Pension reform talks begin as minister vows to push bill through by September

Local governmentpensionerspensionsTop News Pension reform talks begin as minister vows to push bill through by September Sintaxeis 1536x1024 Relevant News Pension reform talks begin as minister vows to push bill through by September 18 August 2026 Yellow warning issued for thunderstorms 18 August 2026 Third Larnaca drowning at unguarded beach as only 10 of 19 towers staffed 18 August 2026 newsroom 18 August 2026 FacebookXWhatsAppEmailPrintViber Labour Minister Marinos Moushouttas will present the pension reform bill to social partners tomorrow, Wednesday, marking the start of substantive negotiations between the government and unions and employers. The presentation will take place during a session of the Labour Advisory Body, which will reconvene on August 28, where unions and employer organisations are expected to set out their positions. Moushouttas has repeatedly made clear that, with or without agreement from social partners, he will table the bill in Parliament around September 20. The government has set implementation of the reform from January 1, 2027 as a non-negotiable target. The negotiations that begin now will centre on four points: the size of the increase to minimum pensions in particular; the percentage cut to the 12% penalty; whether the bill will include widower’s pensions for men; and, although it concerns the second pillar, a fourth point that could affect first-pillar talks, namely whether Provident Fund contributions become mandatory or remain voluntary. Pension increases All pensioners, about 123,000 in total, will see increases in their pockets, Moushouttas has said, ruling out any reductions for particular categories of pensioner. The increase will range from 5% to 55%, he said, though the process will be completed over five years rather than immediately. The increase will not be uniform, he made clear, with factors such as years worked, contribution levels and payment frequency all taken into account. Unions say it is important that no pensioner ends up below the poverty line, something they say is not achieved under the government’s current proposals. Employers say they welcome a pension increase, but argue that pension policy and social policy should not be conflated. As a result, the two sides’ proposals on the size of the increases are expected to differ significantly. The 12% penalty The government appears to be settling on a proposal for a horizontal reduction to the 12% penalty. In an interview with Stockwatch, Moushouttas said the penalty “will be reduced horizontally, depending on the percentage we land on, either 7% or 8%.” The actuarial reduction will disappear altogether from 2032, he said, based on a new pension calculation formula. Those who continue working past the retirement age of 65 will be required to keep contributing to Social Insurance and will receive an increased pension as a result. Unions are not currently pushing for the penalty to be scrapped immediately, though the final percentage and timeline will be negotiated. Widower pensions The third point is a longstanding demand to include in the bill the 4,300 men who were widowed before January 1, 2018, before the current legislation came into force. The government is not receptive to this, with Moushouttas explaining it would automatically add about €35 million in costs. He has put the onus on social partners, saying the government would consider the request if they come forward with a proposal for a matching increase in revenue. Provident Funds The two sides’ positions on Provident Funds are diametrically opposed. Unions insist contributions must be mandatory, a position employers reject outright. Both sides agree the reform should be comprehensive, but the government says it would rather, at this stage, reach a framework agreement on the second pillar and implement it over time. The Technical Committee on Provident Funds continues to meet, with its next session scheduled for September 1. As a result, it is possible the review of the second pillar could be completed before the final bill, which focuses on the first pillar, is finalised, allowing both issues to progress to a satisfactory degree. Subscribe to our Newsletter Latest News Yellow warning issued for thunderstorms Third Larnaca drowning at unguarded beach as only 10 of 19 towers staffed Kalo Chorio fire: two probes reach Attorney General and army chief Cyprus mourns seven dead in five tragic incidents this summer Christodoulides, Mitsotakis, Macron agree to push cable project forward with navtex, French survey ships A wetter year rescued Cyprus’s dams, but key reserves could still run dry Modern offices pull ahead in Nicosia as older buildings face obsolescence Follow en.philenews on Google News and be the first to know all the news about Cyprus and the world.