Nicosia, Cyprus. Labour and Social Insurance Minister Marinos Mousiouttas said pension increases from the planned reform of the social insurance system are expected to be noticeable, particularly for low-income pensioners. He said the first phase of the reform could be implemented from January 1, 2027.
First phase and expected pension increases
In an interview with Phileleftheros, Mousiouttas said the first phase of the reform, concerning the social insurance fund, could start on January 1, 2027. He said this would allow pensions to rise “to the extent that will be indicated by the final studies” and would also address existing distortions in the system.
Asked whether pension increases would be substantial, he said it is certain the rise will be felt by citizens.
Studies and decisions on fund governance and debt
Mousiouttas said the final studies would pave the way for decisions on the fund’s governance model, its investment policy and the gradual repayment of the state’s debt to the fund.
Second pillar reforms linked to supervisory upgrades
Referring to the second pillar of the pension system concerning provident funds, Mousiouttas said it cannot move forward immediately. He said implementation will require at least two to four years, as the supervisory authority must first be upgraded and made independent, in line with requirements set by the relevant European authority.
Borrowing and investment policy to be discussed with finance minister
On borrowing from the social insurance fund and its future investment policy, Mousiouttas said the issues will be determined in consultation with the finance minister, with whom he is due to meet in the coming days.
He said that, with the implementation of a new investment policy, it will become clear how funds will be invested. He added that investments may continue to include placements in government bonds, as is currently the case, which are considered among the safest options with lower risk, though potentially lower returns.
What changes to the pension system will you be watching most closely as the reform plans develop?
