Cyprus government confirms pension reforms will feature increases without cuts

The government of Cyprus, led by Labor Minister Marinos Mousiouttas, has officially dismissed reports suggesting that the upcoming pension reform would include cuts to high-level pensions. While acknowledging that an early draft proposal had briefly considered a 5 percent reduction for a small segment of high earners to help fund broader increases, Minister Mousiouttas confirmed that this option was rejected following opposition from social partners. Instead, the final reform aims to provide pension increases for all beneficiaries, ranging from 2 percent to 60 percent over the next five years, with larger adjustments prioritized for low-income pensioners.

The legislative timeline remains a key point of discussion as stakeholders prepare for the upcoming meetings. The Labor Advisory Board is scheduled to review the draft bill on August 19, followed by a subsequent meeting on August 28 to receive input from social partners. Although some union representatives, including Andreas Matsas of SEK, have expressed concerns that the timeline for a planned submission to Parliament by September 20 is ambitious, the government expects the new system to be enacted by the end of the year. The proposed changes are intended to take effect on January 1, 2027, with the first adjusted payments anticipated by February 1, 2027.