The goal is to increase the basic pension to the highest level possible, without affecting the capacity of the Social Insurance Fund, said the Minister of Labour and Social Insurance, Marinos Moushouttas, at a press conference where he presented the Ministry’s achievements and goals.
As the issue of pension reform dominates the Ministry’s planning for 2026, the Minister was asked about the level of the basic pension after the reform, in light of statements made by politicians on the issue, and replied that “various references have been made during the pre-election period,” referring to the upcoming parliamentary elections in May, adding that promises should be able to be materialised.
Moushouttas also reiterated that the largest percentage increase will be seen in the lowest pensions.
After stating that the Ministry's timeline includes submission of reform bills to Parliament in June 2026, the launch of the parliamentary discussion in September 2026, and official implementation of the new system on January 1, 2027, the Minister was asked whether this is feasible. Moushouttas said that social partners do not appear to have major differences regarding the First Pillar, that concerns the Social Insurance Fund, but are requesting more information, with specific data and clarifications.
The biggest differences seem to be in the Second Pillar, which includes the Provident Funds, Moushouttas said, expressing the view that through dialogue, which has already begun intensively, these can be resolved.
According to the Minister, the goals of the reform are to ensure adequate and resilient pension income for all, reduce the risk of poverty among pensioners, and ensure the long-term sustainability of the Social Insurance Fund.
Strong labour market
Moushouttas also referred to historic highs recorded in the labour market in 2025. Specifically, the employment rate reached 81.3%, achieving the national target of 80% for 2030 five years earlier. At the same time, registered unemployed persons fell to 10,152, marking a significant decrease of 7.9% compared to 2024.
According to the Minister, Cyprus is one of the “strongest labour markets in the EU,” as the average unemployment rate in the EU stands at 6%, while in Cyprus it remains consistently below 5%, with unemployment falling to just 4.4% in 2025. Youth unemployment also dropped to 13.5% and has been below the European average since 2024 for the first time since 2011.
At the same time, the Minister stated that the average monthly salary reached €2,605 in 2025, while the median reached €1,968, showing increases of 18.3% and 15.6% respectively compared to 2022, with the percentage of low-wage workers decreasing by 7 percentage points.
Moushouttas also said that, within the framework of the Cypriot Presidency of the Council of the EU, Cyprus is actively promoting fair and safe work, social justice, and worker mobility at the European level, with the most notable success being the political agreement on the revision of the regulation coordinating social security systems after ten years of stagnation.
According to the Minister, the Ministry’s planning for 2026 focuses on six strategic goals: completing pension reform, responding more quickly to citizens’ needs, improving working terms and conditions, expanding support for working parents, effectively addressing undeclared and illegal work, and continuing investment in lifelong learning and human capital development.
(Source: CNA)
