Employers seek clarifications on Cyprus pension reform’s €50m annual cost

Nicosia, Cyprus. Employers’ organisations said the government’s planned pension reform appears to be a serious effort within the country’s financial capabilities, while seeking further details on its funding and provisions.

Employers assess proposed cost

The government’s planned pension reform is expected to cost taxpayers an additional €50 million per year during the first five years after implementation.

Employers’ and Industrialists’ Federation (Oev) director-general Michalis Antoniou said on Thursday that the initial impression was that the proposal was a serious effort within the framework of the state’s financial capabilities.

He said a comprehensive approach was being taken but that the details required careful examination.

Antoniou described Wednesday’s meeting, when the government presented its plans to employers’ organisations and trade unions, as the most productive discussion since the effort began. He said the issues had become concrete, with figures, scenarios and understandable examples.

He said the €50 million annual cost would be examined with the assistance of Oev’s advisers. The expenditure appeared manageable at first glance, he added, provided it was combined with the rationalisation of distortions.

However, Antoniou said further clarifications were needed from the labour ministry regarding its proposals.

Funding questions remain

Cyprus Chamber of Commerce and Industry (Keve) secretary-general Philokypros Rousounides said initial views were exchanged during Wednesday’s discussion, but several questions and concerns had emerged.

He said further clarifications would be needed in the coming days.

Rousounides said all parties shared the aim of finding common ground to make the reform as effective as possible, protect its macroeconomic impact on the local economy and ensure the sustainability of the social insurance fund.

Asked whether the financing of the reform had been clarified, he said it had not. He said technocrats were expected to clarify where the additional cost could arise.

Early retirement proposal

Trade union Peo leader Sotiroula Charalambous said the government’s current proposal would gradually increase the number of years of social insurance contributions required for early retirement at age 63 from 33 to 38.