Rejected pension cut idea back on the table, sources say

Economy governmentNikos ChristodoulidespensionerspensionsTop News Rejected pension cut idea back on the table, sources say Ypourgos Ergasias 1536x1152 Relevant News Isotita takes fight over Maltezos dismissal to court and parliament 11 August 2026 Rejected pension cut idea back on the table, sources say 11 August 2026 DISY, government trade truce for a day as rift hardens 11 August 2026 Angelos Angelodimou 11 August 2026 FacebookXWhatsAppEmailPrintViber Government talks over pension reform have reached a critical stage. With just days to go before the bill is due to be handed to social partners, information gathered by philenews from several sides is raising serious concerns about its final shape. According to that information, a scenario to cut some pensions in order to fund increases in low pensions remains on the table. Specifically, sources told philenews that one option still circulating in government corridors, and reportedly still “in play,” is a return of the actuaries’ proposal to reduce the amount paid to high-income pensioners, to cover the planned increase in low pensions. The scenario, first put forward by actuaries some months ago, had been rejected by the President himself, but appears to be resurfacing by another route. Social partners appear to have got wind of it too, and their response is clear: don’t even submit such a bill. According to philenews’ information, the formula the government is working on would affect future retirees rather than current pensioners. The idea under consideration is to cut, by a small percentage but enough to cover the state’s losses, the pensions of those considered high earners. This would apply only to the proportional part of pensions, not the basic part, and would affect those at the top of the insurable earnings scale. In other words, if the cut goes ahead, it would fall on private-sector pensioners, since public employees do not contribute to the actuarial part of the Social Insurance Fund (TKA), in order to cover the cost of the low-pension increase. Two questions arise from this. First, who and how many private-sector pensioners count as high earners? Second, are those currently classed as low pensioners genuinely people who could not contribute more to the Fund because they were low-paid, or does that group also include people who hadn’t declared their full income and now receive a low pension despite having considerable wealth behind them? The pension cut scenario was also floated some months ago, but was rejected after public reaction, first by the President and later by the Labour Minister, who described it as one of the actuaries’ scenarios. Although the government insists nothing of the kind will happen, philenews’ information from more than one side indicates the scenario is reportedly under discussion with specific percentages already on the table. Borrowing and public debt Concern also centres on two further points in the pension reform. The first involves ending the practice of successive governments borrowing from the Social Insurance Fund’s surpluses, and the gradual repayment of the resulting debt, currently put at 12 billion euros. On one hand, this is expected to gradually build up a significant reserve for the Fund, which would need to be managed by a fully independent and highly qualified committee. On the other, the state would automatically lose around one billion euros a year, 800 to 900 million euros from the end of borrowing and 100 million euros from debt repayment. The Fund’s surplus stood at around one billion euros in 2024 and close to 800 million euros in 2025. The state would have to find this money elsewhere, potentially through external borrowing, which unlike internal borrowing would count toward public debt. The second point concerns the pension system’s second pillar, the provident funds. In an interview on RIK on Sunday, the Labour Minister said reform would go ahead on the first pillar, while for the second pillar the government would give social partners a roadmap setting out the steps it plans to take. Social partners, particularly the unions, say they will not simply accept the roadmap being tabled and insist an agreement must be reached on it. The coming days will be critical for the final shape of the pension reform bill. Sessions of the Labour Advisory Body have been scheduled for August 19 and 28, where the government’s bill will be explained and analysed to social partners. Subscribe to our Newsletter Latest News Isotita takes fight over Maltezos dismissal to court and parliament DISY, government trade truce for a day as rift hardens Larnaca dog owners object to restricted vehicle access at Spyros Beach Pension cut scenario for high earners still on table, sources say Things to do on Tuesday, August 11 Cyprus faces 40C heat on Tuesday as yellow warning in effect Magnitude 7.4 earthquake injures people, damages buildings in Colombia (videos) Follow en.philenews on Google News and be the first to know all the news about Cyprus and the world.