Government considers contentious pension reform bill in Cyprus

As the deadline for presenting a pension reform bill to social partners approaches, the Cypriot government is reportedly considering a controversial proposal to reduce the pensions of high-income earners. The plan, which has previously faced rejection from both the President of the Republic and the Minister of Labour, would involve a percentage reduction in the proportional component of pensions for future high-income retirees, primarily in the private sector. This measure is intended to generate funds to support an increase in low pensions.

The proposal has sparked significant concern among social partners, who have expressed clear opposition to the inclusion of such a provision in the final bill. While the government had previously signaled that this specific actuarial recommendation would be off the table, reports indicate that it is still being actively discussed within government corridors. Public sector employees would remain unaffected by the change, as they do not contribute to the proportional component of the Social Insurance Fund. Discussions remain at a critical stage as the government prepares to share the final version of the reform legislation within the coming days.