Labour minister speaks on pension reform

Labour minister Yiannis Panayiotou has made the government’s position on early retirement adjustments clear following a meeting with the social insurance council on Friday.

He said the position of the government is “targeted palliative intervention, which corrects some existing distortions, always according to the possibilities of the social insurance fund”.

His comments come after the announcement of plans for a 12 per cent early retirement adjustment last week.

On Friday he said the actuarial study into the matter is expected in September, and that the social partners are ready for discussion on the matter.

He said the social insurance services presented the historical evolution of the institutional framework for the retirement limit and the applied regulations during the meeting.

In addition, he said his ministry’s actuarial services presented a technical analysis of the adjustment, taking into account data from the last decade.

He said that options for potential next steps were discussed at the meeting, and that an updated study, including data from the last census, would be complete and ready by September.

He added that the forthcoming analysis will also consider the available funds within the social insurance fund.

Regarding the targeting of the proposed adjustment, he said that the time and duration of retirees’ contributions to the social insurance fund would be considered as a “central parameter”, whether people take standard retirement at 65 or early retirement at 63 years old.

He added that he found it “interesting” that a significant number of workers, even with the existing retirement adjustment, elect to take early retirement at 63.

He said the government’s plans in this regard will be determined by funds available to it in the social insurance fund and in public finances in general, citing the need to ensure fiscal discipline and the sustainability of the social insurance fund itself.

“The indications we have according to the actuarial support we are receiving are that there are some specific and defined margins, and we intend to move within them”, he said.