Cyprus government proceeds with pension reform plans

The Cyprus government is advancing a pension reform initiative aimed at strengthening the Social Insurance Fund (SIF) while improving benefits for low-income retirees. During a meeting of the Labour Advisory Board on September 7, 2026, Finance Minister Makis Keravnos and Labour Minister Marinos Mousiouttas discussed the financial aspects of the proposed legislation, which is scheduled for implementation on January 1, 2027. The government aims to protect fiscal balance and ensure the system's long-term sustainability through the inclusion of potential 'safety valves' in case of future economic crises.

Controversy has emerged regarding the inclusion of a provision for an actuarial review five years after implementation, which stakeholders fear could lead to future contribution hikes or an increased retirement age. While the government maintains that the retirement age and contribution levels were previously intended to remain unchanged, employer organizations and trade unions have expressed significant concerns. Opposition parties, including DISY, have also criticized the government's approach, emphasizing that any reform must be equitable and not place undue burdens on current workers or businesses. The proposal is currently moving toward parliamentary review, with further data requested by social partners to clarify the economic impact of the changes.