Pension reductions from 5-20% are on the table as cost-cutting options being examined by the Labor Minister, reports Greek daily newspaper Eleftheros Typos. The government is seeking cuts to the funds received by 2.6 million pensioners after restrictions imposed by Greece’s lenders (EC, ECB, IMF, ESM) so that a pension rate of 1,450 euros would be lowered to a level under 800 euros.

The sudden change dampens the government’s initial aspirations for restrictions to slashes. Creditors want to cut pensions to 55% of wages whereas the proposals of the government placed pensions at 60% of wage levels.

Greek Labor Minister George Katrougalos is meeting with representatives of creditors to discuss the social security system, as well as pensions, on Thursday afternoon. Basic guidelines on which pensions will move in new legislation need to be completed by the end of the month.

New reductions will be imposed from January 2016 with the basic guaranteed pension rate of 384 euros for old and new pensioners. Cuts will be applied to higher pensions according to the age of retirement and years of employment. Hence, according to the new system, benefits worth 1,200 euros received by a pensioner who retired after 35 working years will be comprised of 384 euros for the national pension rate and 816 euros for pension based on pension contributions.

The re-calculation of the pension will include new coefficients based on the pensioners year of insurance and contributions.