The pension reform provides for increases for all retirees, with greater support for those receiving the lowest pensions, according to statements made by the Minister of Labor and Social Security, Marinos Mousiouttas, in interviews with the Sunday editions of the newspapers “O Fileleftheros” and “I Kathimerini.” The reform also includes social protection measures for mothers, people with disabilities, informal caregivers, students, and new entrants to the labor market.
Mr. Mousiouttas states that the reform, the first since 1980, aims to create a fairer, modern, and sustainable system that will provide adequacy and security for current and future retirees.
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He reiterates that the increases will be granted to everyone, based on criteria such as years of service and the amount of contributions, with the lowest pensions receiving the greatest boost.
According to the Minister, more than 51,000 of the 123,212 current pensioners of the Social Insurance Fund are expected to receive an increase of more than €100 per month. The increases will be phased in over a five-year period, with the exception of those currently receiving pensions of up to €600, for whom the minimum increase of €30 will be paid starting in the first month the reform takes effect.
As an example, he notes that a retiree with a full working life who receives €504 can expect a total increase of approximately €250 over the course of five years. For those who also receive the “small supplement,” it clarifies that the amount of the supplement may be reduced due to the increase in the pension, however, their total income will not be lower than it is today.
When asked whether there will still be people living below the poverty line after the reform, the Minister answered in the affirmative, noting that addressing poverty is not limited to the Fund’s pension.
He adds that the targeted Low-Income Pensioner Allowance will continue to be provided by the state to eligible recipients.
Regarding the 12% actuarial reduction for retirement at age 63, it states that this cannot be completely abolished, as doing so would affect the Fund’s sustainability and would be equivalent to reinstating the retirement age limit at 63.
The government’s proposal provides for a 4.5% reduction in the base portion of the pension, limiting the cut there to 7.5%.
At the same time, the state will pay contributions for three years for each child to mothers who take a leave of absence from work for caregiving purposes. Corresponding pension units will be granted for life to people with disabilities and informal caregivers, while students and new entrants to the labor market will be credited with units for one year.
For widow’s pensions, changes are planned in the calculation of the basic pension. As for the approximately 4,300 men who became widowers before January 1, 2018, and do not receive a widow’s pension, the Minister notes that extending this entitlement would entail a cost of tens of millions of euros annually and cannot be decided without corresponding funding.
To finance the reform, he states that the Fund’s reserves will no longer be lent to the state but will be deposited into its investment account, while arrangements have been made for the repayment, over time, of the government’s existing debt to the Fund. He also assures that no aggressive investment policy will be pursued.
Referring to the employment of workers from third countries, Mr. Mousiouttas describes it as necessary due to full employment and a labor shortage. He emphasized, however, that there would be zero tolerance for abuse or exploitation, noting that inspections are being stepped up, particularly in the construction and tourism sectors, and that violations are being brought before the courts.
The Minister states, finally, that he is open to well-documented proposals, provided that they do not alter the philosophy of the reform and that any additional expenditure is accompanied by savings of equal value. The goal remains to implement the pay increases as of January 1, 2027.
Source: CNA
