The pension reform bill, incorporating the changes made so far, is expected to be submitted to the social partners by tomorrow, said Labor Minister Marinos Mousiouttas, who reiterated the government’s intention to submit the bill to the Cabinet and Parliament as soon as possible.
In remarks made after today’s session of the Labor Advisory Council, Mr. Mousiouttas noted that it was one of the most interesting meetings today and took place in an exceptionally positive atmosphere, despite the differences of opinion that exist, stating specifically, “Don’t expect any surprises today like there were last time,” adding that “it remains to be seen whether and to what extent there is room for any changes, both on these issues and on others, which I mentioned as being of lesser importance.”
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
Revised pension bill in the hands of social partners
Revised pension bill in the hands of social partners
He reiterated that the target date for implementing the reform remains January 1. According to the Minister, the KEBE’s position has been submitted in writing, and the OEB’s positions are also expected; he explained that even after the bill is submitted, additions and amendments may still be submitted.
Upcoming Schedule
Mr. Mousiouttas also outlined the schedule for the body’s upcoming sessions, noting that the Provident Funds will be discussed on October 29. “October 29 is a Thursday. Yes, it is the last session of the month, and during that session, the Labor Advisory Council will begin its discussion of the Provident Funds, which have so far been discussed in depth in the technical committees.”
He also said that by the 20th of the month, proposals from the social partners will have been submitted, for which explanations and clarifications will be requested, adding that on the 27th of the month, an analysis will be conducted of these submitted proposals, and on the 29th, the entire package will be forwarded to the Labor Advisory Body, along with our own proposals, so that the dialogue regarding the Provident Funds can move forward.
The Minister expressed optimism regarding the timely submission of the pension reform bill. When asked whether, given the schedule of meetings and timelines, it would be possible to submit the bill to Parliament on time, the Minister replied “I am optimistic,” while his response regarding the timing of the bill’s submission to the Cabinet was equally terse. “As soon as possible,” he said, clarifying afterward that this meant in less than a month, while he avoided giving a specific date, leaving the exact timeline open.
“I’m not saying it because I don’t want to tell you. The reason we haven’t gone to the Cabinet yet—even though we could have—is that we’re awaiting the final opinion from the Legal Service on the bill. Since I know that the bill has already been largely reviewed, we expect it to be finalized within the next few days, at which point we’ll be able to move forward,” he said.
He also noted that the meetings and discussions will continue and, “if consensus emerges on an issue where we have not yet reached agreement, nothing will prevent us—not even the Cabinet’s decision—from raising the matter in Parliament, both verbally and in writing, of course, that on this specific point we have revised our position.” He emphasized that “the dialogue is ongoing, and we mean it. It’s not just about attending meetings.” As Mr. Mousiouttas emphasized, the guiding principle is the Fund’s sustainability and public finances.
Provident Funds and Widows’ Pensions
Regarding what was discussed today, Mr. Mousiouttas noted that the discussion centered on five main points, including the 12% actuarial reduction for early retirement at age 63. “We asked to hear the trade unions’ positions again in detail. We did not respond to anything, but we wanted to hear their positions again to see if there is any way they could be reconciled with the proposal we have made, and in fact, we have presented it in three variations, which we mentioned last time.”
When asked about the possibility of changes to the 12% actuarial reduction, the Minister of Labor stated that the Ministry had once again listened to the positions of the social partners, without committing to any changes, either on this specific issue or on the other four topics discussed.
“The point is not that, just because we’ve said something, it’s set in stone,” he said, clarifying that the goal is to examine whether there is room for adjustments. He emphasized, however, that the financial capabilities of both the Fund and the state are always taken into account to ensure their sustainability, as all the requests made entail a financial cost. He added that the Ministry will examine whether adjustments can be made so that, if feasible, one or more of the requests put forward by the social partners can be met.
He also said that the issue of pension amounts was raised, but primarily regarding the amount of the low-pensioner allowance, noting that there is a request from organizations, “such as this one, that it should, instead of the 910 euros we proposed, reach the so-called poverty line, which is 1,130 euros.” He explained that this change would entail significant financial costs. “However, because we want to exhaust the dialogue, we wanted to hear their views to see if there is any room for any changes. We have not taken a position yet. We are waiting to review our actuarial studies again to determine whether there is a possibility of adjustment on any or all of these issues,” he said.
