Cyprus government announces amendments to pension reform bill

Following consultations with the Labour Advisory Board, Cyprus Labour Minister Marinos Mousiouttas announced significant amendments to the upcoming pension reform bill on October 12, 2026. The government aims to implement the new system on January 1, 2027, provided that Parliament approves the legislation before the end of 2026. The main changes include distributing pension increases over a three-year period instead of five (30% in the first year, 30% in the second, and 40% in the third), extending the transitional phase from five to 15 years, and improving conditions for widowhood and disability pensions.

The Ministry of Labour emphasized that these adjustments, which follow concerns raised by unions like SEK and employer organizations, aim to ensure no pensioner suffers a benefit reduction while providing substantial increases for low-income retirees. For instance, specific examples show pension increases reaching up to 50% for lower-income brackets. Minister Mousiouttas noted that the extended transitional period resolves potential issues regarding increased contributions. While social partners have welcomed these concessions as a step forward, they continue to request further clarifications on specific issues such as the taxation of dividends and the calculation of pension benefits. The government is currently preparing to submit the finalized bill to the Council of Ministers this month.