**No Pension Cuts Under Reform, Labour Minister Assures**
In a recent statement, Labour Minister Marinos Mousiouttas assured the public that the upcoming pension reform will not result in any reductions to pensions. Instead, all pensioners are expected to receive an increase, as the government prepares to submit the relevant legislation to parliament in September.
Mousiouttas addressed concerns regarding potential cuts to higher pensions, emphasizing, “There is no such possibility.” He acknowledged that during the initial stages of the reform process, a proposal had been considered that would have implemented a 5 percent reduction for the highest pensions disbursed by the Social Insurance Fund. However, this idea was quickly abandoned due to significant opposition from social partners. “We immediately ruled out this possibility,” he stated.
The minister further clarified that the current options being evaluated for the reform do not include any reductions. He reassured that “everyone will have some increase,” although the extent of the increase may vary among individuals. Some pensioners may see smaller increases, while others may receive larger ones.
The draft bill for the pension reform is currently being finalized, following consultations with Finance Minister Makis Keravnos and President Nikos Christodoulides. Mousiouttas expressed optimism that the bill would be ready by the end of the week, stating that even if the timeline is not met, it would certainly be available before the labour advisory board meeting scheduled for next Wednesday. The government aims to present the first pillar of the reform, which encompasses the Social Insurance Fund, minimum pension provisions, and penalties for early retirement, to parliament during its first session after the summer recess, anticipated on September 20.
However, the proposed timeline has faced criticism from trade unions, who have raised concerns about the adequacy of time available for thorough examination and discussion of the bill prior to its submission to the House. In response to these concerns, Mousiouttas acknowledged that the differences between the government and the unions are “not insurmountable.” He reiterated the ministry's willingness to consider proposals that align with the reform’s framework, stating, “If there is something that moves within the philosophy of the legislation and does not change the economic data, we are ready to adopt it.”
The minister also cautioned that any proposals requiring additional funding must be accompanied by corresponding savings from other areas, emphasizing that the resources of the Social Insurance Fund are “not inexhaustible.”
In addition to the discussions surrounding the first pillar of the pension reform, talks are ongoing regarding the second pillar, which pertains to provident funds. The next technical committee meeting is scheduled for September 1, where the government hopes to establish a framework agreement. Mousiouttas clarified that while reaching an agreement on the second pillar is desirable, it is not a prerequisite for the first pillar to move forward.
As the government continues to work on the pension reform, the emphasis remains on ensuring that all pensioners benefit from the changes, with no reductions in their pensions expected. The upcoming parliamentary session will be crucial in determining the future of the pension system in Cyprus.