Full basic pension exempted from actuarial reduction

The Minister of Labor, Yiannis Panayiotou, presented a proposal at the Social Insurance Council meeting, exempting the full basic pension from a 12% actuarial reduction for employees with 40 years of contributions. This proposal aims to relieve actuarial reductions for early pensions.

The minister emphasized that the proposal falls within the Social Insurance Fund's capabilities, ensuring sustainability and avoiding increased contributions. It primarily targets pensioners subject to actuarial reductions, about 25% of total pensioners, who meet specific criteria, including 85% insurance period completion (equivalent to 40 years).

The full basic pension, expected to be nearly €500 at the start of the new year, would be excluded from the actuarial reduction, similar to tax-free income thresholds. Additional criteria and details will be discussed with social partners through a social dialogue.

This proposal primarily benefits thousands of citizens, particularly those in manual labor-intensive professions like construction, manufacturing, and sales. The proposal's financial cost is based on actuarial study results, with the goal of seeking a broad social consensus through dialogue with social partners.

The proposal revolves around 40 years of contributions (85% of the insurance period) and the possibility of retirement at 63 years based on 70% insurance period coverage (33 years). Social dialogue will continue in the coming weeks to reach a positive outcome.

Parliament's approval is not a strict requirement, but the government aims for a consensus. Additionally, during the meeting, the Council was informed about the CTA's actuarial study for 2020 and the investment policy of the CTA Reserve. It confirmed the CTA's viability and the sufficiency of planned contributions, without the need for retirement age diversification. Discussions were also held on the investment policy.