Cyprus reforms social insurance fund management

The Labor Advisory Body in Cyprus met to discuss pension reforms, with Labor Minister Marinos Mousiouttas announcing the end of the state's practice of borrowing from the Social Insurance Fund. The government plans to pay off the existing 12 billion euro debt to the fund over 40 years, with annual repayments set at approximately 0.3% of the GDP. Future annual surpluses, estimated at 800 million euros, will no longer be used by the state but instead directed toward a dedicated investment account to ensure long-term sustainability. Projections suggest this fund could reach 50 to 60 billion euros by 2066. To manage these investments, the government intends to establish an independent entity based on international governance standards. Additionally, the ministry addressed concerns regarding the first pillar of the pension system, including the 12% actuarial reduction. The draft bill is scheduled for submission to Parliament by early July 2026, with legislative debates expected to commence in September 2026. The ministry will consult with political parties throughout the summer to finalize the reform details.