Diko, SEK agree on pension reform necessity

Diko and trade union SEK found common ground on Friday in discussions on mandatory provident funds and other main aspects of pension reforms, with Diko president Nicholas Papadopoulos saying the reforms must go ahead to improve the quality of life of elderly people. SEK general secretary Andreas Matsas said “we cannot continue to take top place in Europe with the highest percentage of pensioners who continue to work because they need the money,” adding that one in three pensioners was either close to or under the poverty threshold. Papadopoulos said pension reforms must secure the viability of the social insurance fund and safeguard what has already been achieved through the dialogue among social partners. These reforms, he added, should neither lead to increased contributions and retirement age, nor the reduction of pension benefits. Related Articles • Pension reform talks progress, unions remain concerned “We believe the proposal that has come before us has positive aspects. The fact that the basic pension will be increased is an important and positive proposal,” he said. He also said it was positive that the government would stop borrowing from the social insurance fund and that “the reforms must include a proposal for establishing mandatory provident funds”. Matsas said there should be safeguards for a smooth transition to the new reformed pension system, adding that the trade union would not accept an increase in worker contributions to the social insurance fund or any cut in pension benefits. He added that said Diko and SEK saw eye to eye on the pension reforms, adding that the trade union wanted to see “better European practices being implemented in Cyprus”. “Through the mandatory implementation of provident funds, we believe pensions could be substantially complemented, particularly for workers of the private sector,” Matsas said. He explained that “there is a way for this to happen without a noticeable cost on the small and medium enterprises or even no cost at all” with various tax and other incentives.