Cyprus’s Labour Minister has said a proposal to cut Social Insurance Fund pensions above €1,700 should be dropped, after the idea drew strong opposition from trade unions, social partners and the public.
The proposal had involved reducing pensions by 2–5% for 5–10% of pensioners, apparently intended to fund increases for low pensioners. Labour Minister Marinos Mousiouttas said on Wednesday the scenario should be set aside.
“Our own view is that this scenario should be set aside and that we should remain with scenarios that do not involve any reduction in the acquired rights of any pensioner. We will find ways to resolve it,” he said.
The unions warned they would not accept the government reducing the size of any increase for low pensioners on the grounds that the high-pension cuts had been dropped.
Reform talks at the Presidential Palace
The minister’s remarks came after President Nikos Christodoulides met the leadership of the three main trade union confederations — SEK, PEO and DEOK — at the Presidential Palace on Wednesday to discuss a range of outstanding labour issues.
Christodoulides described the pension reform as the most significant since 1980. “This is an area where we want to see a meaningful increase — and I refer specifically to low pensioners,” he said, adding that the government intended to complete all procedures, including a parliamentary vote, within 2026.
Minimum wages and foreign workers also on agenda
On minimum wages, the unions reiterated their demand that legislated minimum wage floors incorporate the minimum hiring rates agreed in sectoral collective agreements — a position employers strongly oppose.
The president referred the unions to the relevant bodies where the matter is already under discussion, with a bill expected to go before the Council of Ministers shortly.
On the hourly expression of the minimum wage, the president reportedly agreed with the unions’ position, though they pressed for a swift decision rather than waiting until the next scheduled minimum wage review in two years.
On the employment of third-country workers, the government acknowledged it lacked the capacity to monitor compliance across all labour sectors and agreed the framework needed clarification for both employers and unions.
On Provident Funds, the government said it could not advance both pillars of the pension reform simultaneously. Labour Minister Mousiouttas said the goal was for the first-pillar legislation to take effect from 1 January 2027.
The unions said they could accept the second pillar being implemented at a later stage, provided the government first agreed a roadmap and policy framework for it — though they said they had not yet been persuaded by the government’s reasoning for the delay.
“Now is the time for decisions”
Union leaders made clear they would monitor whether Wednesday’s commitments translated into action, and warned they would respond if the government delivered only promises.
PEO General Secretary Sotiroula Charalambous was blunt. “Now is the time for the government to make decisions. There can be no more delay. Dialogue has taken place on many of these issues and we have spent a great deal of time on them — and we never refuse to talk. But now is the time for decisions,” she said.
SEK General Secretary Andreas Matsas described the meeting as “useful, substantive and hopefully constructive.” DEOK President Stelios Christodoulou said that while economic indicators were thriving, citizens were not benefiting equally. “For a society to be considered fair, the way in which the wealth it produces is distributed must be correspondingly fair,” he said.