Labour advisory board addresses provident fund reform

On October 29, 2026, the Labour Advisory Board (ESS) convened in Cyprus to discuss the second pillar of pension reform, specifically focusing on provident funds. Labour Minister Marinos Mousiouttas chaired the meeting, which marked the first formal discussion of these funds within the advisory body as part of ongoing efforts to achieve a social compromise.

The core of the disagreement lies between trade unions and employers. Unions advocate for the mandatory legal implementation of provident funds across all private companies and seek to exempt existing funds from new regulatory frameworks. Conversely, employers insist that participation in these funds should remain strictly voluntary. Employers also dispute the exemption of existing funds, expressing concern over the current practice of paying out reserves as lump sums rather than utilizing them for long-term pension purposes. The government intends to evaluate these conflicting positions before the next meeting.

Minister Mousiouttas has requested that all partners provide written feedback, with the Employers and Industrialists Federation (OEB) expected to submit their views by the coming Tuesday. Further meetings of the advisory body are scheduled for November 9, 16, 23, and 30, during which the government aims to identify areas of convergence and define its formal position on the reform.