Cyprus government prepares to submit pension reform bill

The Cypriot government, led by Minister of Labour and Social Insurance Marinos Mousiouttas, plans to submit a landmark pension reform bill to the House of Representatives by the end of September. The proposed legislation, which focuses on the zero and first pillars of the system, has been under intense debate with social partners and is slated for parliamentary review beginning on October 13, 2026.

The reform is estimated to carry a total fiscal cost of approximately €820 million over a six-year period (2027-2032). This burden will be split between the state, which is expected to cover €486 million, and the Social Insurance Fund, which will cover €334 million. Minister Mousiouttas emphasized that this reform is essential for the long-term sustainability of public finances and the pension system itself.

Discussions with unions and employers continue regarding the second pillar, which involves provident funds, but the government has clarified that progress on this component is not a prerequisite for the submission of the primary bill. Technical committees and the International Labour Organization (ILO) have provided frameworks for these discussions, while unions are expected to formally present their consolidated positions by late September.