Cyprus government announces upcoming pension reform for 2027

Cyprus Labour Minister Marinos Moushouttas has announced a major pension reform, which is scheduled for implementation on January 1, 2027. The reform aims to introduce a new 'Basic Pension' to replace existing social and minimum pensions while maintaining the contributory nature of the supplementary pillar. Officials, including Director General Stelios Himonas, stated that the new basic pension amount will be kept below €1,088 to ensure the long-term financial stability of the Social Insurance Fund. The ministry plans to reduce the current 12% actuarial penalty for early retirement at age 63. Additional measures include recognizing contributions for new entrants, informal caregivers, uninsured mothers, and persons with disabilities. The reform also mandates the creation of an independent supervisory authority to manage fund surpluses and state debt repayments. Draft legislation is expected to be submitted to Parliament in June 2026, with parliamentary debates scheduled for September 2026. The Minister confirmed that the retirement age will remain at 65 and contribution rates for employers and employees will not change.