Cyprus is aiming to implement a “demanding” pension reform from January 2027, with plans to strengthen minimum pensions, modernise the investment strategy of its Social Insurance Fund and improve the long-term sustainability of the system.

Speaking at an extraordinary meeting of the Workers' Group of the European Economic and Social Committee (EESC) in Nicosia on 2 June, Cyprus Minister of Labour and Social Insurance, Marinos Mousiouttas, described pension reform as the government's "most important social priority" for 2026.

Mousiouttas said the reform seeks to strike a balance between ensuring the long-term sustainability of the Social Insurance Fund and maintaining adequate and dignified pensions.

“For us, this balance between sustainability and social adequacy is non-negotiable. We will not build the sustainability of the system on the backs of the most vulnerable,” he stated.

The first phase of the reform will focus on the first pillar of the pension system, the Social Insurance Fund.

According to Mousiouttas, this will include measures to improve pension adequacy, particularly for those receiving minimum pensions, with the aim of ensuring that no pensioner falls below a dignified standard of living.

The minister also outlined plans to modernise the investment policy governing the fund's reserves through a new investment programme designed to improve efficiency and security.

In the medium term, the government also intends to strengthen the country's second-pillar provident fund system.

“Our overall objective is clear: a pension system that is fairer, more modern, more resilient and genuinely sustainable for future generations,” he said.

The reform is being developed through tripartite social dialogue involving government, employers and trade unions and is supported by an actuarial study.

Mousiouttas acknowledged that negotiations remain complex but said the government remained committed to achieving broad consensus ahead of implementation.

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