Cyprus advances comprehensive pension system reform

The Cypriot government is moving forward with a major overhaul of the pension system, the first since 1980, aiming for implementation on January 1, 2027. Labour Minister Marinos Mousiouttas recently presented the framework to stakeholders, confirming that all pensioners will see increases, with low-income recipients benefiting most. Over 51,000 of the island's 123,212 social insurance pensioners are expected to receive monthly increases exceeding €100, phased in over five years. The government is currently considering a model that would deliver 60% of these total increases within the first two years.

Discussions are ongoing between the Ministry, labor unions, and employer organizations. A key point of contention is the 12% actuarial penalty for those forced into early retirement, particularly for police, firefighters, military personnel, and teachers, who are advocating for its total abolition. Additionally, unions like ISOTHTA have rejected specific provisions, such as the reduction of the supplementary pension coefficient. The Labour Advisory Board is holding intensive sessions to refine the bill, with the Minister aiming to submit the legislative package to Parliament by September 24, 2026. Further technical committee meetings are scheduled to address the second pillar of the reform throughout September.