Philenews

Pension Reform in Cyprus: 12% Penalty May Be Reduced

Published March 17, 2026, 08:17
Pension Reform in Cyprus: 12% Penalty May Be Reduced

Discussions regarding pension reform in Cyprus are ongoing, with a focus on the 12% penalty applied to pensions. While the complete abolition of the penalty is not guaranteed, a reduction in the percentage is being considered, in conjunction with pension increases, aiming for a noticeable improvement for pensioners. The government is promoting the reform in two pillars. The first concerns the Social Insurance Fund, while the second, related to Provident Funds, will be examined at a later stage. The priority is to promote changes to the social security system, while simultaneously shaping the roadmap for the reform of Provident Funds. Furthermore, the Ministry of Labour is promoting new regulations, such as the settlement of overdue contributions to Social Insurance with a duration of four years instead of 54 months, and the submission of a bill for the adequacy of minimum wages, aiming to increase the coverage of collective agreements. The Minister of Labour also announced a bill to strengthen safety and health at work. These changes aim to improve working conditions and protect workers.