Pension reform in Cyprus to increase payments for 123,000 pensioners by 5–55%

Cyprus Labour Minister Marinos Mousiouttas presented the pension reform plan to the board of the Federation of Employers and Industrialists (OEV): payments will increase for approximately 123,000 pensioners — by 5 to 55%. The minister presented the plan together with an actuary from the International Labour Organization (ILO).

The reform is based on a new calculation method: pensions will be calculated based on a person’s entire insurance record rather than under the current system. The retirement age will remain 65, while the option of working until the age of 67 will be retained.

Reductions for early retirement will be cut: payments are currently reduced by 12%, but after the reform the reduction will be approximately 7.5%. A minimum increase of €30 per month is предусмотрена for pensions below €600.

The reform will be introduced in stages from 2027 to 2031. According to the minister, it will cost the budget significantly more than €50 million per year. The bills are expected to be submitted to parliament by 30 September, with the reform scheduled to enter into force on 1 January 2027.

OEV supported the aim of the reform but asked for clarification on how it would be funded. Federation President Yorgos Pantelidis stressed that the priorities remain “adequate pensions and the long-term sustainability of the system”. He also proposed considering a gradual increase in the retirement age if future assessments reveal risks to the system’s sustainability.