Talks on Cyprus’s pension reform are continuing, with a reduction to the 12% early retirement penalty remaining on the table, according to information obtained by Phileleftheros.
Labour Minister Marinos Moushouttas first signalled movement on the penalty in an interview with Phileleftheros in mid-February. The latest information confirms that position has not changed and continues to be discussed as part of the broader pension reform consultations.
While any reduction is not expected to be substantial, sources suggest that combined with planned pension increases, the overall adjustment to payment amounts will be noticeable for retirees.
The reform covers two pillars. The government is pressing ahead with the first — changes to the Social Insurance Fund pension system — while keeping the second pillar, covering Provident Funds, open for parallel discussion.
Moushouttas has said the two pillars cannot be implemented simultaneously, a position already presented to social partners.
The Labour Advisory Body is expected to continue discussions on the timeline and general framework for Provident Fund reform, with the aim of establishing a clear roadmap for when and how the second pillar can proceed.
The minister has described the overall reform as an “emblematic change” that “society needs.”
Beyond the pension overhaul, Moushouttas announced a series of additional measures yesterday.
A proposal for a new four-year framework for overdue Social Insurance contributions — replacing the current 54-month scheme — will be submitted to the Council of Ministers, with the aim of sending it to parliament under urgent procedure to ease the burden on employers, businesses and individuals.
A bill on minimum wage adequacy is also expected to be tabled within the month, setting out an action plan to raise collective agreement coverage to 80% by September 2026.
The minister also referred to forthcoming legislation on workplace health and safety, and a regulation extending parental, maternity and paternity leave rights to foster parents.
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