Dorita Yiannakou
The picture surrounding pension reform continues to shift as the government and social partners discuss new scenarios and raise fresh concerns—all before the actuarial studies needed to confirm the Social Insurance Fund’s long-term stability have been completed.
The closer the government comes to submitting the bill, which is expected around the end of September, the more intense the debate is likely to become.
Workers in the early and middle stages of their contribution history—those aged between 20 and 35—would be affected most because they would pay higher contributions for most of their working lives.
Employer organizations have raised the possibility of increasing contributions to the Social Insurance Fund as part of efforts to secure its long-term viability.
Finance Minister Makis Keravnos has also entered the discussion, calling for safeguards to prevent public finances from being thrown off course.
Trade unions, meanwhile, are expected to push more forcefully for mandatory provident funds. The issue is likely to become one of the main bargaining points before a final agreement is reached, with the government’s position expected to play a decisive role.
How much would it cost?
To understand the possible financial burden, consider an employee earning a gross salary of €2,000 per month and assume that the employee’s contribution rises by 0.5%.
The annual cost would be the same regardless of age, provided the salary and contribution rate remained unchanged. The difference would lie in how many years the employee had to pay the higher rate.
In this example, the additional contribution would be €10 per month, or €120 per year.
A 20-year-old employee with 45 years remaining until the age of 65 would pay an additional €5,400 by retirement.
For a 30-year-old with 35 years remaining, the total extra cost would be €4,200.
A 40-year-old would pay an additional €3,000 over 25 years, while a 45-year-old would pay €2,400 over 20 years. A 50-year-old would face an extra cost of €1,800 over 15 years.
For a 60-year-old employee five years away from turning 65, the total additional cost would be limited to €600 under the same assumptions.
There is already a ceiling on insurable earnings, which stands at €5,742 per month for 2026.
If the employee contribution were increased by 1% instead, the extra cost for someone earning €2,000 would double to €20 per month, or €240 per year.
Who would feel it most?
Workers aged between 20 and 35, who are in the early and middle stages of their contribution history, would be affected most by a potential increase. They would pay the higher contributions for the majority of their working lives.
Employees currently aged between 35 and 50 would also be affected significantly because they still have many working years ahead of them.
For those aged between 50 and 60, the impact would last for a shorter period because they have fewer years remaining before retirement.
Those already approaching retirement would have the shortest exposure to any new contribution.
It should be made clear that the 0.5% example does not necessarily represent the final rate employees would be asked to pay from 2027.
Based on what has been said so far, any additional increase would be activated only after five years and after the Social Insurance Fund’s performance had been assessed.
What Moushiouttas said
Labour Minister Marinos Moushiouttas was categorical in a recent interview with *Kathimerini* that the reform itself would not increase contributions.
“No, contributions are not being increased through this reform,” he said. “No new increase is being introduced. There is an overall increase of 1%—0.5% for the employee and 0.5% for the employer—but this is already provided for under existing legislation. It does not result from the reform and will take effect on January 1, 2029.”
Those comments, however, came before the finance minister entered the debate and appeared to add another dimension to what is contained in the government bill, placing the protection of public finances and the Social Insurance Fund among his priorities.
At the same time, trade unions are raising their demands for specific groups of workers who were excluded from the reform.
So far, however, they have not provided a clear answer to the crucial question of where the money needed to bring those groups into the new pension framework would come from.
What employers and unions say
Employer organizations believe that raising the retirement age should remain available as a possible tool under the pension reform, alongside an increase in Social Insurance Fund contributions.
They argue that if additional measures are eventually needed to protect the Fund’s long-term viability, policymakers should have the option of adjusting more than one element instead of placing the entire burden on higher contributions.
They also stress that any decisions should avoid creating additional pressure on public finances.
In other words, one scenario now being seriously considered would allow the reform to be approved immediately while postponing any contribution increase for five years. The Fund’s performance would then be assessed before the higher rate was activated.
Trade unions, however, categorically reject any scenario that raises costs for employees or reduces their rights.
They have made clear that they will not accept either an increase in the retirement age or additional contributions that would reduce workers’ monthly take-home pay.
