Minister says contributions issue on table if pension fund struggles

Economy pensionerspensionsTop News Minister says contributions issue on table if pension fund struggles Keravnos Eisfores Relevant News Minister says contributions issue on table if pension fund struggles 2 September 2026 Bluetongue virus confirmed in sheep in Larnaca and Paphos 2 September 2026 Medical Association to review doctors over prison sick leave cases 2 September 2026 Angelos Angelodimou 2 September 2026 FacebookXWhatsAppEmailPrintViber Cyprus’s Finance Minister has muddied the outlook on pension contributions, days after the Labour Minister raised the possibility of a future increase, as unions prepare for a crucial meeting Thursday on a proposed 12% penalty. On August 29, philenews reported that doubts had emerged, following a Labour Advisory Body meeting, over two parameters officials had repeatedly said would not change under the pension reform: the retirement age and contribution levels. Sources told philenews the contribution question had entered a grey area, with an increase not ruled out at some stage. Under one scenario, if the government’s bill is implemented over a five-year period, a new actuarial study would follow to assess whether the Social Insurance Fund remains sustainable. Should the findings be negative, a contribution increase would then be considered. Contributions issue On the contributions question specifically, the Labour Minister addressed the possibility of a future increase two days ago, in a TV appearance on Alpha. Marinos Moushouttas reminded viewers that an earlier proposal to cut high pensions by 5 per cent had been rejected on constitutional grounds. Given this, a new actuarial study is now planned for 2031-2032 to assess the Fund’s sustainability. “If any problem arises, we will have to look at the contributions issue,” Moushouttas said, adding that he was optimistic dialogue would produce convergence between the sides. Wage increases and COLA The picture shifted yesterday, when the Finance Minister made further comments on Sigma that appeared to complicate rather than clarify it. Asked about a possible contribution increase, Makis Keravnos said contributions would inevitably rise as a result of higher employment, higher wages and the cost-of-living allowance (COLA). He said the state currently pays a substantial sum from its central budget to fund social insurance, an amount that would not rise, or would not rise significantly, meaning financing was secure and no new taxation would be needed. He noted that under existing legislation, a contribution adjustment is due to take place in 2029. The distinction being drawn is this: Keravnos’s remarks concerned contribution increases driven by wage and COLA growth and broader economic expansion, which he said would inevitably raise the sums paid in. The point under discussion in the reform, however, is different: whether the contribution rate itself will rise, independent of any wage- or COLA-driven increase in the amounts paid. Keravnos also said the government would not pursue a pension reform that endangers the Fund. “It will be within the state’s capabilities,” he said. 12% penalty Tomorrow, Thursday, the Labour Advisory Body will hold what is expected to be a critical meeting, with the 12% penalty as its sole item of discussion. The government’s proposal for a 12% actuarial adjustment is expected to return to the table, aimed at addressing questions raised by social partners. According to philenews sources, the Labour Minister, working with an actuary and a Finance Ministry team, is expected to present costings for union counter-proposals on the 12% penalty, which were originally submitted while Giannis Panayiotou held the labour portfolio. Finance Minister Makis Keravnos is also expected to attend one of the Labour Advisory Body’s upcoming meetings in person to present costed scenarios and provisions from the pension reform bill, and to respond to social partners’ questions on how the reform will be funded and from which budget lines. Subscribe to our Newsletter Latest News Bluetongue virus confirmed in sheep in Larnaca and Paphos Medical Association to review doctors over prison sick leave cases Cyprus doctors trapped by Brexit as UK qualifications go unrecognised Seven stops through Cyprus’s history, from Troodos to the coast The Freehouse: a spritzeria in Limassol’s old town Clear skies and a 39 degree peak on Wednesday Himalayas face severe glacial flood risks in years ahead, UN official warns Follow en.philenews on Google News and be the first to know all the news about Cyprus and the world.