Akel call to abolish early pension penalty

Akel leader Andros Kyprianou on Sunday called for a new social policy, starting with the abolition of the 12 per cent deduction in pension imposed on those who retire at 63 instead of 65.

In a written statement, Kyprianou echoed a call by its affiliated trade union PEO on Friday to do the same.
“Today’s retirees and future generations of retirees deserve a decent standard of living,” said Kyprianou.

The government had responded to PEO on Friday saying the move would effectively roll back the retirement age from 65 to 63 and render the social insurance fund unviable.

Labour Minister Zeta Emilianidou said the adjustment PEO wanted scrapped had been passed by the Akel administration in 2012 for specific reasons.

The age of normal retirement has been set by the Akel government in 2012 as 65. Legal provisions were included so that for each month someone opts to collect their pension earlier, the pension is reduced by 0.5 per cent.

She said the adjustment was enforced by the Akel administration in 2012, which also added provisions so that from 2023, the retirement age would rise by six months each year to gradually reach 67.

But Kyprianou said on Sunday “the first priority” of a more progressive welfare state should be to “the abolition of the 12 per cent for those who choose to retire at the age of 63”.

He said during recent meetings with a number of organizations and bodies, “it was confirmed that the social policy implemented in our country is in deficit and does not meet current needs”.

“The country today needs a progressive welfare state, with the planning of a holistic social policy. This is especially necessary when the risk of exacerbating social and economic inequalities from the effects of the pandemic is visible. The implementation of such a plan requires a substantial increase in public spending on social policy,” he said.