Cyprus prepares for major pension reform in early 2027

Cypriot Minister of Labour Marinos Mousiouttas announced that a comprehensive pension reform bill is scheduled to be submitted to the House of Representatives by the end of September 2026, with parliamentary debate set to commence on October 13. The reform, based on an actuarial study by the International Labour Organization (ILO), aims to ensure the long-term sustainability of the Social Insurance Fund without increasing the retirement age or contribution rates.

Key provisions of the reform, which is slated for implementation on January 1, 2027, include pension increases for all beneficiaries, with priority given to low-income pensioners. Specifically, those receiving pensions up to €600 are guaranteed a minimum monthly increase of €30. Furthermore, over 50,000 pensioners are expected to receive monthly increases exceeding €100, while nearly 10,000 will see boosts of more than €200. The plan also includes a reduction in the 12% actuarial penalty for early retirement at age 63, which will be lowered to 7.5% for the basic pension. Minister Mousiouttas emphasized that no pensions will be reduced under the new framework, which addresses demographic shifts and the government’s obligation to repay funds borrowed from the Social Insurance Fund over previous decades.