Thursday, June 6, 2013

Detailed break-down of IKA-pensions

In internal profit center presentations during my banking career, we often used the well-known phrase 'don't believe any statistic which you haven't forged yourself!'. Well, I haven't forged the statistics in this blogpost myself so I can't vouch for their validity...

The statistics show the pryramid of recipients of IKA-pensions assigned to ranges of their monthly pension. Bottom-line: 72% of all recipients have a pension which is in the range up to 800 Euros per month. When increasing the range up to 1.400 Euros per month, 95% of all recipients are included. Put differently, only 5% have a pension above 1.400 Euros per months.

I thought this was quite interesting!


  1. Actually, they are very bad statistics, Klaus. The correct way to present such data analytically, is to provide a breakdown by decile. That way, you can see more accurately what people actually receive, rather than a predetermined presentation with a possible political agenda.

    In fact, by giving 800 euros as the floor, these stats fail to inform about lower levels of pensions. My guess is that the bottom decile would have an average pension of probably no more than 350-400 euros. I am guessing, but this is a very serious point.

    Bad statistics. As always -- from governments, bloggers, journalists...

  2. Below is a twitter exchange I had on the subject:

    Klaus Kastner ‏@kleingut 6 Jun
    Detailed break-down of IKA-pensions.

    Philip Dragoumis Philip Dragoumis ‏@pdragoumis 6 Jun
    @kleingut an interesting stat would be to see the breakdown for all pensions not just IKA and the total expense amount in Euro Bn

    Klaus Kastner Klaus Kastner ‏@kleingut 6 Jun
    @pdragoumis Agree! And where can I find those stat's?

    Philip Dragoumis Philip Dragoumis ‏@pdragoumis
    @kleingut ah those are a closely guarded secret because they show how much pensioners of PPC, OTE and others are receiving

    It was obviously clear to me that the IKA-figures did not relate to what I am seeing in everyday life. It just so happens that many of the people I know are pensioners but so far I have only met one who retired at age 65. The others, all with full pensions, range from their early fourties (a female school teacher) to the early fifties. In pre-crisis days, the policewoman who had retired at 50 received a pension of 1.800 Euro. A former OTE man who retired in his early fifties had a pension of 2.800 Euro. One of my neighbors collects 3 pensions (all from public sector entities) and they were 12.000 Euro.

    Just this week we sat next to distant relatives of my wife, both retired for over 10 years. He had retired at 51 (military), she at 49 (nurse). His pre-crisis pension was 2.400 Euro and hers was 1.200 Euro. Both complained bitterly that their pensions had now been cut to a combined 2.400 Euro.

  3. From another source, yet more incompetent statistical data -- telling us that

    "The data has been collected for 93 social insurance funds. For the vast majority of Greece’s seniors the pension is very low, with 33.1% to receive 371.64 euro. Another 33% of pensioners receives an average of 675 euro gross per month. Only 700 people received more than 2,500 euro main pension. According to the ministry, the average retirement income derived from the aggregation of main and supplementary pension and benefits doe snot exceed 907.65 euro, before taxes and deductions for healthcare."

    Again, this is not presented by decile or pension fund. Moreover, if 33% receive 371 euros, what does this mean. It is not possible that they all receive exactly this amount. So is it a ceiling, an average, or what?

    TERRIBLE data. if by now, Greece has not learned the importance of proper data collection, research, analysis and presentation, then there is no hope for the country. A developed economy cannot compete with this level of incompetence in the state management.

  4. Gentlemen, the above are not data. They are talking points for the media. I can name several things about the "data" that have not cross your mind:
    a) How many people receive a pension that is nor officially defined as a pension? Retired senior judges and Members of Parliament get something called parliamentary compensation, which doesn't seem to be affected by cuts. Several old ladies are pensioned off under an ancient scheme for helping unmarried daughters of civil servants, called support. And so on and so forth
    b) Are you sure that the pensioners mentioned in the "data" are alive or they even ever existed?
    c) How many of those pensioners work while drawing pension?
    d) How much of these pensions are really political money?

  5. Well, of course, all Greek statistical data are fraudulent. The Greek state and the political parties have no intention of allowing people to know what is actually going on. This is the principal reason that the Greek economy is a disaster.

    Specifically, there has been a combined pension computerised system since 2008 in an office on Syggrou, opposite Panteion. I visited it, for a European Commission project, to ask detailed questions about the database. I was not happy with their answers, especially the claim that data are all confidential so nobody (not even the finance ministry) could ever have access.

    In reply to your points:
    (a)No idea. Again, this is typical of Greece and most of the third world, that things are defined in such a way that defies logic, but suits corruption and political patronage. It is something the Troika should investigate.
    (b)This has started to be addressed, but is well known as a problem now in Greece. Greece is the only EU country where there is no automatic linkage between the civil registry and the pensions systems. All are computerised, but there has been no interest in preventing fraud.
    (c) This is a problem in all countries, and extensive in the UK and USA.
    (d) Not sure what you mean by political money. If you mean that the recipients are not genuinely insured with a social insurance fund and have made appropriate payments over the correct time period, then that would depend on the fund. Some of the funds listed (that I have never heard of) are probably what you describe, for the most part. A bigger problem is that all the funds are more or less bankrupt, and this was clear 20 years ago. Yet both political parties did precisely nothing about it, while Germany was restructuring its pensions systems to cope with demographic shift.

    1. "data are all confidential" This sounds familiar. Did you check their political/labour union affiliations? My guess they are KKE/PAME members. This strange situation of nobody having access to data, enforced by the unwillingness of administrators to share passwords and backups and only answer to written requests for data with no way to really know what is going on, is rampant in Greece. It constitutes a serious administrative cancer. This is why there no linkage between the registry and pensions.
      Political money. In a variety of ways a person takes 10 pensions or state salaries. Keeps two or three of those and hands over the rest to the local MP, the local party coffers or persons the party needs to finance. Also rampant, although it seems to be dying the last year or so.

    2. Well, I have no idea of political affiliations. This was an official interview with the Director, to be recorded for the European Commission. His explanation was that each pension system retains "copyright" (!!) over its dataset; as the composite dataset uses data from all the pension schemes, then they would all have to agree to access. Impossible, of course.

      I have to say that I have had this experience repeatedly in Greece, that nobody has access to datasets. There is also a ridiculous data protection authority that does nothing to protect important data leakages (such as the selling of income tax data to banks) yet interferes wherever possible to stop things in Greece from working.

      In 2005 I wrote a report for the Ministry of Interior about statistical data on immigrants. They asked for recommendations and followed every single one I gave. One of them, was that they needed to know the educational level, training, previous employment, skills and approximate income of immigrants applying for permits. They included such questions on a revised and reprinted form, and within two weeks Greece's malakes judges had ruled that these questions "invaded the privacy" of immigrants applying for permits to stay in Greece.

      With this sort of ideological stupidity from the Greek "intelligentsia" (I use the word rather loosely) one can understand why ordinary people have started to support Chryssi Avgi. All of the old political mafiosi have failed Greece, and need to be kicked out immediately. The problem is how to do it, and who can run the country in the future. Germany has done much harm by propping up ND and Pasok.

      As far as "political money" is concerned, I must confess that I did not know of this technique. Thank you for the info.