Cyprus government confirms no pension cuts in upcoming reform

The Cyprus government has officially ruled out any reductions in pensions as part of its upcoming pension reform. Minister of Labour Marinos Mousiouttas confirmed that while an actuary had previously proposed a 5% reduction on the supplementary portion of the highest pensions to fund increases for lower-income groups, the government rejected the idea following widespread opposition from social partners. The reform aims to provide pension increases ranging from 2% to 60% over the next five years, with the stated goal of implementing these changes by January 1, 2027, so that pensioners receive their first increases in February 2027.

The legislative roadmap includes a presentation of the bill to the Labour Advisory Body on August 19, followed by further discussions with social partners on August 28. The government intends to submit the finalized bill to the House of Representatives by September 20, 2026. Trade unions and political parties, including AKEL, have expressed strong opposition to any benefit cuts and are now seeking detailed answers on how the increases will be financed, alongside addressing critical issues such as the 12% actuarial penalty for early retirement and widows' pension rights. The Ministry maintains that the system’s sustainability will be managed through structural improvements rather than benefit reductions.