Cyprus government proceeds with pension system reforms

The Cypriot government is advancing a new pension reform proposal aimed at addressing long-term sustainability and support for low-income pensioners. Minister Moussiouttas stated that the government plan envisions a gradual increase in pensions for low-income earners, noting that as basic pensions rise, the necessity for supplementary social benefits will decrease. Projections suggest that within five years, some pensions could rise to approximately 834 euros, with additional cost-of-living adjustments included. However, unions and employer organizations remain cautious, citing concerns over the rising cost of living.

Public sector unions, meeting at the PASYDY offices, have formally identified six key areas for negotiation. The most prominent demand is the total abolition of the 12% actuarial penalty for employees forced to retire before age 63 by law, including police, military personnel, firefighters, and teachers. Other discussion points include calculation coefficients for supplementary pensions, Social Insurance Fund sustainability, and contribution requirements for those working past age 65.

While a meeting of the Labour Advisory Board is scheduled for Friday, stakeholders indicate that comprehensive discussions will likely be delayed until mid-to-late September. With the government aiming to submit the bill to Parliament by September 24, the timeline for finalizing these negotiations remains tight.