The bill on pension reform for the first pillar of the system will be submitted to the House of Representatives on September 20, 2026, regardless of the outcome of the dialogue with social partners, said the Minister of Labor and Social Insurance, Marinos Mousiouttas, at an event organized on Wednesday, July 1, 2026, the Board of Directors of the Achilleas Kaimakliou Association, on the topic “Social Insurance and Pension Fund—What’s Changing.”

As he noted, the pension reform, which is expected to take effect on January 1, 2027, “is the most important and emblematic priority of the Nikos Christodoulides government for 2026,” describing it as “a conscious act of social justice.”

“Regardless of whether a final agreement is reached with all parties before September, the bill will be submitted to Parliament to begin discussions with the legislative branch, because Parliament has the final say,” noted Mr. Mousiouttas.

Round of Meetings with Political Parties

The minister in charge announced a series of meetings in the immediate future with the parliamentary parties so that the actuary can explain the technical details of the bill. The goal, as he explained, is “for them to be aware of the pros and cons, what suggestions they will make, and what concerns they will raise by September, when they will officially have the bill before them.”

The Minister of Labor noted that it would be much better for everyone “if the social partners agree or, at the very least, reach a broad consensus so that we can speak with one voice when we discuss the matter with the parliamentary parties. If that does not happen, we will move forward on our own, and everyone will have to face up to their responsibilities.”

Regarding the dialogue with the social partners, Mr. Mousiouttas noted that “there is a system that everyone—absolutely everyone—agrees needs to change. The differences lie in how much we will give and to whom we will give it. We are approaching the meetings with our partners in good faith so that we can resolve any outstanding issues.”

Increases of up to 50% for low pensions

Analyzing the key aspects of the upcoming pension reform, the Minister prioritized pension adequacy and reducing the risk of poverty. “Our goal is to increase the basic pension as much as possible, without, however, affecting the capacity and sustainability of the Social Security Fund,” he noted.

According to the Minister, the greatest benefit of the reform will go to those receiving low and middle-income pensions. “In many of the lowest-income pension cases, the increase will approach 50% of the current pension, while for middle-income pensions, the increase will also be in the double digits,” he emphasized, adding that the increases will be phased in over a five-year period, with 60% to be paid out during the first two years following the law’s implementation.

Commenting on reports that have come to light, Mr. Mousiouttas stated that “Minimum pensions will not reach the figures that have been mentioned—€1,088, €1,100, or €1,200. I wish I could tell you that they’ll reach €1,500 or €2,000. When you have a pension fund and there are fixed parameters—meaning that contributions don’t change, neither for employees nor for employers, nor the government’s, and the retirement age remains unchanged, then the benefits it will provide are fixed. The only thing that can change—and here we are awaiting proposals from employers and unions—is if they have well-thought-out proposals that would differ from what we will propose to the legislature.”  

The key changes being proposed

The Minister of Labor and Social Insurance also referred to the key changes being promoted without going into detail, given the ongoing dialogue with the social partners. 

As he explained, the retirement age is not being raised, as it remains at 65; however, those who wish to do so will be able to continue making contributions until age 67, thereby increasing their future pension.

At the same time, a substantial reduction in the actuarial adjustment is being implemented for those who retire before age 65, which, as he said, “will benefit both current and new retirees during the transition period.” On this specific issue, he noted that there is a proposal to eliminate the 12% reduction. “If you abolish it, you automatically lower the retirement age from 65 to 63. In no European country is the retirement age being lowered; on the contrary, it is being raised. We have said that it should remain fixed at 65 years. Every proposal must be backed by corresponding justification in terms of both cost and policy rationale,” the Minister noted.

According to Mr. Mousioutta, the system is being expanded to cover “new entrants to the labor market, informal caregivers, women who have dedicated their lives to caring for their children, and people with disabilities,” through the recognition of subsidized contributions.

To support the institution of the family and vulnerable groups, the Minister announced increases in the majority of disability and survivor pensions (calculated based on the new basic pension), the supplement for dependent children is being increased, and the orphan’s allowance is being raised. At the same time, eligibility for sickness and unemployment benefits is being extended beyond age 63.

End to government borrowing from the TKA

The Minister placed particular emphasis on the issue of managing the TKA’s reserve, which currently stands at €12 billion.

“One of the most important decisions the government is making is to stop the state from borrowing from the Fund,” he said, explaining that the gradual repayment of the amount is beginning. To ensure transparency and efficiency, he noted that “an independent Supervisory Authority will be established, fully aligned with European requirements, which will take over the management and investment of these funds.” The TKA, he added, will evolve into a “strong investment fund that will work for the benefit of the insured themselves.”

It Takes Time for Pension Funds

Regarding the discussion on the second pillar of the pension system, which concerns occupational pension plans and Provident Funds, the Minister noted that the dialogue is ongoing, but that it will take three to four years to come to fruition.

“The unions want it to be mandatory. On the other hand, employers want it to remain voluntary, as it is today. The government must find a middle ground between the two in order to reach an agreement and establish a pension fund, whether mandatory or voluntary,” noted Mr. Mousiouttas.

He also expressed his optimism, saying that despite the complexity of the issue, “I feel that we will find the middle ground and move forward.”

As Mr. Mousiouttas said, the effort is focused on reaching an agreement, though that does not necessarily mean implementation. “It has been agreed that implementation will take place in 3–4 years. It is clear and accepted by all that an agreement will be reached on how to establish this system, and when the time comes, then the legislation, the supervisory authority, and all the necessary preparatory steps will be put in place,” he noted.

Source: CNA