Cyprus targets January 2027 for pension reform rollout

Nicosia, Cyprus. Pension reforms targeted to take effect on January 1, 2027, should include safety valves to withstand crises, Finance Minister Makis Keravnos said on Monday after a meeting of the labour advisory body.

Employers’ organisations and trade unions disagreed on the retirement age during the meeting, which was also attended by Labour Minister Marinos Mousiouttas.

Fiscal sustainability

Keravnos did not provide details on the proposed safety valves, but said the priority was the long-term sustainability of the social insurance fund. He said the process was in its final stages and would subsequently be submitted to an expert for scrutiny.

The meeting examined the financial aspects of pension reform. It was agreed that any necessary clarifications would be provided in the coming days to allow the procedure to proceed according to a specific timetable.

Support for low pensions

Keravnos said the government’s initiative under the first pillar of the reforms focused on increasing low pensions while safeguarding the economy and fiscal balance.

He said solidarity was central to the system, with current workers contributing to the social insurance fund to finance existing pensions and secure future pension payments.

A proposal prepared by the labour ministry in cooperation with International Labour Organisation experts was examined by the finance ministry, which said it could support the proposal without disrupting fiscal balance.

Cost under discussion

Keravnos said proposals submitted by employers’ organisations and trade unions could change the overall cost of the reforms, recently estimated at €50 million annually. The proposals remain under discussion.

Mousiouttas said the reforms were the first pension reforms promoted in 46 years. He said the planning focused on the viability of the social insurance fund and public finances, as well as the state’s financial stability.

He added that the first objective was to improve the quality of life and ensure dignified living conditions for low-income pensioners. Discussions were proceeding on schedule, with implementation still targeted for January 1, 2027.