Cyprus Employers Ask President for Guarantees on Pension Reform

The Federation of Employers and Industrialists of Cyprus (OEV) outlined its concerns about pension reform to President Nikos Christodoulides. The federation’s executive committee was received by the president on Monday at the Presidential Palace in Nicosia.

OEV President Yorgos Pantelides described the meeting as “substantive and constructive”. He said employers were most concerned about the adequacy of future pensions and the long-term sustainability of the Social Insurance Fund. “We outlined our concerns regarding pensions and stressed that we support ensuring adequate pensions,” he said.

There was no talk of “red lines”, Pantelides clarified: the sides discussed safeguards in the event of an economic crisis and reached agreement on a number of positions. He expects the ongoing dialogue to make it possible to carry out the reform, at least in its first stage.

Employers were not told how much the reform would cost. The state has undertaken to build up the necessary reserve within the agreed timeframe, while an actuarial study must be carried out by 2031.

OEV also raised the issue of the Redundancy Fund, whose reserve currently stands at €1.5 billion. The federation expects the government to decide to reduce the contribution to the fund while also introducing a safeguard mechanism in case the reserve has to be built back up to €1.2 billion.

In addition to pensions, the meeting covered the cost of labour, bureaucracy, staff shortages in key sectors, and the availability and cost of electricity. Pantelides noted that economic indicators looked encouraging, with growth running at around 3.5%.

The sides agreed to maintain an open channel of communication. In November, the business community will meet with the government in a full Council of Ministers session, while before then OEV will hold meetings with all parliamentary parties.