• The bill for the pension reform will be submitted to Parliament on September 20, 2026, with an implementation target of January 1, 2027.

• Gradual increases reaching up to 50% are projected for low pensions, while simultaneously ensuring the sustainability of the system.

• The retirement age limit remains at 65 years, while a substantial relief of the actuarial reduction is being promoted for those choosing early retirement.

• State borrowing from the Fund's reserves is terminated, and an independent Supervisory Authority is established for the investment management of the resources.

• The dialogue regarding the second pillar and the Provident Funds continues, with their full implementation estimated in three to four years.

The bill for the pension reform of the first pillar of the system will be submitted to the House of Representatives on September 20, 2026, regardless of the outcome of the dialogue with the social partners, stated the Minister of Labour and Social Insurance, Marinos Mousiouttas, during an event organized on Wednesday, July 1, 2026, by the Board of Directors of the Achilleas Kaimakliou Club, on the topic "Social Insurance Fund and the Pension System – What Changes."

As he stated, the pension reform, which is expected to be implemented as of January 1, 2027, "constitutes the most important and emblematic priority of the Nikos Christodoulides Government for 2026," characterizing it as "a conscious act of social justice."

"Regardless of whether there will be a final agreement with everyone before September, the legislation will be submitted to Parliament so that the discussion can begin with the legislative branch, because the final say belongs to Parliament," Mr. Mousiouttas noted.

Cycle of Contacts with the Parties

The competent Minister announced a cycle of contacts in the immediate period ahead with the parliamentary parties as well, so that the technical details of the bill can be explained by the actuary. The goal, as he explained, is "so that in September, when they officially have it before them, they will know the pluses, the minuses, what suggestions they will make, and what concerns they will table."

The Minister of Labour noted that it will be much better for everyone "if the social partners agree or consent to most points so that we can proceed with a single voice when discussing with the parliamentary parties. Even if this does not happen, we will move forward and everyone will then have to face their responsibilities."

Regarding the dialogue with the social partners, Mr. Mousiouttas stated that "there is a system that everyone, absolutely everyone, agrees needs to change. The differences that exist are about how much we will give and to whom we will give it. We go to the meetings with our partners with good will so that we can resolve existing queries."

Increases Up to 50% for Low Pensions

Analyzing the key aspects of the upcoming pension reform, the Minister set the adequacy of pensions and the reduction of the risk of poverty as a priority. "Our goal is to increase the basic pension to the maximum extent possible, without, however, affecting the capabilities and sustainability of the Social Insurance Fund," he noted.

According to the Minister, the greatest benefit of the reform is directed toward low and middle pensions. "In several of the lowest pension cases, the enhancement will approach 50% of the current pension, while for middle pensions, the increase will also move in double-digit percentages," he underlined, adding that the increases will be given gradually over a five-year depth, with 60% being paid during the first two years of the law's implementation.

Commenting on reports seeing the light of publicity, Mr. Mousiouttas stated that "the minimum pensions are not going to reach the figures that have been heard, at €1,088, €1,100, or €1,200. I wish I could tell you that they would reach €1,500 and €2,000. When you have a fund and there are constants that contributions do not change, neither from workers, employers, nor the State, and that the retirement age limit does not change, then the benefits it will give are specific. The only thing that can change, and here we await suggestions from employers and unions, is if they have well-studied proposals that differentiate what we will propose to them through the legislation."

The Most Important Changes Being Promoted

The Minister of Labour and Social Insurance also referred to the main changes being promoted without entering into details due to the continuation of the dialogue with the social partners.

As he explained, the retirement age is not increasing as it remains at 65 years; however, the opportunity is provided for those who wish to continue contributing until 67 years of age, thereby increasing their future pension.

At the same time, a substantial relief of the actuarial reduction is being promoted for those departing before the age of 65, from which, as he said, "both current and new retirees will benefit during the transitional period." Regarding this specific issue, he mentioned that there is a suggestion to abolish the 12%. "If you abolish it, you automatically drop the retirement limit from 65 years to 63. In no European country is the retirement limit decreasing; on the contrary, it is increasing. We said it will remain stable at 65 years. Every suggestion must carry the corresponding substantiation in money and philosophy," the Minister noted.

The system, according to Mr. Mousiouttas, is expanding to cover "new entrants into the labor market, informal caregivers, women who dedicated their lives to caring for their children, and people with disabilities," through the recognition of subsidized contributions.

Toward the direction of supporting the institution of the family and the vulnerable, increases are projected, according to the Minister, for the majority of invalidity and widows' pensions (calculated on the new basic pension), the increment for dependent children is improved, and the orphanhood allowance is upgraded. Parallel to this, the right to sickness and unemployment benefits is extended even after the age of 63.

An End to State Borrowing From the GSF

The Minister placed particular emphasis on the issue of managing the Social Insurance Fund (GSF) reserve, which currently amounts to €12 billion.

"One of the most important decisions the Government is taking is that state borrowing from the Fund stops," he said, explaining that the gradual return of the amount is beginning. To ensure transparency and efficiency, he stated that "an independent Supervisory Authority will be created, fully harmonized with European requirements, which will assume their management and investment." The GSF, he added, will evolve into a "strong investment fund working for the benefit of the insured individuals themselves."

Time Is Needed for the Provident Funds

Regarding the discussion on the second pillar of the pension system, which concerns occupational pension schemes and Provident Funds, the Minister stated that the dialogue continues, but its maturation requires a timeframe of three to four years.

"The unions want it to be mandatory. On the other side, the employers want it to be voluntary, as it is today. The State must find the golden ratio between the two so that an agreement can exist and a provident fund can be put in place, whether mandatory or voluntary," Mr. Mousiouttas noted.

He expressed his optimism at the same time, saying that despite the complexity of the matter, "I feel that we will find the golden ratio and move forward."

As Mr. Mousiouttas said, the effort is focused on reaching an agreement, which, however, does not mean immediate implementation. "It was accepted that implementation will take place after 3-4 years. It is clear and accepted by all that an agreement will be made on how this system will be created, and when that time comes, then the legislation, the supervisory Authority, and all those things that must precede will take place," he noted.

Source: ink.com