He also noted that the issue of widowers’ pensions was raised, for those who lost their spouses before January 1, 2018, as well as the issue of Provident Funds, regarding which labor unions have again stated that the discussion should take place in paralleland that we should reach a framework agreement before the legislation is passed—at least with regard to the first pillar.
He noted that they have again raised this issue with the social partners regarding the expediting of meetings on the Provident Funds. He also mentioned that two meetings will be held on the 20th and 27th of this month, and on the 29th, the issue will be discussed at the Labor Advisory Council.
“So, within the next 15 days, we will have the partners’ positions regarding the second pillar, and then we will present our own positions, in an effort to reconcile our views, so that, if possible, a framework agreement can be reached on the second pillar, which we also consider important as a supplement to pension benefits,” he said, noting that there are other issues—of lesser importance but still significant, mainly of a technical nature—that are currently being addressed.
Employers also raised the issue of dividends, as the Minister mentioned. “We made it clear that the issue of dividends, as we have framed it, has evolved. We had mentioned this last time as well, but we confirmed today that we are referring to dividends up to two social security account units.”
He explained that dividends will apply to income up to 23,000 euros. “So, if someone has an annual income of 15,000 euros—for the sake of argument, from their salary—and also receives a dividend of around 30,000 euros, that is, 15,000 and 30,000 euros, only the portion up to 23,000 euros will be subject to Social Security contributions. “So, 15,000 euros will come from his salary and 8,000 euros from the 30,000 euros in dividends,” he said, noting that this essentially introduces a cap.
Examples of the reform
Regarding the taxation of dividends—an issue discussed today—the Minister said that there has recently been a reduction in the relevant tax rate. He described the provision regarding dividends as fair and a step in the right direction, pointing out that, according to data, a large number of people who report both wages and dividends declare monthly wages in the range of 500 to 750 euros, which, as he clarified, is legal. He added that these are annual salaries ranging from 9,000 to 10,000 euros, based on which these individuals would be eligible for a social pension and a low-pensioner’s allowance. “We are trying to address this concern—this ‘injustice,’ in quotes—through the issue of dividends,” he said, explaining that with the introduction of the cap, everyone will be able, through their own contributions, to receive the pension to which they are entitled, rather than receiving welfare benefits. In conclusion, he noted that work on the bill is continuing, adding that the positions of the social partners were heard once again during today’s meeting.
When asked about the pension calculation examples released by the Ministry, he stated that “these are not affected by what we are discussing, at least not for the worse.” He said that the figures being made public are based on data from 2024 and can be updated once the bill is approved by Parliament.
According to illustrative examples released by the Ministry of Labor and Social Security regarding pensions for low-, middle-, and high-income earners, the proposed pension reform calls for increases in low- to middle-income pensions of up to 34%. Specifically, for individuals with 25 years of contributions and seven years of subsidized contributions, the pension increases from €497 to €667; for those with 35 years of contributions and seven years of subsidized contributions, it rises from €642 to €827, while for those with 42 years of contributions and seven subsidized years, it rises from €762 to €976.
Pension increases for middle-income earners reach up to 11%. Specifically, for individuals with 25 years of contributions and seven years of subsidized contributions, the pension increases from €921 to €1,019—an increase of €98—while for individuals with 35 years of contributions and seven years of subsidized contributions, it increases from €1,258 to €1,341—an increase of €83. For individuals with 42 years of contributions and seven subsidized years, the pension increases from €1,524 to €1,611, or by €87.
According to these examples, there are no reductions for high-income earners, while in some cases there are small increases. Specifically, for individuals with 25 years of contributions and seven subsidized years, the pension increases from €1,223 to €1,271, or by €48, while for individuals with 35 years of contributions and seven subsidized years, it increases from €1,706 to €1,713, or by €7. For individuals with 42 years of contributions and seven years of subsidized contributions, the pension increases from €2,032 to €2,034, or by €2.
It should be noted that these examples are based on 2024 figures and reflect the full implementation of the reform.
