,000special pensions are not known. At an average 500-euro pension,they cost the budget 1 billion euros per year.
Special pensions are so called because they are calculated as apercentage (usually 85%) of the last gross salary or of the lastsix gross salaries, compared with those paid by the NationalPension House, which calculates them based on contributions paidover time to the pension budget by the current pensioners.

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