Cyprus Labour Advisory Body Discusses 12% Pension Penalty Reform Costs
Cyprus’s Labour Advisory Body convened to examine the financial implications of proposals to reform the 12% pension penalty. The Labour Ministry, alongside the state actuary and Finance Ministry, presented their cost analysis to trade unions. Labour Minister is set to submit his own calculations, following disagreements over costs in earlier proposals.
Unions anticipate the study will show their proposals to be more expensive than the government’s plan, and are prepared to negotiate possible benefit reductions. They also requested a detailed cost breakdown for each part of the bill to assess the government’s true financial contribution, currently estimated at 182 million euros annually.
Labour Minister plans to engage political parties, starting with DISY, to explain the reform provisions ahead of its expected implementation on January 1, 2027. He assured that actuarial reviews planned for 2031 include provisions for adjusting contributions if the pension fund’s sustainability requires it.
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