State aid: Commission endorses reform of supplementary pension regime in Greek banking sector
European Commission - IP/07/1470 10/10/2007
Brussels, 10th October 2007
The European Commission has approved, under the EC Treaty rules on state aid, the optional transfer of the supplementary pension regime of certain banks to the general social security regime in Greece. The Commission's investigation found that the conditions for transfer would not give any economic advantage to the banks concerned by the reform.
Competition Commissioner Neelie Kroes said: "I am pleased to approve a structural reform which aims at securing the sustainability of a pay-as-you-go pension system through the enlargement of the basis of affiliated persons."
On 6 September 2006, the Greek authorities notified the optional transfer of the supplementary pension regime of certain banks to the general social security regime.
Whereas employees of all banks are insured for their main pension with IKA-ETAM, the general social security body for main pensions, the supplementary pension insurance in the banking sector is currently rather fragmented. Bank personnel recruited before 1 January 2005 are affiliated for their supplementary pension either to ETEAM, the general social security body, or to separate insurance bodies, depending on the banks they work for.
The reform aims at providing legal certainty for bank employees and ensuring, in particular, that pensions will be available and adequate.
The reform would establish a new legal entity governed by public law called ETAT (the Single Insurance Fund for Bank Employees), which would benefit from the guarantee of the Greek State. ETAT will be responsible for updating and processing the social security cases of bank personnel and will act as a link and mediation body between the bank personnel, ΙΚΑ-ΕΤΑΜ and ΕΤΕΑΜ.
Banks currently outside the general social security regime for supplementary pensions would have the possibility to opt for their separate insurance body to be merged into ETEAM. In the latter case, the persons insured at the supplementary insurance body would be automatically affiliated to ETEAM. In particular, their basic supplementary pension rights, which correspond to the supplementary pension rights served by the general social security regime would be transferred to ETEAM in exchange for the compulsory payment of employers' and employees' legal contributions. The specific supplementary pension rights, which are the rights over and above the basic supplementary pension rights, would be taken over by the social security bodies ETEAM and ETAT in exchange for a lump sum.
The Commission's role is to ensure that the reform does not confer any economic advantage to the banks that will opt for integration.
The Commission has come to the conclusion that ETAT does not perform an economic activity within the meaning of Articles 87 and 88 of the EC Treaty. As a consequence, the state guarantee that it enjoys as a legal person governed by public law falls outside the scope of application of EC Treaty state aid rules (Article 87 (1)).
The Commission's investigation concluded that the transfer of the basic supplementary pension rights to ETEAM under the conditions described above would not exempt or release the banks concerned from financial charges deriving from the normal application of the general social security system.
The Commission's investigation of the method presented by the Greek authorities to evaluate the specific supplementary pension rights that will be taken over by ETEAM and ETAT found that the banks concerned will fully finance the additional financial charges incurred by ETEAM and ETAT.