The government announced on Friday it would increase pension payments for some early retirees, reducing the 12 per cent drop in pension payments for those who retire before the age of 65 if they have completed 40 years of contributions.
They say the change will directly affect over 11,000 pensioners, who will see their pensions increase by around €800 per year.
The move was announced by Labour Minister Yiannis Panayiotou following a meeting with trade union representatives and employers’ organisations.
He said after the meeting that the change will affect just shy of a third of those who were impacted by the reduction since it was introduced in 2012, as well as between 1,000 and 1,500 new retirees per year going forward.
“Government policy provides for the strengthening of people’s incomes, both wages and pensions, according to the possibilities of public finances and the pension system,” he said.
“The majority of those affected are retirees who have worked for very many years in occupations with manual duties and limited earnings, such as in the construction and building sector, in transport, and in sales and repair,” he added.
He then said the proposal is fully costed and “meets the social insurance fund’s possibilities”, with no impact on the fund’s viability and no need for working people’s contributions to increase.
The next steps, he said, are an “immediate convening” of the social insurance council and the labour advisory board, with the aim of finding a consensus to take the proposal forward.
Subsequent to that, he said, a bill will be submitted to cabinet.
However, trade union Peo’s secretary-general Sotiroula Charalambous was less enthusiastic about the proposal, saying there are “many question marks”.
She raised concerns that the stipulation that early retirees “contribute 40.4 insurance units” may mean that some on lower incomes are effectively priced out of early retirement.
“The proposal somewhat increases the number of people benefiting, but within those groups, it creates some problems,” she said, adding that the dialogue to come to the proposal was “neither open nor complete”.
She added that her union had entered discussions regarding the 12 per cent reduction as “for some workers, the nature of their jobs mean that it is not an option for them to retire at 63, but something which is imposed on them by their working conditions”.
Meanwhile, fellow trade union Sek’s secretary-general Andreas Matsas said there is a “clear political dimension” to the discussions and that the cost of this “will not be borne by the trade union movement”.
He said his union “does not accept” differentiations between the pensions offered to different workers.
“We cannot accept the creation of groups of pensioners who are entitled to something and others who are not, and the government must build on this basis,” he said.
He also stressed that two thirds of those impacted by the 12 per cent reduction “are left out of this regulation”.
The labour advisory board has already expressed its support for the idea, saying back in November that it will “positively affect the outcomes of many retirees within our current financial parameters”.
However, trade union Sek had previously rejected it, calling for the 12 per cent reduction to be scrapped across the board for all who wish to retire early.
Former Labour Minister Zeta Emlinianidou had said in 2021 Sek’s proposal was in effect “a demand to reduce the retirement age from 65 to 63 for the entire population”.
Panayiotou had last year also criticised Sek’s position, warning that delays in implementing the changes would “maintain the existing situation without any change for any pensioner,” which, he said, would not meet the current needs of the affected pensioners.
Under the current system, people can retire at 63 if they have completed 33 years of social insurance contributions and covered the relevant points but receive 12 per cent less than if they had retired at 65, the official retirement age.
