Discussions on the government’s proposed pension reform continued on Monday within the Labour Advisory Body, with some questions addressed but key issues still unresolved.
According to estimates by social partners, the current proposal could lead to reduced pension levels for those opting for early retirement at 63. A revised framework is now expected, following the government’s position that a previous scenario involving cuts to pensions above €1,700 has been withdrawn.
Outstanding concerns
Sotiroula Charalambous said there are still “critical issues for which we have no answers,” particularly regarding the operation of Pillar 0. This αφορά pensioners below the poverty threshold, where eligibility criteria remain unclear.
She also pointed to pending clarifications on subsidised contributions related to care and the criteria governing them.
Andreas Matsas described as positive the confirmation that there will be no pension reductions, but stressed that “we expect a revised plan,” underlining the need for a comprehensive reform with clear timelines.
Stelios Christodoulou stated that social partners maintain a firm position that no pension cuts should apply, neither for pensions above €1,700 nor for those around €1,500 in cases of early retirement at 63.
He also highlighted unresolved questions, including whether voluntarily insured individuals will be allowed to pay their own social insurance contributions.
Alternative options under review
Marinos Mousiouttas said alternative options will be presented in upcoming meetings regarding the actuarial reduction of 12% applied to early retirement.
He noted that the Labour Ministry, in coordination with the Finance Ministry, will submit proposals on both the investment policy of the Social Insurance Fund and revised pension options, following the withdrawal of earlier proposals affecting higher pensions.
“This has been removed, so a new direction will emerge based on the actuarial study expected in the coming days,” he said, adding that no entirely new study will be required.
Timeline and next steps
Mousiouttas said June has been set as the milestone for submitting the first-pillar pension bill to Parliament, with discussions expected to take place between September and December 2026, allowing implementation in 2027.
According to Politis sources, plans for the investment policy of the Social Insurance Fund are expected to be announced on 23 March, while the government is set to present its proposals on provident funds on 30 March.
The minister reiterated that the implementation of the second pillar cannot take place immediately for technical reasons and will require at least three years.
System structure
Actuary Costas Stavrakis outlined the five main components of the new pension system during a presentation at the 30th SEK conference, noting that the second pillar will be “upgraded.”
Social partners expect the fund’s investment policy to focus on sectors that contribute to broader social development.