Labour Minister Zeta Emilianidou on Tuesday effectively shut down opposition lawmakers’ aspirations to lower the retirement age from 65 to 63, saying such a move would endanger the long-term viability of the Social Insurance Fund.
MPs again urged the minister to consider scrapping the so-called ‘penalty’ of 12 per cent levied on people who opt to retire earlier than the age of 65.
Emilianidou again explained that this was not in fact a 12 per cent penalty as such, but that for each month someone decided to take a pension earlier, 0.5 per cent was deducted.
If someone retires at the age of 63 – 24 months before the age of 65 – the total deductible amount would be 24 times 0.5, or 12 per cent in total.
The minister also recalled that the pushing back of the retirement age was passed by the Akel administration in 2012.
Akel, now the main opposition party, are currently spearheading the drive to abolish the pension deductions on early retirement. But the government says this amounts to a roundabout way of lowering the retirement age de facto, rather than by law.
Emilianidou further noted that as of 2023, the retirement age will increase by six months every year, until it reaches the age of 67.
She said actuarial studies done since 2012 have shown that the Social Insurance Fund will collapse were – in tandem with the increase in life expectancy – the retirement age to be lowered.
“We shall not jeopardise the viability of the fund and the ability to pay out pensions,” she noted.
In other business, the House labour committee queried Emilianidou on her ministry’s plans for the rest of the year.
Akel deputy Andreas Kafkalias said they brought to the minister’s attention that she has until the end of July to promulgate and present to parliament any additional relief schemes for workers impacted by the fallout from the coronavirus-related restrictions.
Among other things, opposition MPs are calling for a national minimum wage.
Currently, Cyprus is one of a handful of EU states with no national minimum wage. Cyprus does have a minimum wage for nine professions, but these are set via ministerial decree.