Government presents detailed proposal on 12% actuarial reduction in pension reform at advisory meeting
The Government of Cyprus has presented a comprehensive proposal concerning the 12% actuarial reduction applied to those opting to retire at age 63 during the latest session of the Labour Advisory Body. Minister of Labour and Social Insurance Marinos Mousiouttas highlighted that approximately 40,000 of the current 120,000 pensioners have faced some actuarial reduction, with estimates indicating an additional 40,000 cases over the next five years due to population aging.
The proposal aims to reduce the actuarial cut from 12% to 7.5% on the basic pension component, excluding supplementary pensions, resulting in an average 6% increase in affected pensions. The cost is estimated at €24 million for current pensioners and an additional €12 million over the next five years. The government also included provisions for state social insurance contributions for specific groups such as mothers caring for children, persons with disabilities, and young job seekers.
Social partners expressed the need for full economic transparency on the reform’s costs and impacts, anticipating further discussions with the Finance Minister. Concerns were also voiced about potential future contribution increases to maintain pension benefits, though the government clarified that such measures would depend on actuarial assessments in five years and would involve all parties.
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