The pension reform bill presented to the social partners includes proposals for an increase in pensions for all 123,000 old-age pensioners and a reduction of the 12% penalty for early retirement at the age of 63, Minister of Labor and Social Insurance Marinos Moushouttas has said.
In statements after presenting to the Labour Advisory Board the bill and the government’s proposal for the pension reform on 19 August, the Minister said that all 123,000 old-age pensioners will be positively affected.
Around 50,000 pensioners, he added, will have an increase of over €100 per month and around 60,000 will have an increase of less than €100 per month over a five-year period.
"This means immediate income support for thousands of families at a time when the cost of living is putting more pressure on the elderly and households with lower incomes. The most important social choice of the reform is to give the greatest support to the lowest pensions," the Minister stressed.
Future pensioners with low earnings may see increases of 5% to 60% compared to the existing system, he pointed out.
Regarding the 12% reduction in the event of early retirement, the Minister said that there is a proposal to reduce the actuarial adjustment of 12% to 7.5% in the basic part of the pension.
He added that the discussion will continue during the next meeting on 28 August, with the aim of implementing the reform from 1 January, 2027.
The Minister said that the discussion on the pension reform began about two years ago and today the effort is intensifying so as there is a positive result with the greatest consensus possible, or even unanimity. He added that the bill will then be promoted to the Council of Ministers and the House of Representatives, "so that people can feel the difference from February 1, when they will receive the first bank transfer based on the reform."
"This reform has three key words, namely justice, adequacy and sustainability. Justice because it supports those who are most in need, adequacy because it really increases the pension income and sustainability because it protects the fund for future generations", the Minister said.
Meanwhile, Chief Actuary, Costas Stavrakis, said that there will be a burden on public finances in the first five years of €50 million euro each year.
He added that according to studies, in the next 40 years there will be a surplus.
Asked about the utilization of the surplus, Stavrakis said that it is planned to create a governance mechanism for the purposes of managing these funds that will go towards investment, which were not currently available.
“Now a real reserve is being created, which will be invested. The main resource of this real reserve are the future surpluses. 100% will go to this investment account and gradually, with the repayment, they will also go to this investment account," he went on to say.
Stavrakis noted that "we want to ensure that this money has proper governance based on international standards. It is important that this governance is done in the right way and that they also ensure better returns, so that there are further improvements in benefits,” he concluded.
Social partners also made statements saying that they will need to study the bill in depth.
(Source: CNA)
