The major pension reform is moving forward, with the government aiming to begin implementing it on January 1, 2027.
Following the meeting of the Labor Advisory Council, the Ministers of Labor, Marinos Mousiouttas, and Finance, Makis Keravnos, confirmed their close collaboration, identifying support for low-income pensioners and ensuring fiscal balance as key priorities.
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Referring to a historic turning point coming after 46 years, the Minister of Labor emphasized that the proposals currently under discussion with the social partners are based on a clear three-pronged approach: the sustainability of the Social Security Fund, the resilience of public finances, and the overall economic stability of the state. “You understand where instability can lead us; unfortunately, we’ve experienced it in previous years,” warned Mr. Mousiouttas, noting that the processes are proceeding strictly according to schedule.
For his part, Finance Minister Makis Keravnos focused on the economic aspects of the reform, making it clear that Pillar 1 is the main priority at this stage. As he noted, “the government’s effort and initiative is to focus on increasing the pensions of low-income retirees,” adding, however, that no decision should jeopardize the long-term fiscal balance of the Cypriot economy.
Mr. Keravnos placed particular emphasis on the need to incorporate safeguards in the event of potential economic crises, an issue currently being addressed by specialized experts. “Under no circumstances should we proceed with a reform that focuses solely on the immediate future; rather, we must take a long-term view,”he said, noting that the key word for the system remains “solidarity” between the generations of workers and retirees.
When asked to comment on the cost of the alternative proposals submitted by the social partners, the Minister of Finance emphasized that the dialogue remains open and that additional data will be provided in the coming days. Finally, he clarified that the government’s basic proposal—which was formulated by the Ministry of Labor in collaboration with actuaries from the International Labor Office (ILO)—has been thoroughly reviewed by the Ministry of Finance and can be supported without jeopardizing public finances.
