The decision has been made - Continuous meetings of the ESS to achieve the greatest consensus

• Tomorrow, Thursday, social partners will be thoroughly briefed on the investment policy of the TKA (Social Insurance Fund)

• What the actuarial study predicts regarding the 12% and the Independent Management Body of the TKA

The government has made the decision regarding the timetable it will follow for the submission of the bill on pension reform. According to information obtained by Brief, the intention of the Presidency and specifically of Marinos Moushouttas, Minister of Labour, is to submit the reform bill to the Council of Ministers by the end of June. This presupposes the completion of the ongoing social dialogue within the framework of the Labour Advisory Body (ESS).

The government aims to refer the relevant bill to the House of Representatives by early July at the latest. The bill will concern the first pension pillar, which is the Social Insurance Fund (TKA). This decision is final, despite the fact that views exist, mainly from the trade union movement and economic bodies, arguing that it would be more beneficial and effective to include the second pension pillar, which covers supplementary pension schemes like Provident Funds.

The Labour Advisory Body (ESS) is scheduled to meet tomorrow at 09:30. Mr. Moushouttas recently stated that as many ESS sessions as possible will take place within June so that it becomes feasible to submit the bill to Parliament before the Body adjourns for summer recess.

During tomorrow's ESS meeting, Dionysis Dionysiou, a senior official from the Ministry of Finance, is expected to attend in order to thoroughly brief social partners regarding the upcoming investment policy of the TKA. A relevant study has already been conducted by Costas Stavrakis, Actuary of the International Labour Office (ILO), which was revealed by Brief on May 20th.

According to the study, the creation of an Independent Body is envisioned to manage the investment account of the TKA. This body will be based on:

• International standards and governance principles.
• An effective governance structure with separation of roles, transparency, accountability, and independence in investment decision-making.
• Strengthening the financial governance of the TKA and, by extension,
• Better safeguarding the pension rights of the insured.
• Enhancing intergenerational fairness.
• Improving the long-term sustainability of the TKA by achieving higher returns within a specified framework of measured risk.

Tomorrow, social partners will be thoroughly briefed on the investment policy of the Social Insurance Fund.

Regarding the much-discussed issue of the 12% actuarial reduction, the political decision for a gradual decrease of the 12% deduction is final. The final regulation will be decided based on the actuarial study. As revealed by Brief on May 19th, the actuary's initial recommendations focus on the method of calculating and readjusting pensions.

For existing pensioners who received their so-called "old-age pension" at the age of 63 and are subject to the 12% actuarial deduction, the so-called "penalty", there will be a reduction in the deduction percentage depending on the span of years they have been retired. The study examines the additional pensions received by those who retired at age 63, which number 26. Based on the number of years the 12% has been deducted from them, there will be a staggered reduction. A specific time point may be set at which the actuarial deduction could be terminated for some pensioners.

Regarding newcomers to the "old-age pension," the right for individuals to retire up to the age of 67 will be applied for the first time. According to the new regulation being promoted, there will be a change in the calculation method. The main feature will be a staggered deduction, while those who wish to work up to the age of 67 and provided they continue to pay their social insurance contributions, will benefit from a provision ensuring they receive a type of "bonus." This "bonus" will be actuarially added to their pension, which will clearly be higher than it initially would have been.

Source: Brief