Cyprus prepares for labor advisory meetings regarding pension reform

The future of pension reform in Cyprus will be discussed during two consecutive meetings of the Labor Advisory Board scheduled for August 19 and 28, 2026. Minister of Labor Marinos Mousiouttas is expected to present a draft bill during the first session focused on the first pension pillar, which includes the investment policy of the Social Insurance Fund, increases for low pensions, and the potential adjustment of the 12% actuarial penalty for those retiring at age 63 instead of 65.

Trade unions including SEK, PEO, and DEOK advocate for a comprehensive reform that includes the second pension pillar, specifically the mandatory implementation of provident funds to ensure adequate retirement income, noting that 35% of retirees are currently near the poverty line. Conversely, employer organizations like OEB and KEBE have expressed reservations regarding the legislative enforcement of these funds in the private sector.

The current phase aims to reach a consensus among social partners before the legislation is submitted to the House of Representatives. While the government focus remains on the first pillar, the inclusion of broader professional schemes remains a point of contention that will dominate the upcoming deliberations.