The government approved draft legislation on Friday to reform the pension system, introducing changes to the retirement age, contribution rates, and pathways to retirement.
The Government Council approved draft bills to reform the pension system during a meeting on Friday evening, which was convened to discuss the nation's economic, social, and financial situation.
The approved legislation outlines the implementation of measures agreed upon following negotiations with social partners. The key reforms include:
- Aligning retirement age: A gradual alignment of the actual retirement age with the legal retirement age. This will be achieved by extending the required social contribution period by eight months by 2030. An exception will be made for individuals who have paid 40 years of contributions by the age of 57, who will still be eligible to retire at that age.
- Increased contributions: The contribution rate will rise from 24% to 25.5%, while the year-end allowance will be maintained.
- Counting years of study: Increased flexibility in how years of study are counted towards pension contributions.
- Phased retirement: The introduction of a new option for a gradual transition into retirement.
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