New pension law for officials still faces uncertainty
The House of Representatives on Tuesday partially accepted the President’s veto concerning the revised pension law for state officials, aiming to close a chapter of prolonged institutional and public debate.
However, since Parliament did not fully adopt all the recommendations outlined in the presidential referral, there remains a possibility that the legislation could be referred to the Supreme Constitutional Court. If that happens, it would render the law unenforceable, and the current pension system would remain in effect.
Should the President ultimately sign the law as amended, a new framework will come into force—applying only to future appointees to public office and excluding current or former officials who have already secured pension rights.
The Presidential Palace has yet to comment, pending an official opinion from the Attorney General, who will assess the revised law once it is formally submitted by Parliament within the required 15-day window.
Changes introduces and who is excluded
On Tuesday, Parliament introduced a series of amendments it believes address constitutional concerns and ensure better application of the law.
Notably, the definition of “office, role, or position in the Republic” was revised to include all posts in the public and wider public sector.
Explicit exemptions were also added for existing officeholders—including the current Attorney General, Deputy Attorney General, sitting judges, members of the Public Service Commission (EDY), and the Governor of the Central Bank. These individuals are now protected under constitutional and EU legal provisions. The exemption applies strictly to those already in office, even if they later assume a new public role. It does not apply to individuals not yet appointed.
Another change involved removing the General Accountant’s authority to determine pension distribution methods. Instead, pensions will now be calculated based on pensionable earnings and proportional service periods.
What was not accepted
Despite the changes, several key objections raised by the President were not addressed.
Among these were concerns about unequal treatment of individuals in similar roles, potential violations of property rights through significant pension cuts, interference with existing contracts, and the argument that some provisions infringe on executive powers. Additionally, objections relating to the administrative cost of enforcing the new framework were not accepted.
One debated provision that remained in the law involves the minimum payment mechanism, which limits pension disbursement to just the first €500 when an individual assumes a new office. The rest of the pension would be suspended during their term.
According to the House Finance Committee, the adopted amendments were based on the President’s concerns but only those deemed essential to address constitutional issues. The law will now proceed in its revised form, without full acceptance of the referral’s reasoning.
Background and legal challanges
The original legislation aimed to overhaul the pension system for high-level officials. Key changes included raising the retirement age from 60 to 65 for ministers, deputy ministers, MPs, mayors, and members of the EDY and the Education Service Commission (EEY), as well as suspending pensions when assuming a new post and consolidating pensions from multiple terms. However, vested pension rights would remain intact.
The President vetoed the law, citing multiple constitutional violations. These included potential breaches of:
- Article 28 (equality before the law) due to unequal treatment;
- Article 23 (protection of property) because of pension restrictions;
- Article 26 (freedom of contracts), with the law altering agreed pension terms;
- Articles 158.3 and 124.4, concerning impacts on judicial and EDY members who might assume other roles;
- Article 127, due to giving the General Accountant authority to regulate pensions via circulars, outside legal channels.
The inclusion of the Central Bank Governor without prior consultation with the European Central Bank (ECB) was also flagged as problematic, along with concerns about rising administrative costs if the law is enacted.
Source: CNA
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