The Labour Advisory Body will reconvene on Monday 25 May to continue consultations between the Ministry of Labour and social partners, having already secured agreement on three fundamental points of the upcoming pension reform.
Although the meeting is expected to be difficult, falling on the day after the parliamentary elections, officials look set to table critical outstanding issues. The government needs to resolve these matters to meet its targeted timeline of submitting the relevant bills to parliament in June 2026, aiming to implement the new system on 1 January 2027.
The social partners have already agreed on the following points:
- There will be no reduction in pensions, reversing initial discussions regarding potential cuts.
- The government will end its practice of borrowing from the Social Insurance Fund (SIF) reserves.
- An independent body will be established to manage and invest the SIF reserves.
Beyond these agreements, several core components of the reform must still move forward. Key issues expected to return to the negotiating table include the reduction percentage for the 12% actuarial reduction penalty, the increase for low pensions, the roadmap for provident fund policy, and the new investment policy for the SIF.
However, a pivotal issue continues to overshadow the consultations within the Labour Advisory Body, threatening to delay the established timelines. Trade unions and employers’ organisations are demanding a comprehensive blueprint for the pension reform that encompasses all pillars, even if they are not implemented simultaneously.
Sources indicate that trade unions will not settle for mere outlines regarding government intentions for the remaining pillars. Instead, they are demanding a full agreement on every component of the pension reform. Sources warned that without a comprehensive agreement, the process risks drifting, leaving certain points permanently shelved. They noted that a potential change of government in 2028 could introduce different policies and force discussions to restart from scratch, whereas a total agreement now would restrict future changes to minor adjustments rather than a radical overhaul.
Meanwhile, Giorgos Pantelidis, the chairman of the Employers and Industrialists Federation (OEB) and vice-president of BusinessEurope, represented Cypriot businesses at the BusinessEurope Council of Presidents in Dublin. Pantelidis intervened repeatedly to promote the “One Europe – One Market” agenda adopted during the informal EU Summit in Nicosia in April.
Following praise for the Cypriot Presidency’s handling of the summit, Pantelidis emphasised the importance of Europe continuing to reduce its regulatory burden and deepening the Single Market.
A BusinessEurope statement noted that the EU must continue diversifying its trade partnerships and securing access to new markets to counter geopolitical risks. BusinessEurope President Fredrik Persson added that while significant efforts have been made to put competitiveness at the top of the agenda, companies have yet to feel the impact.
