Several issues remain unresolved despite the positive developments that have characterized the pension reform process so far, said on Friday SEK Secretary-General Andreas Matsas, explaining that based on the current data, and taking into account the second pillar, “I believe we are still far from reaching a definitive conclusion and resolution regarding the reform.”
In remarks made after the conclusion of the SEK Pan-Cyprian Conference, which took place today at 9:30 a.m. at the union’s headquarters, Andreas Matsas also spoke of an alternative option to apply any final outcome retroactively “in the event that we are, in fact, forced to extend the timeframe.” He also said that “the goal remains to implement the reform on January 1, 2027,” adding that “however, the intention is not to suggest that the timeline is more important than a reform that fails to ensure adequate pensions, and may even create problems for future retirees.”
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
It should be noted that during today’s session of the Pan-Cyprian Conference of SEK, the framework of the proposed pension system reform was evaluated, and decisions were made—such as a zero increase in the retirement age and in contributions (beyond those already agreed upon), and no reduction in existing or future pensions.
Regarding the draft decisions of the SEK agreed upon at the conference, Mr. Matsas noted that specific decisions have been made, highlighting the fact that, for the first time, “the government’s borrowing from the Social Security Fund is being abolished and effectively terminated,” and that, for the first time, the process of repaying the debt is beginning; at the same time, as he noted, “conditions and prerequisites are being established for the creation of an independent body that will be responsible for managing both the reserve and investment policy.” He also noted that “specific conditions are being set so that SEK will accept the proposed framework as is.”
He noted that it is important “to support low-income retirees through further social support under Pillar 0, so as to ensure that no pensioner receives a pension below the poverty line.”
He also said that “it is important to ensure that the reform is comprehensive, including both the second pillar—which consists of provident funds—and the ability to establish the framework for Pillar 3, which is private insurance, for those who are interested, have the means, and choose to supplement and enhance their pension benefits.” He added that a prerequisite has been set for further discussion and better regulation and management of the 12% actuarial adjustment, in conjunction, of course, with the need to ensure social justice for widowers who lost their spouses before August 1, 2018.
The government’s proposal for 12% differs from the SEK’s proposal
In response to a question regarding the 12% penalty, Mr. Matsas stated that there is an improved proposal from the government compared to the two previous proposals that had been presented to us, noting, however, that this proposal “falls far short of the proposal we have submitted, given that it does not fully eliminate the impact.” He explained that the proposed measure applies only to the basic pension and not to the proportional pension; furthermore, as he said, “it does not provide for a definitive—or even gradual— elimination of this burden, given that there are workers who have essentially been forced to take their pension before reaching the retirement age, in order to meet their basic livelihood needs, given that we had endured a prolonged period of economic crisis.”
He also said that many people had been left out of the labor market, given that unemployment had reached 19% at the time, adding that even workers who were able to re-enter the labor market did not earn the same wages as before. “So, there are varying reasons why someone either chooses or is forced to retire early. This is another factor that calls for the most socially just and comprehensive management of this issue possible,” he said.
When asked about the differences of opinion regarding the Provident Funds discussed yesterday, Thursday, at the meeting of the Labor Advisory Council, he noted that “It was the first time, it must be said, that the issue of provident funds was discussed in the Labor Advisory Council. Discussions have previously taken place before the Technical Committee, and now the issue is being raised at the ‘political’ level, in the Labor Advisory Council.”
He noted that “we are awaiting the government’s position, because the necessity—not merely the usefulness— the necessity of a universal system concerning the second pillar—the provident funds—and yet have not yet heard the government’s position on how to implement this objective.” Explaining SEK’s position on the matter, he stated that “pension funds, as a right arising from collective bargaining agreements, cannot be altered. There can be no interference in the way existing welfare funds operate or in the rights arising from them, precisely so that we can ensure adequate pensions.”
He added that SEK has proposed the creation of a supplementary horizontal pension fund that would cover and apply to all workers, “so that it can achieve the goal for which we collectively and comprehensively initiated the reform of the pension system: to ensure adequate pensions for all workers.”
When asked about the timeline for submitting the bill to Parliament, Mr. Matsas stated that the goal of implementing the reform on January 1, 2027, remains unchanged and expressed the hope that opportunities for consensus will be created within the framework the Labor Advisory Council, so that the bill can be brought before Parliament as soon as possible. He also emphasized that “for us, there can be no reform unless it is comprehensive and unless it creates the conditions and prerequisites for adequate pensions.”
He added that SEK has submitted a supplementary proposal stating that, should further discussion of the issues related to comprehensive reform be necessary, whether in the Labor Advisory Council or before the House of Representatives, “whenever such a discussion takes place, it should and will be able to have retroactive effect and application, so that retirees who are looking forward to an improvement in their pension benefits starting in January 2027 are not negatively affected.” He emphasized that “the goal is not to complete a process that will be unable to produce the positive results we have described.”
Policy on Collective Bargaining Agreements for 2027
It should be noted that the decisions of the SEK conference also include the union’s list of demands regarding the collective bargaining agreements to be renewed in 2027. Among other things, this concerns the duration of collective bargaining agreements—with a general principle of a two-year term—the demand for a 3.5% pay increase, “and, at the same time, the strengthening of welfare funds, so that we can provide greater impetus and support for pension reform, as well as the strengthening of welfare funds, so that workers can more effectively manage the problems arising from the high cost of living we are all experiencing,” said Mr. Matsas.
The text of the resolutions refers to the cost of living and the need for a concrete, medium-term strategy that includes wage increases. The union is also calling for the incorporation of European Directive 2022/2041 into national law with the aim of expanding the coverage of workers under collective bargaining agreements.
Official concern is expressed regarding the uncontrolled, as stated in the text of the resolutions, granting of work permits to workers from third countries, as well as the phenomenon of worker leasing and subleasing. On this specific issue, he calls on the Minister of Labor to seriously consider revising the current strategy for the employment of workers from third countries.
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Source: CNA
