Nicosia, Cyprus. The government held talks on Monday with stakeholders on the second pillar of pension reform, which it aims to roll out by next year. Labour Minister Marinos Moushiouttas chaired the meeting of the Labour Advisory Board.
Labour Advisory Board meeting
Moushiouttas chaired a meeting of the Labour Advisory Board, the top advisory body on labour relations and social policy, comprising representatives of the government, employers and trade unions. Discussions on the planned pension reform began in earnest in early January.
Outline presented to stakeholders
Moushiouttas told journalists that the government had “opened up a small window regarding the second pillar” and presented stakeholders with an outline of its approach to pension reform. He said the discussion was initial and general, without going into detail, and described the planned reform as an “emblematic policy” of the current administration.
Timeline and key goals
Reform of the pension system is being planned for early 2027, with the government expected to table the relevant bills to parliament this June. The goals include raising pension amounts for those on the low end, reducing and gradually scrapping the 12 per cent penalty for those retiring before 65, and potentially cutting back on pensions for high earners in the private sector.
Early retirement penalty
The 12 per cent penalty is a permanent reduction applied to social insurance pensions for individuals who opt for early retirement at 63 instead of the statutory age of 65. Introduced in 2012, it serves as an actuarial offset for receiving pension payments for two additional years.
How will the proposed changes to early retirement rules affect your retirement plans?
