Government presents pension reform draft to social partners

On August 19, 2026, the Cypriot government officially presented its long-awaited pension reform draft to the Labor Advisory Board. This presentation marks the beginning of a formal negotiation process between the government and social stakeholders, including employer organizations and labor unions, aimed at resolving structural issues within the national social insurance system.

The legislative proposal has faced significant delays throughout the summer, having initially been scheduled for release in June. Despite these delays, Minister of Labor Marinos Mousiouttas maintains a strict timeline: the government intends to submit the final bill to Parliament by September 20, with a target implementation date of January 1, 2027. During the initial meeting, the Ministry provided an explanatory note detailing proposed changes, while stakeholders, including trade unions SEK and PEO, have highlighted concerns regarding the adequacy of pensions, the 12% reduction penalty, and survivor benefits.

Following the initial presentation, stakeholders are currently conducting internal reviews of the complex legislation. Further discussions, where formal positions and suggestions from the social partners will be presented, are scheduled to resume on August 28. Employer representatives, such as the Chamber of Commerce and Industry (KEBE), have expressed a constructive attitude but are seeking urgent clarifications regarding the long-term fiscal cost and the overall sustainability of the Social Insurance Fund.