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Pension Reform: New Options Coming for the 12% 'Penalty'

Published March 16, 2026, 14:13
Pension Reform: New Options Coming for the 12% 'Penalty'

Consultations continue at the Labour Advisory Board on pension reform, with the Minister of Labour and Social Insurance, Marinos Mousiouttas, stating that alternative options will be presented in the next sessions regarding the 12% actuarial reduction. The goal is to submit the relevant bill to Parliament in June 2026, so that it can be implemented in 2027. The Minister described the pension reform as an "iconic change" that "society needed", noting that the goal is to increase low pensions, improve benefits and reduce inequalities between genders. The discussion focuses on the 12% actuarial reduction, the investment policy of the Fund, the repayment of the state's debt to social insurance and the overall pension reform. The timeline provides for the submission of the bill to Parliament in June, with discussion in the new Parliament in September - December 2026, to be implemented in 2027. The Minister stated that a new proposal will be submitted for the 12% "penalty" after the withdrawal of the previous proposal for a reduction for part of high pensioners. The new proposal will result from a study by the actuary. The Minister assured that there is no backtracking, emphasizing that the actuary made various proposals and a new direction will be chosen. The discussion on the reform of the pension system will continue in the next sessions, with reference also to the second pillar and the investment policy, depending on the responses from the Ministry of Finance. The Government seeks to convince social partners of the importance of the second pillar, despite the difficulties in implementing it simultaneously.