A haircut for the dividend and a contribution increase for the ASF

By “clipping” the amount of dividends received by the beneficiaries of the Army Shareholders Fund (ASF) and an increase in the levy paid by active officers of the Army and the Hellenic Police, the government is trying to bring order to the finances of this organization.

The approximately 50.000 dividend holders of the Fund (retired officers of HAGS and HP) receive a quarterly contribution to their pension, which is paid depending on rank upon retirement and is formally a return of contributions paid by salary years of active service.

The first of the four dividends to be received by the retired officers in 2011 was to be paid early next January. Instead, it will be paid in the last days of January.

Among other things, however, the dividend will be clipped by 25% as decided by the majority of the Board of the Army Shareholders Fund. This decision will be formalized in the coming days by a joint decree of the ministers of Defense, Civil Protection and Finance. According to confirmed information, the pro rata reduction by ¼ of the dividend paid by the ASF is accepted by officer unions, while those of the retired staff are negative.

Moreover, the government has decided to increase by 1% the contributions paid each month through the salary of active army and police officers. The contribution towards ASF will increase from 4% to 5% of their income; this is despite the reaction by the HAGS leadership.

The ministries of Defense and Civil Protection are thinking of cutting a series of bonuses received by ASF beneficiaries.
 

56m euros per year is the target

The 25% clipping in dividends and the increase in contributions were thought of as the only usable measures to avoid ASF bankruptcy; and this is because the deficit today reaches 350m euros - a reminder here that in 2010 the government supported the ASF with 136m euros (36m for every trimester)!

With the clipping of the dividend by ¼ and the increase in contributions, the government trusts that it will give 56m euros to the ASF in 2011 (approximately 14m each trimester) and hopes that in 2012 the Fund will be able to render the already-paid-for dividends to those eligible without the help of the state budget.

This is despite the fact that the main income from the rental of ASF assets (such as the Attica department store block) is expected to decrease in 2011 due to the already-expressed intent of tenants for a downward renegotiation of the rent paid to the Fund for the use of military property...