Cyprus government advances pension reform plans for 2027 implementation

The Cyprus government, led by Minister of Labour and Social Insurance Marinos Mousiouttas, is actively negotiating a major pension reform with social partners, aiming for implementation by January 1, 2027. The proposal, currently under intense discussion in the Labour Advisory Body, intends to increase pensions for approximately 123,000 retirees. Specifically, over 50,000 individuals are expected to receive increases exceeding €100 per month within five years, while more than 8,000 pensioners could see hikes surpassing €200. The government plans to submit the formal bill to the House of Representatives by September 30, 2026.

Discussions have recently focused on the fiscal impact of the reform. Minister Mousiouttas confirmed that the annual cost for the state will be significantly higher than initial estimates of €50 million, with some reports suggesting costs could exceed €485 million over the next six years. Key points of contention, which remain under negotiation, include the potential adjustment of the retirement age and the controversial 12% penalty on early retirement. The government has expressed readiness for daily consultations with unions and employer organizations to address remaining technical differences and finalize the legislation before the upcoming parliamentary deadline.