**Pension Reform Talks Progress at Labour Advisory Board**
Discussions regarding pension reform in Cyprus are set to continue on Monday at the Labour Advisory Board, with Labour Minister Marinos Mousiouttas and Finance Minister Makis Keravnos leading the dialogue. The meeting is scheduled to commence at 9:30 AM at the Ministry of Labour.
Mousiouttas has emphasized the significance of pension reform, labeling it as the most critical reform initiative undertaken by the government this year. He noted that legislation pertaining to the first pillar of the reform, which focuses on the Social Insurance Fund, is expected to be submitted to Parliament in September.
One of the primary goals of the reform is to enhance pension adequacy and improve the overall pension payments for retirees. Mousiouttas stated that the proposed changes aim to increase pensions across the board, with a particular focus on providing additional support to low-income pensioners. He highlighted that approximately 40,000 of Cyprus' 120,000 pensioners are currently experiencing some form of pension reduction, with another 40,000 projected to be affected in the next five years due to demographic shifts and an ageing population.
The government's reform proposal includes a reduction in the current 12 percent pension cut, lowering it by 4.5 percentage points to 7.5 percent on the basic pension. However, this adjustment will not apply to supplementary pensions.
Government spokesman Konstantinos Letymbiotis reiterated the administration's commitment to supporting low-income pensioners while ensuring the long-term sustainability of the Social Insurance Fund for future generations. He indicated that over 40 percent of pensioners, equating to approximately 51,664 individuals, are anticipated to receive monthly increases exceeding €100 once the reform is enacted.
In a related statement, Disy president Annita Demetriou stressed the importance of ensuring that the pension reform delivers sustainable and adequate pensions without necessitating increased contributions or raising the retirement age. She pointed out that pensions provided by the government are notably low compared to European standards. In 2023, government expenditure on pensions in Cyprus accounted for 7.6 percent of the GDP, significantly lower than the EU average of 12.3 percent and Greece's 14.0 percent.
Furthermore, data from Eurostat reveals that elderly individuals aged 65 and above in Cyprus, who rely heavily on pensions for their income, face a poverty risk of 33.7 percent. Notably, government expenditure on old-age pensions in Cyprus stood at 6.0 percent of GDP in 2023, compared to 9.9 percent for the EU and 11.5 percent for Greece.
As discussions continue, the government remains focused on addressing the challenges posed by an ageing population and ensuring that pension reforms provide adequate support for current and future retirees. The outcome of these discussions will be closely monitored, as it holds significant implications for the financial security of many Cypriots in their retirement years.