The Labour Ministry is under pressure to submit pension reform bills to parliament by the end of June, as four significant decisions on key aspects of the reform remain outstanding. The government wants the pension reform to take effect on January 1, 2027.
The decisions pending in the coming weeks concern: whether to extend the subsidy for hotel industry workers; the level of the new minimum basic pension; the reduction of the 12% retirement penalty for those retiring at 63; and the investment policy for the Social Insurance Fund.
A new session of the Labour Advisory Body is expected this week to review progress on the pension reform. The body normally meets on Mondays, but today’s session has been displaced by the 63rd Representatives Congress of PASYDY. The Labour Minister will set a new date.
A meeting between the President of the Republic and SEK is also pending, customarily held after SEK’s island-wide electoral congress, at which current labour issues are expected to be discussed.
Hotel industry subsidy
The government had already decided to support hotel workers for April following a sharp drop in tourist arrivals in March due to the Middle East crisis. Both hoteliers and trade unions have since called for the subsidy to be extended. Hoteliers have requested support for May and June, while unions have suggested a month-by-month approach. A decision from the Labour Ministry is expected shortly.
Minimum basic pension
Labour Minister Marinos Moushouttas has said there will be a “generous increase” to the basic pension, though it will remain below the minimum wage of €1,088. The low-pension supplement, currently paid separately to low-income pensioners, is to be folded into the basic pension so that recipients receive a single payment.
Early retirement penalty
The reduction of the 12% penalty applied to those who retire at 63 is expected to be linked to years of service or the type of profession, with heavy and manual labour cited as examples.
Social Insurance Fund investment policy
Discussions on the fund’s investment policy are ongoing with the Finance Ministry. Moushouttas recently set out the parameters for any investment activity. “Any investment actions must be taken very carefully, to ensure the independence of the body to be established for this purpose, its meticulous supervision, and that investments are not high-risk,” he said.
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