Cyprus government unveils major pension reform plan

On August 19, 2026, the Cypriot Minister of Labour and Social Insurance, Marinos Mousiouttas, presented a comprehensive pension reform proposal to the Labour Advisory Board. This reform, described by President Nikos Christodoulides as the most significant update to the system since 1980, aims to improve pension adequacy, fairness, and the sustainability of the Social Insurance Fund.

The proposal affects 123,000 current pensioners, all of whom are expected to see positive changes. Specifically, 50,000 individuals will receive a monthly increase of over €100, while 60,000 will see smaller increases over a five-year period. The plan also introduces a relief measure for the 12% actuarial penalty applied to those retiring at age 63. Central Actuary Kostas Stavrakis noted that the system rationalization will lead to a temporary fiscal burden of approximately €50 million annually in the initial years.

The government intends to submit the bill to Parliament by September 20, 2026, aiming for implementation by January 1, 2027, with the first adjusted payments scheduled for February 1, 2027. Further discussions with social partners are set for August 28 to address any remaining concerns or suggestions while maintaining the core philosophy of the reform.