Pension reform, ways to boost low pensions, the sustainability of the Social Security Fund, and the next steps leading up to the submission of the relevant bill to Parliament were the focus of a meeting on Friday between the Minister of Labor and Social Marinos Mousiouttas and MEP and President of the Direct Democracy Party, Fidias Panagiotou.

In remarks following the meeting and responding to journalists’ questions about increases to low pensions, the Minister cited an example where the increase could reach 50%, but emphasized that this would not be a blanket increase for everyone. As he explained, the increases will be determined based on the number of years of contributions, the frequency of contributions, and other criteria, with each case being considered individually.

When asked where the funds for the increases would come from, given that there will be no increase in contributions or in the retirement age, the Minister stated that a new category of contributors, known as “income earners,” will be introduced. He explained that these are individuals who derive income from rent, stocks, or other sources not related to employment, and who will now be required to pay contributions, as is the case with the General Health System (GESY).

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At the same time, he noted that additional revenue will be generated by stepping up inspections for undeclared and illegal work, while noting that the Social Security Fund has seen a significant increase in revenue over the past year, due to improved inspections and growth in the labor force.

The Minister emphasized that all proposals regarding pensions must ensure the sustainability of the Social Security Fund, while also presenting the Ministry’s reform plan and its objectives.

At the same time, he said that discussions with social partners and political parties would continue throughout the summer, with the aim of finalizing the proposal.

According to the Minister, the goal is to submit the bill to Parliament in September, so that the necessary consultation can take place beforehand and as much consensus as possible can be reached.

He reiterated that the reform is scheduled to take effect on January 1, 2027, acknowledging that the timeline is particularly tight.

Mr. Mousiouttas emphasized that there is no question of raising contributions or raising the retirement age, noting that all proposals must be costed and accompanied by equivalent measures.

For his part, Fidias Panagiotou stated that Direct Democracy’s goal is to increase pensions as much as possible, while also reducing the cost of living for retirees, such as electricity costs.

At the same time, he noted that proposals had been submitted so that, if financially feasible, the pensions of those who have paid contributions for more than 25 years would approach €1,088.

The Minister replied that, based on actuarial studies, the Social Insurance Fund cannot support a minimum pension of €1,088.

Referring to the future management of the Fund, Mr. Mousiouttas revealed that, as of January 1, 2028, a Social Insurance Fund Management Authority is scheduled to be established, which will be able to make low-risk investments with the aim of generating additional revenue.

Regarding government support for low-income pensioners, the Minister noted that in certain cases, government assistance may be reduced as the pension amount increases. However, he clarified that government funds will be reallocated to other groups, such as informal caregivers, mothers, and new entrants to the labor market, without reducing overall government spending.

Finally, he clarified that the second pillar of the pension system (Provident Funds) will not be included in this bill but will be the subject of a separate discussion at a later stage.

Source: CNA