Cyprus pension reform targeting implementation by 2027

Cypriot Minister of Labour Marinos Mousiouttas announced that the first phase of the national pension reform is expected to be implemented on January 1, 2027. This initial stage focuses on the Social Insurance Fund (TKA) and aims to provide noticeable increases in pensions, particularly for low-income retirees. The reform seeks to eliminate existing distortions, establish a new management and investment model for the Fund, and outline the gradual repayment of government debt to the TKA. The minister indicated that the 12% early retirement penalty is expected to be reduced following an actuarial study. However, the second and third pillars of the reform, involving provident funds and private insurance, will be delayed by two to four years. This delay is attributed to the European authority's requirement for an upgraded and independent supervisory body. While trade unions demand the simultaneous implementation of all pillars, the government plans to finalize the investment policy in consultation with the Ministry of Finance.