Three significant changes to the pension reform—concerning the timing of pension increases, the transition period, and widow’s and disability pensions, were presented by the Minister of Labor and Social Insurance, Marinos Mousiouttas. Speaking on the Alpha News program, he clarified that the goal remains to implement the reform as of January 1, 2027, provided that it is approved by the House of Representatives by the end of 2026. As he noted, the aim is for the bill to be submitted as soon as possible to the Cabinet and subsequently to Parliament, so that there is time for it to be voted on before the Christmas recess.
The first change concerns the faster implementation of pension increases, as the initial five-year period is reduced to three years. Specifically, retirees will receive 30% of the projected increase in the first year, an additional 30% in the second, and the remaining 40% in the third year, at which point the payment of the increase will be completed. At the same time, the transition period is being extended from five to fifteen years to ensure that retirees are not placed at a disadvantage by the new system.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
Explaining the second change, the Minister stated that during the transition period, the amounts calculated under the existing and new systems will be compared, with the beneficiary receiving the more favorable amount. “In both cases, the retiree will receive the higher of the two amounts, thus eliminating the problem that existed,” he noted. After the transitional period ends, a multiplier of 1.35 will be applied instead of 1.34, with Mr. Mousioutta arguing that these specific changes will not result in lower amounts compared to the previous system.
The third change concerns the improvement of additional conditions related to the granting of widow’s and disability pensions.
Special mention was also made of the issue of Social Security contributions on dividends, regarding which the Minister clarified that discussions are ongoing and no final decision has been made. According to the new proposal presented to the Labor Advisory Council, it is proposed to impose contributions on income from wages and dividends up to the threshold of two insurance units, which corresponds to approximately €22,000 per year.
This means that even in the case of a person with an annual salary of €10,000 and dividends of €90,000, the proposed social security contribution would be limited to the first €22,000 of their total income. According to the Minister, the goal is to address cases where individuals have a low salary and high dividends, thereby accruing pension rights based on limited contributions.
Regarding the 12% actuarial reduction for those who choose to retire at age 63, Marinos Mousiouttas clarified that there is no intention to abolish it entirely.
“Abolishing the 12% automatically means lowering the retirement age. There is no intention to lower the retirement age,” he stated. He explained that the planned reduction of the actuarial cut by 4.5 percentage points applies to the first five years of the reform’s implementation, while thereafter the principle of a reduction for early retirement and a reward for those who choose to remain in the workforce after age 65 will continue to apply.
Finally, the Minister emphasized that the dialogue with the social partners remains open, with suggestions being examined one by one, provided that the philosophy of the reform is not altered and the sustainability of the Social Security Fund is not jeopardized. He reiterated the government’s determination to move the bill forward, noting that the goal is to create a better pension system for citizens.
