Cyprus Ministry of Labour proposes pension increase for all retirees and reduces early retirement penalty to 7.5%
The Cyprus Ministry of Labour and Social Insurance has proposed a pension reform that includes increases for all 123,000 current retirees and a reduction of the early retirement penalty from 12% to 7.5%. According to Minister Marinos Mousiouttas, approximately 50,000 retirees will see monthly pension increases exceeding 100 euros, while around 60,000 will have increases under 100 euros over the next five years. Future retirees with low incomes may experience increases ranging from 5% to 60% compared to the existing system.
Cost actuary Kostas Stavrakis highlighted that the new system aims to rationalize pension payments, expecting an annual fiscal impact of 50 million euros during the first five years. Notably, the reform will end state borrowing from the Social Insurance Fund. Discussions on the proposal will continue in the next Labour Advisory Body meeting scheduled for August 28, with plans to implement the reforms starting January 1, 2027.
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