Focus back on reduced pensions for early retirees

The labour advisory board will on Monday continue discussion over reduced pensions for those who choose to retire before the age of 65.

The proposal under discussion with Labour Minister Yiannis Panayiotou is to ease the current reduction of 12 per cent for those who choose to retire before the age of 65.

The proposal was presented to the social partners at the end of October. It provides for exemption of the basic pension from the 12 per cent reduction for employees who complete 40 years of contributions, based on conclusions drawn by an International Labour Organisation study.

Sek union, which rejected the proposal, has said that the ministry is open to suggestions, provided that they do not increase costs affecting the viability of the social insurance fund.

The minister, meanwhile, told the Cyprus News Agency that rejection of the ministry’s proposal would mean approximately 10,000 pensioners, who stand to benefit from it, will lose the chance of an immediate increase in their pension by approximately €800 per year.

Besides, Panayiotou emphasised that a possible postponement of the debate would “maintain the existing situation without any change for any pensioner,” which, he said, would not meet the current needs of the affected pensioners.

The minister noted that 8,614 pensioners, who from 2012 to 2022 suffered an actuarial reduction, and another 900 new pensioners from 2023 (making up 25 per cent of the total number affected to date) will lose the opportunity for an increase of their incomes.

Last week the minister declared that public rejections of government proposals were premature while negotiations were still underway.

Ten thousand pensioners stand to benefit from the tabled proposal, he said, while its rejection would result in 1,000 new pensioners every year missing out.