Cyprus’ pension reform is expected to come into force on 1 January, 2027, provided it is approved by the House of Representatives, Labour and Social Insurance Minister Marinos Moushouttas has told the House Finance Committee, adding that the government plans to submit the relevant bills to Parliament in June.
Speaking after the committee's meeting on 26 January, Moushouttas said the reform aims to address existing distortions in the pension system and lead to higher pensions and benefits.
“The pension reform will resolve shortcomings that exist today and will increase pensions and benefits,” he said, stressing that the government’s target is implementation from the start of 2027.
Responding to questions from MPs, the minister said the state’s debt to the Social Insurance Fund stands at €11.3 billion, while total state liabilities to all funds amount to €12.8 billion. Lawmakers requested detailed data on how the debt increased under successive administrations, as well as a concrete repayment plan. Moushouttas noted that this issue is among those expected to be addressed through the reform.
Presenting the 2026 budget of the Social Insurance Fund, the minister said revenues are projected at €3.77 billion, compared with €3.52 billion forecast in the 2025 budget. Revenue is expected to come from contributions amounting to €3.22 billion, transfers from the Republic’s Consolidated Fund to support the minimum pension totalling €34.45 million, interest income of €225.9 million, and other receipts of €292.35 million.
Expenditure for 2026 is forecast at €2.74 billion, up from €2.41 billion in 2025. This includes pension payments of €2.17 billion, allowances and other benefits of €114.35 million, unemployment benefits of €70.9 million, administrative and management costs of €4.57 million, other expenses of €271.2 million, as well as provisions for unforeseen expenditure and reserves amounting to €100 million.
The budget surplus for 2026 is estimated at €1.03 billion, compared with a surplus of €940 million projected for 2025.
(Source: CNA)
