The Labor Advisory Body (LAB) is moving forward with two additional key issues concerning the investment policy of the Social Insurance Fund and the second pension pillar, namely the Provident Funds.

These important topics are expected to be discussed within the framework of three upcoming LAB meetings to be held before the end of March.

The decision was taken during yesterday’s session, where employers’ organizations and trade unions continued submitting questions and requests for clarifications to the actuary of the International Labor Organization regarding the upcoming pension reform.

Regarding the investment policy of the Social Insurance Fund, there appears to be a shared understanding among members of the tripartite cooperation that the time has come to revise the investment approach of the Fund’s surpluses.

So far, investments have been limited to internal lending to the state.

All organizations are expected to submit memoranda outlining their positions.

Members of the LAB are focusing their proposals on low-risk investment strategies aimed at securing solid and stable returns.

With regard to the second pension pillar, the Provident Funds, the Ministry of Labor stated that the government aims to convince social partners that it is not feasible to implement it simultaneously with the first pillar, which is the Social Insurance Fund.

It is noted that both employers and trade unions insist on including Provident Funds in the first phase of the pension system. “This linkage of simultaneous implementation cannot be achieved,” Mousiouttas said yesterday.

He added that a “timeline for discussions” and the general framework of how the Ministry views the second pillar will be presented soon.

During the upcoming LAB meetings, there will also be discussions on linking the Welfare Deputy Ministry’s fund with the Social Insurance Fund, in order to establish a new policy regarding benefits for low-pensioners.

In his statements yesterday, the Minister of Labor also referred to the controversial issue of the 12% actuarial reduction.

He noted that this issue falls within the discussion of the first pillar.

He added that, alongside the investment policy of the Social Insurance Fund, the repayment of the state’s debt to social insurance, and the overall pension reform, the 12% reduction is included among the issues to be addressed in the first stage of the process.

Regarding the timeline, Mousiouttas stated that June has been set as the milestone for submitting the bill on the first pillar to Parliament. The discussion in the new Parliament is expected to take place between September and December 2026, with the aim of implementation in 2027.

Mousiouttas also announced that a proposal for a new framework regulating overdue social insurance contributions will soon be submitted to the Council of Ministers, aiming to facilitate employers, businesses, and citizens.

As he explained, the plan follows a similar philosophy to the previous two schemes and will span four years instead of 54 months, with the goal of being promptly submitted to Parliament and discussed on an urgent basis.

He also noted that within the current month, a bill on minimum wage adequacy will be submitted to the House of Representatives. This includes, among other provisions, the development of an action plan to promote collective agreements.

The goal, he said, is for collective agreements to reach 80%, with the action plan expected to be completed by September 2026.

Source: Brief