"We must foster dialogue based on concrete data and clear timelines," said the Minister of Labor and Social Security, Marinos Mousiouttas, noting that with the pension reform, all retirees will see increases, some larger and others smaller, depending on the specifics of each case—such as the number of years of contributions and the amount of contributions—and that “neither the retirement age nor the contribution rates are increasing.”
In his remarks on Wednesday at an AKEL workshop in Nicosia on the topic of the elderly, where he referred to the pension reform bill and what will change starting in January 2027 with its implementation, Mr. Mousiouttas said that in 2022, one in six residents of Cyprus was over 65 years old. By 2050, it will be nearly one in four, and by 2070, three in ten, he noted, adding that these figures are often presented as a “demographic time bomb.”
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“I must disagree with that term. The fact that we are living longer is a civilization’s greatest achievement, not its threat. The only threat is our lack of preparedness to deal with the situation that is arising,” he emphasized.
The question, therefore, he said, is not how many years we will live, but how we will live. “With what income, with what care, and with how much dignity. Behind the statistics I mentioned are real people—our own people. Elderly people living alone, retired couples who rely solely on their pensions, women who did not complete a full period of social security contributions because they devoted their lives to caring for their families, and who today receive pensions significantly lower than those of men,” he noted.
Pension System
Mr. Mousiouttas said that the bill for pension reform was drafted with the assistance of the International Labor Organization and concerns the first pillar of the pension system, namely the Social Insurance Fund. He explained that the reform means pensions will increase, with priority given to low-income retirees—that is, where the need is most pressing.
“All retirees will see increases—some larger and some smaller—depending on the specifics of each case, such as the number of years of contributions and the amount of those contributions. More than 50,000 of our fellow citizens will receive an increase of over 100 euros per month, and nearly 10,000 will see increases of over 200 euros per month,” he noted.
The Minister said that decades-old distortions are being corrected. “Neither the retirement age nor the contribution rates are increasing. And the Fund is being strengthened to ensure its sustainability over the next 40 to 50 years, because a pension must be guaranteed for our children and grandchildren. Implementation begins on January 1, 2027, and by the end of January, the difference will be visible—not in announcements, but in their bank accounts,” he noted.
In addition, he continued, a minimum guaranteed increase of 30 euros per month is being established for every current retiree with a pension of up to 600 euros, starting from the very first month of implementation. “That’s 350 euros a year, every year, and it’s the minimum, not the maximum. Furthermore, for the first time, periods outside of paid employment—such as raising children, caring for family members, periods of disability, and time before entering the labor market—will count toward the pension. “This is how we are beginning to close the gender pension gap I mentioned earlier.”
Mr. Mousiouttas pointed out that the 12% actuarial reduction for those who retired at age 63—a source of bitterness, as he noted, for thousands of our fellow citizens— is effectively mitigated and reduced to 7.5% of the basic pension, on a lifetime basis rather than temporarily, covering both current retirees and those who will retire by 2031.
He also noted that no pension will be reduced. “The bill provides for an explicit comparison between the old and new calculation methods, with the retiree always receiving the more favorable amount,” he said.
The Fund’s reserves, amounting to approximately 12 billion euros, he continued, no longer belong to the government in power but to those who worked and contributed. State borrowing from the Fund is coming to an end, he noted; annual surpluses are deposited into the Fund’s own investment account, and the gradual repayment of the debt is beginning.
“The Social Security Fund has specific revenues and specific limits. Any proposal for an additional benefit is welcome, regardless of where it comes from. However, it must be accompanied by an indication of its cost and its source of funding. This is the only way to ensure that the dialogue does not turn into an auction of promises that someone else will have to pay for later. After all, the final say rests with the Parliament. “Whatever is said today from this podium will find the Ministry’s door open, and it will be discussed with all the facts on the table,” he said.
Elderly Care
The Cypriot model of care, the Minister of Labor noted, has for decades relied almost exclusively on the family—and, primarily, on the women of the family. Given current employment trends and the geographical dispersion of families, he noted that this model is no longer sufficient, he added.
“The development of a comprehensive long-term care system, strengthening home-based care so that our elderly fellow citizens can remain in their homes and neighborhoods for as long as possible, as well as recognizing and supporting informal caregivers, are priorities that the State must address comprehensively, in close collaboration with our Ministry, the Deputy Ministry of Social Welfare, and the Ministry of Health,” he emphasized.
Mr. Mousiouttas also said that no pay raise can replace the feeling of remaining useful, which is why “active aging” is not just an empty phrase.
“It means employment for those who want to and are able to continue working. It means combating age discrimination in the labor market, which remains a reality and is often unacknowledged. It is training and retraining through the programs of the Human Resources Development Authority. It is the fight against digital exclusion, which makes an older person feel like a stranger in their own country every time a service moves online. “And finally, it is the recognition of the social participation and volunteerism of older adults as a benefit for society as a whole,” he said.
He confirmed that the results of the workshop will be reviewed by the relevant departments of the Ministry of Labor, that they will be taken into account in the ongoing dialogue, and added that he does not expect everyone to agree on everything, “and it would be disingenuous to claim otherwise. However, I expect that by the end of the day, we will have gained a better understanding of the issues facing the elderly,” he said.
Source: CNA
