Ensuring adequate pensions and protecting retirees from poverty are top social and fiscal challenges for Cyprus, particularly in an environment of an aging population and potential pension inadequacy.
In the context of the recent 16th Pension Forum, presented by AON, representatives from academia, government, employers and the Competitiveness Council exchanged views on the necessary reform and supervision of the system.
Professor of Finance at the University of Cyprus, Andreas Milidonis, pointed out that the ideal scenario would be the establishment of an independent authority that would supervise both insurance and pensions. The resubmission of the relevant bill to Parliament for voting is considered crucial for the implementation of this proposal. Alternatively, supervision could be entrusted to the Central Bank of Cyprus, which has independence, a high level of trust and expertise in asset management and the fight against money laundering. The second pillar of pensions, which currently corresponds to approximately €4.26 billion or 13% of GDP, already has a significant infrastructure and can be used to the benefit of pension stability and adequacy.
Evangelos Tryfonos, of the Cyprus Economy and Competitiveness Council , stressed the importance of mandatory participation of all workers in the second pillar to ensure the adequacy of future pensions. Without this measure, he noted, there is a risk of creating a group of pensioners with insufficient resources, underlining the need for automatic registration and continuous participation. "If nothing is done, we will continue to create the poor of the future," was one of his characteristic statements.
Lena Panayiotou, the Assistant Director General of the Cyprus Employers & Industrialists Federation (OEB), pointed out that Cyprus is at a critical point for the total reform of the pension system, which has remained almost unchanged since 1980. She stressed the need for the combined action of all pillars and careful planning to build a system sustainable for the coming decades and generations to come.
The discussion was moderated by Philippos Mannaris, Head of AON's Wealth Solutions for Cyprus and the Middle East.
(Source: InBusinessNews)
