The newly appointed Technical Committee has commenced its work, tasked with reviewing the entire spectrum of pension benefits as part of the broader tax system reform in Cyprus.

This sweeping reform will not only affect the First Pillar, which refers to the Social Insurance Fund (TKA), but will also encompass the Second Pillar, namely Provident Funds, and the Third Pillar, which includes pension plans offered by private insurance companies.

In addition, the Committee’s mandate includes reviewing the “zero pillar”, which pertains to existing retirees receiving the minimum pension allowance (commonly referred to as “tsekoudi”), with the goal of reassessing and potentially adjusting this amount.

The upcoming pension reform is expected to have a supportive character, according to repeated statements by the competent Minister of Labour and Social Insurance. The reform will be integrated into the framework of a Unified Social Security System, aiming to streamline and modernize the country's retirement structure.

According to Brief sources, during the Committee’s initial meeting, a specific timeline was established: the review process must be concluded by the end of October.

Upon completion of the collaborative work by all social partners, the findings and proposals will be submitted to the Labour Advisory Body, followed by the drafting of legislation to be presented to the House of Representatives.

At the next Committee meeting, each pillar of the pension system will be analyzed in detail, with a focus on identifying specific shortcomings and reform opportunities.

One of the most contentious topics in the reform discussion is the 12% actuarial reduction (commonly referred to as the “penalty”) applied to early retirement under the First Pillar. This issue will be thoroughly debated as part of the reform agenda.

Moreover, the reform aims for a fundamental restructuring of all three pillars to ensure that even the minimum pension remains above the poverty line.

“Guaranteeing a dignified minimum pension will be a top priority,” a Committee member told Brief, stressing the need to ensure that no citizen is left unable to afford basic necessities.

The Technical Committee is composed of representatives from all social partners, including the Ministry of Labour and Social Insurance, employer and trade union organizations, the Director General of the relevant ministry, and actuary Kostas Stavrakis.