ocp192_en

Memorandum of Understanding on Specific Economic Policy Conditionality178in an actuarially neutral way with pro-rata calculations starting January 1, 2014. The fiscalsustainability factor will be applied to all supplementary funds integrated into ETEA from1 st July 2014 to eliminate any deficit.5. Starting January 1, 2015, all supplementary pension funds will only be financed by owncontributions. For a limited number of funds that technically cannot be merged into ETEAat this stage, the same rules as outlined in the previous paragraph will be applied from 1 stJanuary 2015.6. On lump-sum pensions, the reform implementation has already started (effective sinceJanuary 1, 2014), eliminating the deficits in these funds. All remaining funds that fall underthe ESA95 definition of General Government will be incorporated under law 4052/2012,effective from 1 st January 2015.7. Starting 1 st January 2015, all lump-sum funds will only be financed by own contributions.8. The Government will undertake a review of the social security system by May 2014 thatwill:i. Make proposals to further consolidate social security funds (SSFs) and integrate theirback-office functions and IT systems.ii.iii.iv.Provide a comprehensive analysis of the contribution and benefit structures andtiming of payment, and to widen the contribution base for SSFs.Clarify and identify the rules of operation fund by fund, as a first step beforeharmonizing them.Make proposals to enable pension portability between SSFs to facilitate mobilityacross jobs, occupations, and sectors.v. Through a detailed accounting exercise covering each individual SSF, assess theextent that spending on social assistance matches government funding to SSFs;examine SSFs financing through nuisance taxes; and benchmark the managementand other overhead costs of individual SSFs.vi.Evaluate means to strengthen the link between contributions and benefits.9. The Government will follow up to the above review, after consultation with EC/ECB/IMFstaff, to make proposals toward achieving consolidation of SSFs, and to harmonizecontribution payment and benefit rules by June 2014:i. To further consolidate SSFs, integrate back-office functions and IT system,harmonise rules of operation, and improve pension portability (June 2014).ii.To make progress towards constructing a central register of contributors anddeveloping a unified registration procedure in line with the roadmap to integratesocial security contribution collection with tax administration revenue collectionservices.10. The Government will present a wide-ranging package for pensions (September 2014). Thepackage will take account of the results of an actuarial review:i. Policies to widen the base of SSFs, including through elimination of unjustifiedexemptions by 1 January 2015.ii.iii.Policies to ensure the full separation of social insurance functions from the socialassistance functions of SSFs, with social assistance functions funded by general taxrevenues.Policies for a future pension-funding system that will safeguard the overallsustainability, actuarial fairness of the pension system to be implemented from 1January 2015. The proposed system should increase incentives for labour marketparticipation and improve incentives for making contributions through establishing a