A quiet ‘haircut’ on the pensions of the highest-paid private-sector workers is envisaged by the government’s plan to reform the first pension pillar. The reduction ranges from 2% to 5%, amounting to €29–€133 per month.
According to a study by the International Labour Organization (ILO), presented to an ad-hoc technical committee, the cut stems from lowering the supplementary pension coefficient from 1.5% to 1.25%. In practice, a worker earning €4,000–€5,000 will see their pension fall by about 2% with 34 years of contributions, while those with higher incomes face a 5% reduction.
A critical change is the state’s withdrawal from funding the supplementary component — the burden will now fall solely on employers and employees. Contributions are being restructured: workers and employers will each pay 7.91% toward the basic pension, with the state’s share rising to 4.68%. For the supplementary part, however, the state contribution drops to zero.
Notably, public-sector retirees will not be affected, as the changes concern only payments from the Social Insurance Fund. According to the Statistical Service, workers earning over €4,000 monthly account for 12.3% of the workforce — approximately 61,425 people.
Labour Minister Marinos Mousiouttas left the door open for adjustments: after Labour Advisory Council sessions and input from social partners, some parameters may change ‘either upwards or downwards’. The aim remains to table the bills in June, with implementation from 2027.
Social partners are pushing back, demanding simultaneous advancement of the second pension pillar, given that 70% of workers do not participate in any provident fund.
