Cyprus government advances pension reform amid union scrutiny

The Cypriot government is preparing to introduce a pension reform bill to the House of Representatives by September 24, 2026. Minister of Labor Marinos Moursiouttas announced that the prevailing proposal includes a gradual increase in pensions, with 60% of the total rise to be distributed within the first two years—30% in the first year, 30% in the second, followed by 10%, 10%, and 20% in subsequent years. The goal is to gradually phase out the 'small check' supplement as pension payments increase, potentially raising a 500-euro pension to approximately 834 euros plus Cost of Living Allowance over five years.

Public sector unions and labor organizations, including the ISOTITA union, have raised significant objections to the bill, particularly regarding the 12% actuarial penalty for mandatory early retirement affecting police, teachers, and military personnel. Unions are also challenging changes to the supplementary pension coefficient, which could see reductions of 16.7%, and stricter criteria for 63-year-old retirement, requiring nearly 38 years of insurance contributions. While the government maintains a positive dialogue with groups like the Third Age Observatory, formal negotiations are expected to intensify in mid-to-late September as unions finalize their positions ahead of the bill's parliamentary submission.