Minister presses ahead with pension bill regardless of Provident Funds

Economy pensionerspensionsTop News Minister presses ahead with pension bill regardless of Provident Funds Sintaxeis New Id 1496755 Relevant News King Harald V, Norway’s reform-minded head of state, dies at 89 28 August 2026 Minister presses ahead with pension bill regardless of Provident Funds 28 August 2026 Drousiotis questioned again over “Mafia State” investigation 28 August 2026 Angelos Angelodimou 28 August 2026 FacebookXWhatsAppEmailPrintViber Labour Minister Marinos Moushouttas will press ahead with tabling the first-pillar pension reform bill in parliament, he told CNA. He will proceed even without full agreement with social partners, and regardless of progress on the second pillar covering Provident Funds. Moushouttas set out a possible scenario for phasing in pension increases over five years. “We conclude that the increase will be 30 per cent in the first year, 30 per cent in the second year, 10 per cent in the third, 10 per cent in the fourth and 20 per cent in the fifth,” he said. He noted that under this model, pensioners would receive a combined 60 per cent of the increase within the first two years. He said it would be ideal if the full increase could be paid from the first year, but this must be weighed against the sustainability of the Social Insurance Fund and the impact on economic indicators. Moushouttas said the low-income pensioner allowance will remain factored into pension calculations, adding that after the reform, the combined pension and allowance will be higher than today’s combined total. He said around 50,000 pensioners are expected to see increases of more than €100 a month, while roughly 7,000 to 8,000 low-income pensioners will see increases exceeding €200. The largest percentage increases will mainly go to lower earners, he explained, citing the case of a pensioner who worked for 47 years on low pay and currently receives a pension of €504, which will rise by €250 to €754 under the reform. The allowance will continue to be paid to those who still meet the relevant criteria, Moushouttas said, though the amount may fall as pensions rise, since the need for additional support decreases. As an example, he cited a pensioner currently receiving a €504 pension plus €220-230 from the allowance, for a total monthly income of €720-730. Under the reform, the pension would rise to €754 while the allowance falls to around €80-90, but the combined total would still rise, to €820-830 a month. He said no pensioner would end up with a lower total income than they receive today, even where a pension increase leads to a reduced allowance. Moushouttas said the current bill will not cover the second pillar, covering Provident Funds. The relevant Technical Committee will begin regular sessions on the second pillar from September 1, with discussions continuing throughout September and aiming, if possible, for a full conclusion by mid-October. He explained that completing the Provident Funds discussion is not a precondition for tabling the bill in parliament, and that tabling it in September is necessary to keep the reform on track for implementation from January 1, 2027. On whether participation in Provident Funds should become mandatory, Moushouttas noted the question remains under consultation. Employer organisations favour keeping the current voluntary system, while trade unions argue participation should be made mandatory so all employees benefit, and the government is seeking a middle ground between the two positions. Moushouttas added that the government is aiming to launch a new investment fund for Social Insurance from January 1, 2028, into which instalments repaying the state’s €12 billion debt to the Social Insurance Fund would gradually be directed, along with future surpluses. The Finance Ministry plans to commission a specialised international firm to carry out a study guiding the government on the new fund’s structure, operation and investment policy, and Moushouttas said there is a possibility it could follow a model similar to the Hydrocarbons Fund, which has already been approved by parliament. Subscribe to our Newsletter Latest News King Harald V, Norway’s reform-minded head of state, dies at 89 Drousiotis questioned again over “Mafia State” investigation The benefit to pensioners must come first Confidence-building measures, or normalising the occupation? 75-year-old woman’s car catches fire in Peristerona Lake formed by landslide on Nepal-Tibet border overflows, halting rescue work Nepal declines foreign rescue help, South Korea says it is ‘negotiating’ Follow en.philenews on Google News and be the first to know all the news about Cyprus and the world.