A series of meetings are currently underway in Cyprus as a technical committee comprising of social partners, the Ministry of Labour, and the International Labour Organization (ILO), convene to examine the adequacy of pensions across the country.
According to Politis sources, the committee held its sixth meeting on Monday, as part of a broader plan to restructure the pension system. The goal: to establish a unified system of pension benefits that covers all four recognised pillars: social insurance, provident funds, private schemes, and a newly introduced “zero pillar” for state support of vulnerable groups.
Meetings began in June and have continued weekly through July, with five to six more expected before proposals take shape. The discussions aim to address whether pensions in Cyprus can truly support a decent standard of living after retirement.
Pensions among the lowest in Europe
The data paints a bleak picture. According to Eurostat figures published in May, Cyprus ranks fifth from the bottom in the EU in terms of the proportion of people aged 50–74 receiving a pension.
Today, an estimated 33,000 low-income pensioners receive additional state aid, while around 100,000 pensioners collect monthly pensions ranging from €415 to €1,000. In total, Cyprus has approximately 178,000 pensioners, including recipients of the so-called “housewife’s pension.”
A 2025 European Commission report on employment and social developments (ESDE) shows that Cyprus has the highest rate of early retirement with reduced pensions in the EU, at a staggering 45.8%. The EU average is 19.4%. Portugal (38.3%) and Belgium (38.2%) follow, while Bulgaria and Slovenia show minimal early retirement at just 1.8% and 4.6%, respectively.
Moreover, just 34.8% of Cypriot pensioners aged 50–74 stopped working after receiving their first state pension, far below countries like Slovenia (84.3%) and Romania (84%).
Austerity-era cuts remain
One of the most contentious issues is the actuarial reduction of 12% imposed on pensions for those retiring at age 63, translating to a 0.5% cut for every month before 65.
Kostas Skarparis, General Secretary of the Union of Cypriot Pensioners (EKYSY), describes the policy as "punitive and outdated," especially during a period of soaring inflation and living costs. He notes that the government's recent proposal to partially remove the penalty applies to only one in four affected retirees.
Under that proposal, the 12% reduction would be removed only from the basic part of the pension, resulting in a meagre monthly gain of around €50–€60. Even then, pensioners would be required to have 40.4 years of actual contributions with a minimum of one unit per year. Additionally, the plan would eliminate all creditable periods, including military service, higher education, maternity leave, unemployment, illness, and childbearing—further disadvantaging many.
Michalis Rossis, Secretary of the PESYS retirees' division at SEK, told Politis that pensions are being sidelined amid heated debates over the cost-of-living allowance (CoLA). He noted that only around 30% of pensioners, mostly former civil servants, would benefit from the Labour Minister’s latest proposal.
