Government to send pension reform bill to social partners

Nicosia, Cyprus. The government’s pension reform bill will be sent to trade unions and employers’ organisations in the coming days, following a meeting on Friday between President Nikos Christodoulides, Labour Minister Marinos Mousiouttas and Finance Minister Makis Keravnos.

The draft legislation will be discussed by the labour advisory body before being submitted to parliament, with the government aiming for initial measures to take effect on January 1 next year.

Consultation process

The meeting reviewed aspects of the proposed reforms before the government decided to forward the bill to the social partners for discussion through the labour advisory body.

Two meetings have been scheduled for August 19 and August 28, when employers and trade unions are expected to examine the government’s proposals.

Pension system changes

The legislation is intended to reform the first pillar of Cyprus’ pension system, which covers the social insurance fund.

Mousiouttas has previously said pensioners should begin receiving higher payments from February. He said the reforms would not include an increase in the statutory retirement age or social insurance contributions.

He described the proposals as “the maximum possible utilisation of the fund’s resources”, adding that any additional expenditure would need to be balanced by savings elsewhere in the system.

Employers and unions

Employers and trade unions have welcomed the consultation process but said key issues remain unresolved until they examine the final text.

Keve has questioned the long-term sustainability of increasing benefits without changing contribution rates or the retirement age.

Trade unions have said reforms to the first pillar should be considered alongside changes to the second pillar, including outstanding issues concerning early retirement reductions, widowers’ pensions and eligibility for support.