Hundreds of thousands of Greek pension savers who are today receiving their pensions will find their income reduced by as much as €50.

The cuts come after creditors demanded Greece make some significant reforms to its pension system in order to be eligible for its third bailout worth €86bn.

According to Greek news source enikos, the cuts are backdated to July and are expected to make net pensions by 3-4 per cent and supplementary ones by 6 per cent.

The cuts are expected to mean an additional €700m for the state.

As a result of the cuts, pension funds are now reportedly seeking external loans to cover liabiltiies over fears the third bailout won’t be enough to fund liquidity needs.

So far, two of the country’s biggest pension funds have both submitted applications for hefty loans in order to help fund increasing liabilities during times of economic instability.

The Unified Fund for the Self-Employed (ETAA) has received funding from the Generational Solidarity Insurance Fund (AKAGE) to cover its legal and notary workers’ branch, meanwhile, an application for €180m has been approved by the board of the Social Insurance Institute (IKA), the country’s biggest insurance fund.

Labor Minister Giorgos Katrougalos and Alternate Finance Minister Dimitris Mardas have also made the decision to loan €20m from AKAGE to ETAA to cover part of ETAA’s looming deficit, ekathimerini said.

There have been ongoing issues with the ETAA after the fund recently decided to liquidate some of its assets at loss in order to cover its needs.

IKA also took out a loan of €110m in August to be able to pay for September’s pensions. This decision meant €70m of the loan will be taken by IKA’s Public Insurance Fund and the remaining €40m by its Municipal Insurance Fund.

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