Cyprus prepares for major pension system reform

Cyprus is advancing its first major pension system reform since 1980, with implementation targeted for January 2027. Ahead of the 17th Pension Forum, Aon has emphasized that the Social Insurance Fund alone is insufficient to guarantee long-term income security for retirees. Filippos Mannaris, partner and head of Aon Wealth Solutions for Cyprus and the Middle East, argues that the current system fails to meet the needs of most private-sector employees.

Aon recommends a comprehensive three-pillar approach: strengthening the state pension, expanding occupational schemes, and fostering individual savings. Key policy proposals include the mandatory automatic enrollment of all private-sector employees into professional pension schemes with an opt-out provision. This mechanism is intended to bridge the gap between voluntary and compulsory participation, utilizing international best practices to bolster financial adequacy before demographic pressures on the system become unsustainable.