Dorita Yiannakou
Labour Minister Marinos Mousiouttas has signaled the start of an intensive round of summer consultations on pension reform, aiming to bridge remaining differences between trade unions, employers and other stakeholders before the bill reaches parliament.
The government hopes to secure approval of the pension reform legislation with as few amendments as possible. As part of that effort, the minister plans to meet political parties over the summer to present the bill’s main provisions before it is formally submitted to the House of Representatives.
The bill, which was originally expected to be tabled in July, has now been pushed back until September.
Although Mousiouttas had previously indicated that the legislation would be submitted without delay, he ultimately decided to give social partners the additional time they requested in an effort to build broader consensus, particularly on the reform’s most important provisions.
During the most recent meeting of the Labour Advisory Body last week, the minister had been expected to present the draft legislation. However, trade unions and employers were informed by message on Sunday evening that the presentation would be postponed.
According to the minister, the decision was made to allow discussions to continue without tight deadlines and to increase the chances of reaching common ground before the bill enters parliament.
The draft legislation must first be approved by the Council of Ministers. Social partners are expected to receive the full text so they can review and comment on all provisions. However, according to information obtained by Kathimerini, the final version had not yet been distributed as of Tuesday.
No increase in retirement age or contributions
Mousiouttas said discussions on the so-called second pension pillar, which concerns provident funds, will continue and intensify in the coming months.
At the same time, he stressed that certain key elements of the reform are non-negotiable. These include:
- No increase in social insurance contributions
- No increase in the retirement age
- No measures that could undermine the long-term sustainability of the Social Insurance Fund
Talks are expected to continue in the coming weeks, with the next major milestone being a meeting of the House Labour Committee on July 7.
Despite ongoing disagreements, the government remains committed to implementing the reform by January 2027.
Government open to improvements
The minister acknowledged that some provisions could still be improved, including the method used to calculate the controversial 12% adjustment, as well as other aspects of the proposed legislation.
Employers maintain red lines
For employers, the main sticking point remains the second pension pillar and the future of provident funds.
OEB Director-General Michalis Antoniou welcomed the decision to delay the bill's submission, saying it provides time for improvements and greater convergence between stakeholders.
However, he reiterated that compulsory participation in the second pillar remains a red line for employers.
"The second pillar should be voluntary, supported by strong incentives," Antoniou said.
Employers also argue that pension levels should be directly linked to the contributions workers have paid throughout their careers. Any effort to support low-income pensioners, they say, should come through social welfare policies rather than the social insurance contributions of other workers.
Trade unions welcome delay
PEO General Secretary Sotiroula Charalambous described the postponement as a positive step, saying it creates space for more meaningful dialogue over the coming months.
She noted that several important issues remain unresolved, including:
- The calculation of the 12% adjustment
- Widow's pension arrangements for beneficiaries who qualified before 2018
- The proposed "Pillar Zero," which would provide a minimum income guarantee aimed at reducing poverty
Charalambous said the union has asked the Labour Ministry to provide detailed studies and data supporting the proposed changes, particularly on issues that have remained unresolved for years.
She also stressed that meeting deadlines should not come at the expense of creating a well-designed and workable pension system.
On the issue of provident funds, she called on the ministry to play a stronger mediating role between employers and unions to help find common ground and develop a clear roadmap for reform.
Labour Committee priorities
Pension reform will be one of the key issues facing the House Labour, Welfare and Social Insurance Committee, which held its first meeting this week following the May parliamentary elections.
Other major topics on the committee's agenda include collective labour agreements, implementation of new disability legislation, and Cyprus' compliance with EU rules on adequate minimum wages, particularly the expansion of collective bargaining agreements.
