The pension system reform is moving toward final decisions, with the government finalizing the key parameters of its proposal before officially submitting the relevant bill.
Speaking after his meeting with the Labor Advisory Council, Labor Minister Marinos Mousiouttas emphasized the need to safeguard incomes and made it clear from the outset that “no one’s pension will be reduced.”
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At the heart of the proposal is a revision of the actuarial reduction, which is being lowered by 4.5 percentage points from 12% and is now capped at 7.5% of the base pension. The measure directly affects approximately 40,000 current retirees, as well as another 40,000 citizens who are expected to retire over the next five years amid an aging population.
According to the relevant minister, the cost is estimated at 24 million euros for current beneficiaries and an additional 12 million cumulatively over the next five years, while, taking into account the parallel phased increases, the actual benefit will average around 6%.
At the same time, the plan incorporates significant social protection provisions, providing for the state to cover social security contributions for five specific categories of citizens, such as mothers caring for their children for three years, people with lifelong disabilities, informal caregivers of the elderly or dependent individuals, as well as students, graduates, or military personnel during their first year of entering the labor market.
The total cost of these benefits is expected to be presented in detail within the coming week by the Minister of Finance.
Special mention was also made of the Social Insurance Fund’s investment strategy, which will follow European standards and the model of the Hydrocarbons Fund, by utilizing the repayment of government debts and surpluses. At the same time, the bill includes a provision for conducting an actuarial study over a five-year period, which, if deemed absolutely necessary to maintain the increases, could potentially open a discussion on adjusting contributions.
As Mr. Mousiouttas emphasized, recalling the large loans that the Republic is repaying through 2031, “we do not want to take actions that would burden future generations.”
In closing, the Minister of Labor reiterated the executive branch’s willingness to engage in meaningful dialogue with labor unions and employers, while setting the maintenance of overall fiscal balance as an absolute limit. “We do not consider ourselves infallible or above reproach. We are open to hearing suggestions, evaluating costs, and adjusting our internal priorities. What we cannot do, however, is further increase the overall cost,” he noted.
