Cyprus pension reform will raise payments without increasing retirement age, minister says

Nicosia, Cyprus. Planned pension reforms will increase payments while keeping the pension fund viable for “40 or 50 years”, Labour Minister Marinos Mousiouttas told members of Akel on Wednesday. He said neither the statutory retirement age nor workers’ social insurance contributions will rise.

Pension increases

Mousiouttas said all pensioners will receive an increase, with priority given to those on low incomes. The amount will vary according to factors including years of contributions and the amount contributed.

More than 50,000 people will receive an increase of more than €100 a month, he said, while almost 10,000 will receive more than €200 a month. Under another part of the plan, anyone whose pension is currently €600 a month or less will receive an increase of at least €30 a month.

The reform is due to take effect on January 1. Mousiouttas said the changes would be reflected in pensioners’ bank accounts by the end of that month.

Contribution periods and early retirement

Mousiouttas said periods outside paid employment, including time spent raising children, caring for others, living with a disability or before entering the labour market, will for the first time count towards a pension. He said the change would begin to narrow the gender gap in pensions.

The reform will cost €800 million over its first six years of implementation. Mousiouttas also said the government plans to reduce the downward adjustment applied to pensions taken through early retirement from 12 per cent to 7.5 per cent, describing the current rate as a “source of bitterness”.