The government’s intention to submit the pension reform bill to the Council of Ministers on July 1 has triggered an angry reaction from trade unions.
Union leaders told Politis that timelines are tight, stressing that the government’s proposals fail to achieve the objective of adequate pension income. On the other hand, employer organisations express confidence that sufficient time will be given to reach the widest possible consensus, noting that pension levels in all developed economies are linked to workers’ contributions over the course of their careers.
Labour Minister Marinos Mousiouttas told Politis that the pension bill will be presented to social partners during today’s meeting of the Labour Advisory Board, with the aim of submitting it to the Council of Ministers on July 1.
Despite the unanimous demand from social partners for a comprehensive reform aimed at ensuring adequate pensions, the government is moving ahead only with the first-pillar reform, namely the Social Insurance Fund.
The minister aims to hold intensive consultations with political parties over the summer so that the bill can be approved in time, with implementation of the new measures from early 2027. Changes to the bill remain possible based on proposals submitted, though its overall philosophy will not change.
Union reaction
The minister’s remarks sparked strong reactions from unions.
SEK secretary-general Andreas Matsas told Politis that “the government insists on flawed timelines, preventing the conditions needed to achieve adequate pensions”.
“We will do everything possible to include the second pillar, which concerns provident funds, so that adequate pensions can be ensured,” he added.
He noted there is no planning for provident funds, arguing that reform of the second pillar could be achieved much earlier than the three to four years outlined by the government.
“Planning for provident funds must happen now to avoid being faced with fait accompli situations in case of government changes or shifts in policy,” he stressed.
Matsas added it would be a mistake to submit to the Cabinet a bill that has not been agreed by social partners, emphasising that significant changes are needed to achieve pension adequacy.
“The government must answer whether what it is promoting is a comprehensive reform and whether it resolves the issue of pension adequacy,” PEO secretary-general Sotiroula Charalambous told Politis.
“We have repeatedly stressed that even with the proposed increases, some people will still have pensions below the poverty line,” she underlined.
According to Charalambous, “there are many gaps and problematic elements”. The only move, she said, is to incorporate a small allowance into pensions, adding that no plan has been presented regarding the poverty threshold.
She also criticised provisions on the 12% penalty for early retirement, noting it applies only to a five-year period and that, after the transition, those retiring early will need more years of contributions than today, 33 years.
“It is clear the government is investing more politically in the issue. For such a major matter, content is as important as timing,” she said.
She added that no effort has been made to utilise the tripartite committee to create a roadmap for expanding provident funds.
She also pointed to unresolved issues, including disability pensions for chronic patients, widowers’ pensions and unemployment benefits for those retiring at 63 while continuing to work.
DEOK president Stelios Christodoulou said: “We expected to have the bill two weeks ago to study it, and we were surprised to learn it will be presented today.”
“We are talking about a lengthy bill that requires sufficient time to examine,” he added, noting it would be better for such legislation to reach parliament with full consensus.
He also warned that parliamentary debate will be complex, as new MPs lack experience with how the Social Insurance Fund operates.
Employers strike milder tone
“We will examine the government’s proposals with interest, assess them and take a responsible stance for current and future generations,” OEB director general Michalis Antoniou told Politis.
“We are confident sufficient time will be given for dialogue and convergence where disagreements arise,” he said.
On adequacy, Antoniou noted that pension levels in developed economies depend on contributions made throughout working life.
He added that better adequacy requires introducing the second pillar and strengthening the third.
“If the government chooses to proceed with the first pillar, that is its right. We expressed our position but will not oppose it. We will work to ensure a balanced system with proper safeguards, given that a real reserve fund will be created requiring management rules and an independent body,” he said.
“We will review the bill carefully,” said KEVE deputy secretary-general Emilios Michael.
“On the second pillar, where significant differences exist with unions, more time will be needed for discussion. If the government decides to proceed first with the first pillar, it is fully respected,” he added.
According to Michael, pension adequacy depends on individual contributions to the Social Insurance Fund.
“The sustainability of the fund must be safeguarded as a top priority,” he stressed.
