Pension reform to bring noticeable increases, says labour minister

Pension increases resulting from the planned reform of the social insurance system are expected to be noticeable, particularly for low-income pensioners, Labour and Social Insurance Minister Marinos Mousiouttas said on Sunday.

In an interview with Phileleftheros, Mousiouttas said the first phase of the reform, concerning the social insurance fund, could be implemented from January 1, 2027.

This, he said, would allow pensions to rise “to the extent that will be indicated by the final studies”, while also addressing existing distortions in the system.

These studies, he said, further pave the way for decisions on the fund’s governance model, its investment policy and the gradual repayment of the state’s debt to the fund.

Asked whether pension increases would be substantial, the minister replied that it is certain the rise will be felt by citizens.

Referring to the second pillar of the pension system, which concerns provident funds, Mousiouttas said it cannot move forward immediately.

Implementation will require at least two to four years, as the supervisory authority must first be upgraded and made independent, in line with requirements set by the relevant European authority.

On borrowing from the social insurance fund and its future investment policy, the minister said these issues will be determined in consultation with the finance minister, with whom he is due to meet in the coming days.

“With the implementation of the new investment policy, it will become clear how the funds will be invested,” he said.

Investments may continue to include placements in government bonds, as is currently the case, which are considered among the safest options, carrying lower risk, albeit potentially lower returns.

Regarding the 12 per cent reduction applied to pensions for those who retire before the age of 65, Mousiouttas said it will not remain as it is.

“There will be a downward adjustment,” he said, although he noted it cannot be abolished entirely, describing it as a key element of the broader discussion.

Asked whether the pension reform would place an additional burden on state finances, the minister said the aim is to avoid any strain or to keep it to a minimum.

On the hourly rate of the national minimum wage, Mousiouttas added that the study currently being prepared must take into account this long-standing demand by trade unions.