Cyprus Mail

Social Insurance Fund will honour promises, labour minister says (Update-1)

The Social Insurance Fund will be in position to honour its promise to pensioners without resorting to an increase of contributions or reducing pensions and other benefits, labour minister Zeta Emilianidou said.

The minister, who was commenting in a telephone interview on an actuarial study carried out by the International Labour Office, which demonstrated that the Social Insurance Fund is sustainable until 2080 and beyond, said that the findings “are very important”.

“Pensions, maternity and sick benefits, as well as unemployment assistance paid by the Social Insurance Fund remain secure until 2080 because this is where the study ends,” she said. “Therefore, there is no need to increase contribution rates” or to resort to pension cuts.

“What the actuarial study achieved was to see whether based on (current) revenue and expenses and conservative assumptions the fund is viable,” she continued.

Emilianidou said that the verdict of the actuarial study, based on December 2014 figures and Cyprus’s legislation, which sets overall social insurance contribution rates at 11.5 per cent of gross salary for employers and 7.8 per cent for employees, does not rule out an extension of retirement age to 65, “depending on what happens with life expectancy”.

“All these assumptions are based on the Social Insurance Department’s data and the law, as they stand today. No scenarios that include lower contributions are looked at because this is not part of actuarial studies,” she said. “The extension of the retirement age is a different issue”.

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