Pension reform talks to continue as government outlines proposed changes

Nicosia, Cyprus. Discussions on pension reform will continue on Monday at the Labour Advisory Board, attended by Labour Minister Marinos Mousiouttas and Finance Minister Makis Keravnos. The meeting is scheduled to begin at 9.30am at the labour ministry.

Government priorities

Mousiouttas has described pension reform as the government’s most important reform this year. He said legislation concerning the first pillar of the system, the Social Insurance Fund, would be submitted to parliament during September.

He said the reform aims to ensure pension adequacy and introduce meaningful improvements to pension payments.

Proposed pension changes

According to Mousiouttas, the reform would increase all pensions, with greater support directed towards those most in need, particularly low-income pensioners.

He said the changes are intended to ensure that the system’s benefits and burdens are distributed fairly while safeguarding its long-term sustainability for future generations.

Mousiouttas said around 40,000 of Cyprus’ 120,000 pensioners are currently subject to some form of reduction, while a further 40,000 are expected to be affected over the next five years, partly due to demographic trends and an ageing population.

Under the government’s proposal, the 12 per cent reduction would be lowered by 4.5 percentage points to 7.5 per cent on the basic pension, but not on the supplementary pension.

Expected impact

Government spokesman Konstantinos Letymbiotis said the reform would provide greater support for low-income pensioners while ensuring the sustainability of the Social Insurance Fund for future generations.

He said more than four in ten pensioners, or 51,664 people, are expected to receive increases of more than €100 per month once the reform is implemented.

Disy president Annita Demetriou said the government’s pension reform must deliver sustainable and adequate pensions without increasing contributions or the retirement age.