The Greek Ministry of Labor is focusing on a package of six key interventions in the country’s pension system, ahead of new announcements expected from the Prime Minister at the Thessaloniki International Fair (TIF). The central goal is to significantly boost the income of 2.7 million pensioners.
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Among the key measures under consideration are a new method for calculating pensionable earnings, new pension increases for 2027, a reduction of the solidarity contribution, and the abolition of the personal difference mechanism.
Pension reform: The interventions being considered by the Ministry of Labor
The changes being planned by the ministry include the following:
- New method for calculating pensionable earnings. This is one of the most significant changes to the model used to adjust pensionable earnings, which form the basis for calculating the contributory pension. Under the current system, insured individuals’ earnings are adjusted based on inflation. This model will be replaced by an index tied to wage growth. The goal is to align the adjustment of pensionable earnings with wage trends in the broader economy. Since wages typically rise faster than prices under normal economic conditions, this change could lead to higher pensions for future retirees.
- New pension increases. A new increase to the national pension is expected to take effect on January 1, 2027, with current estimates pointing to an adjustment ranging from 2.9% to 3.3% (gross). The exact percentage will be determined, as stipulated by current legislation, by averaging the annual GDP growth rate and inflation, then dividing the result by two. The final increase will be paid out in December 2026 (with the January 2027 pension payment). The adjustment to the national pension does not only affect new and existing retirees who receive it — it also has a knock-on effect on a range of other pension benefits, as these are calculated based on its level. These include: the basic pension for former OGA insured individuals, survivor (widower/widow) pensions, disability pensions, the uninsured elderly benefit, pensions for expatriate Greeks, and other benefits linked to the national pension amount.
- Changes to the solidarity contribution (EAS). A reduction of this contribution — currently levied on approximately 440,000 pensioners with main pensions above €1,468 — is under consideration. The proposal being studied would apply the contribution only to the portion of the pension exceeding the threshold set during each annual pension adjustment, rather than to the pension as a whole. Meanwhile, a pilot hearing at the Court of Audit is scheduled for October 7, 2026, concerning a private applicant’s case regarding the change in how the EAS is calculated. According to sources, the commissioner’s recommendation is favorable toward a proportional, tiered calculation of the EAS rather than applying it to the full pension amount — a change that, if accepted, would result in a 50% reduction in the EAS.
- Personal difference mechanism. The full abolition of the personal difference — the mechanism that has effectively capped pension increases for more than 671,586 long-standing retirees — is planned. This intervention will change the landscape from January 1, 2027, as pensioners will no longer see increases only on paper but will receive higher amounts directly in their bank accounts. The change primarily affects older retirees — those who had already retired before the implementation of the Katrougalos Law and who continue to show a positive personal difference following recalculations of their pensions. The average monthly increase is estimated at approximately €44, or €528 on an annual basis, with the benefit varying depending on the pension fund and the pension amount. It should be noted that the personal difference will continue to appear on pension statements, remaining “frozen” at its current level, but will no longer offset any portion of future increases. Social security officials clarify that the personal difference amount will not be absorbed into the pension itself. In practice, the 671,586 pensioners who still have a personal difference will see real pension increases for the first time in years.
- Abolition of the EAS on supplementary pensions. This refers to a 6% deduction applied to supplementary pensions of €300 or more. Eliminating this charge would increase the monthly income of approximately 400,000 pensioners.
- Notional years for supplementary pension eligibility. The proposed measure provides for the recognition of notional insurance years in order to reach the required 15-year threshold. Potentially, this could affect up to 25,000 insured individuals. The basic prerequisite will be the completion of 3,600 days of actual supplementary insurance, while the buy-in cost for the remaining years will be set at 6% of earnings, with the minimum wage serving as the base. With recognition of up to 900 days — equivalent to three years — insured individuals who have previously fallen short of the required threshold will be able to establish entitlement to a supplementary pension.
Published in Parapolitika
