Nicosia, Cyprus. Labour Minister Marinos Mousiouttas said the government plans to submit bills to parliament by June to reform the pension system. He made the comments on Tuesday during a session of the House labour committee.
Planned reforms and committee discussions
Mousiouttas called on the House labour committee to “find common ground and promote either legislative proposals or bills which aim to help people”.
He said the submitted bill will include provisions on the low-income pensioners’ allowance, the social insurance fund’s investment policy, and the 12-per-cent pension “penalty” for those who take early retirement.
Social insurance fund investments and state borrowing
Mousiouttas said changes to the social insurance fund’s investment policy may include diversification, following recommendations that a larger proportion of the fund be invested in non-public assets.
He said the fund will “certainly be diversified within the framework of the pension reform so that it can bring, without risk, more benefits to the fund and to workers”.
Mousiouttas also said that between €11 billion and €12 billion borrowed from the social insurance fund is currently in the state’s accounts, and that the planned pension reforms will “cover” this.
He added that “everything will be integrated into one so that there are not multiple sources of benefit provision”.
Early retirement pension reduction
The 12-per-cent “penalty” refers to an offset under which early retirees receive a pension from the state that is 12 per cent lower than they would receive if they retired at age 65.
The reduction was partly alleviated in 2024, when the government reduced the decrease in pension payments for those who retire before age 65 if they have completed 40 years of contributions.
At the time, the government said the change would directly affect more than 11,000 pensioners, who would receive €800 per year extra, as well as between 1,000 and 1,500 new retirees per year going forward.
How do you think the planned pension reforms will affect early retirees and low-income pensioners?