Nicosia, Cyprus. Cyprus aims to raise the basic pension without weakening the Social Insurance Fund, the labour minister said on Tuesday. Marinos Mousiouttas said the basic pension after reform will be lower than €1,088, the national minimum wage.
Basic pension level and fund sustainability
Mousiouttas made the comments during a Q&A with journalists after a presentation on the ministry’s work and future goals, when asked to specify what the basic pension amount would be after reform of the pension system.
The permanent secretary at the labour ministry said the government would provide “the maximum possible, without causing an imbalance,” adding that the basic pension to be announced would be “according to the capabilities” of the Social Insurance Fund (SIF).
Outline of pension system reform
The government has drafted an outline for a reformed pension system and is holding talks with stakeholders, including unions and employers organisations, on the details.
The reform includes two pillars: one focused on state pensions and a second covering provident funds, as well as the cash reserves of the SIF and its investment policy.
Current pension system structure
Cyprus’s statutory pension system currently has two main components: a fixed (basic) pension and a proportional (supplementary) pension, calculated based on contributions.
The basic pension is intended to provide a minimum income based on the average weekly basic insurable earnings, which are revalued annually. It is generally set at 60 per cent of the weekly average of basic insurable earnings, with a 10 per cent increase for each dependent.
What changes to the basic pension and the Social Insurance Fund would you like clarified as talks with stakeholders continue?