Cyprus introduces pension reform bill to increase retiree benefits

The Cypriot government has submitted a draft bill for a major pension reform to social partners, aiming for implementation by January 1, 2027. Labor Minister Marinos Mousiotis stated that the plan includes pension increases for all retirees, with approximately 50,000 individuals expected to receive raises exceeding €100 per month. The reform also proposes reducing the 12% penalty for early retirement at age 63 to 7.5% of the basic pension.

While the reform is viewed as a positive step toward supporting low-income retirees and maintaining the retirement age at 65, experts and officials have raised concerns. Andreas Charalambous, President of the Fiscal Council of Cyprus, noted that while the direction is correct, the long-term cost and funding methods remain unclear. Financial expert Andreas Milidonis highlighted that the reform lacks a comprehensive approach to the second pillar of pensions and warned that the fiscal cost could reach €250 million in the first five years.

Discussions with social partners will continue through August 28, with the goal of submitting the bill to Parliament in September. The government aims to reach a consensus to minimize differences before the implementation date.