Labor Minister Marinos Mousiouttas announced three changes to the pension reform bill following Monday’s meeting of the Labor Advisory Council. The changes provide for pension increases to be phased in over three years instead of five, the extension of the transition period from five to fifteen years, and improved eligibility requirements for widow’s and disability pensions. Mr. Mousiouttas stated that the agreement on these three points represents a step forward, reiterating that the government’s goal is to implement the new system on January 1, 2027, provided that the bill is passed by Parliament by the end of 2026.
Specifically, as the Minister noted, the pension increases will be paid out gradually over a three-year period, with 30% of the increase paid in the first year, 30% in the second, and the remaining 40% in the third year.
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“It was one of the proposals that had been put forward. It was one of our intentions, and once we determined that it could be implemented, we announced it today to the social partners,” said Mr. Mousiouttas.
He also noted that the problem regarding the potential increase in contributions appears to have been resolved because the transition period is being extended from 5 years to 15 years.
“So for the next 15 years, if—upon comparing the old and new systems— it turns out that the old system appears to be better than the new one, the old system will apply to the retiree or future retiree,” the Minister explained.
At the same time, he noted that “the eligibility requirements for widow’s and disability pensions are being improved, which are a consequence of this extension of the transition period.”
“I believe that with these three points we have covered so far, we have taken a step closer than we were a week ago,” said the Minister.
“The intention is, by examining the remaining proposals submitted by the social partners, to be able to get even closer,” he added.
“You understand that there are issues we won’t be able to address, either for philosophical reasons or because that’s how our proposal was drafted. However, our intention is to make improvements to the bill wherever possible, so that the government’s positions align even more closely with those of the social partners,” he said.
He clarified, however, that “this does not change the intention—which has always been and remains—that the bill will soon go to the Cabinet and then to Parliament.”
He said that discussions with the social partners could continue on Monday and Thursday, so that if, after the bill is submitted, an additional change is agreed upon, “there will be flexibility to incorporate it into the bill already submitted to the House of Representatives.”
“So the dialogue and discussions will continue until the debate begins in the House, but even then, it goes without saying that our primary interlocutors are the social partners, and during the debate in the House, we will again have the flexibility to consult with the social partners, in addition to the parties that make up the relevant committee,” said the Minister.
Mr. Mousiouttas emphasized that the intention is for the new system to take effect on January 1, 2027, “so that people can feel the changes that will take place. For it to begin implementation in 2027, it must be passed by Parliament in 2026. Now, if there are any technical difficulties after the bill is passed, there are ways to address them, and we will work through them.”
“We are trying, while also listening to their suggestions, to adapt our proposal so as to allay any concerns that may have existed. I believe we have largely succeeded in doing so today. Of course, we’re not done yet. On Thursday, we’ll be reviewing the next proposals they’ve put forward,” said the Minister.
Regarding the bill on investment policy and the bill on pension funds—which constitute the second pillar—Mr. Mousiouttas emphasized that “it is clear that there is currently no legislation in place.”
He explained that “what is needed is—let me call it—a gentlemen’s agreement between the state and its partners that will outline the general framework as well as the timeline for implementation.”
“The bill on pension reform is the most advanced of all, but at the same time we are discussing the rest as well, with the goal of reaching a conclusion on those as soon as possible. Because, yes, a comprehensive reform includes all three, but we do not believe that one should stand in the way of the others,” he added.
When asked to comment on the delay in submitting the bill, Mr. Mousiouttas replied that “The effort has been—and continues to be—to achieve the greatest possible convergence with the social partners following the submission of their positions last Thursday.”
“Everyone came with proposals, and we have responses to these now-official proposals. Some will be positive, such as the ones I mentioned today. Some will be negative, and some require further consideration—there may be elements we can adopt,” he added.
“We’re not saying we have the final word; we also need the help of our social partners. We must carry out the reform while taking into account the sustainability of the Social Security Fund—and, of course, pension increases and the sustainability of public finances,”he noted.
The Minister stated that the legal review by the prosecutor’s office is being finalized. “As soon as we have the bill in its new form, it can proceed to the Cabinet. The framework is in place, and minor adjustments are being made depending on what is decided by the Labor Advisory Council,” he said.
He clarified that “it never even crossed our minds that we would go to Parliament and ignore the Labor Advisory Council.
“However, on the other hand, under no circumstances do we want the timelines to be altered so that the pension reform can be implemented,” he concluded.
