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Labour minister to unveil plan for early retirement adjustment

The Minister of Labour Yiannis Panayiotou, presides over a meeting of the Labour Advisory Board
The Minister of Labour Yiannis Panayiotou, presides over a meeting of the Labour Advisory Board

A plan for a 12 per cent early retirement adjustment will be presented next week, Minister of Labour Yiannis Panayiotou said on Friday after a meeting with the Labour Council.

The plan will be presented at the social insurance council meeting.

According to the minister, this 12 per cent adjustment downwards is not a penalty as the retirement age in Cyprus is 65.

“On the part of the ministry, our final proposals will be formulated and presented to the Council of the Social Insurance Fund, where a thorough discussion will take place with the members of the Council,” he said.

Regarding the morning session of the labour council, Panayiotou said that they discussed three very important issues and will continue their discussion in the afternoon with the equally important issue of artificial intelligence.

The minister added that during the session they discussed the better regulation of work through expanding the coverage of collective agreements, for a palliative intervention in the pension system in relation to the actuarial adjustment for retirement before the age of 65 and for the reconciliation of personal and professional life through the introduction of a measure to ease the working hours of working parents with many children.

“In this direction, for all three issues, the government has carried out extensive preparatory work, and we have presented the framework of these policies that we are promoting,” he added.

Referring to the necessity of dialogue, Panayiotou said that social dialogue is necessary for labour relations and for this reason the Labor Consultative Body will meet regularly so that “the issues that concern us are discussed extensively between the social partners and the state so that we can reach decisions that gather the widest social consensus.”

Last week, in an interview Panayiotou discussed was pension deductions for early retirement, a debate which has raged on for years.

As it stands, the statutory retirement age in Cyprus is 65, but there is also the option for people to retire early at 63 and take a 12 per cent deduction from their monthly pension – a long-standing point of contention for unions and workers’ groups.

Originally, since 1993 people who had made social insurance contributions for 33 years could retire at 63, but Panayiotou explained that the reduction was established in 2012 as part of the then-government’s negotiations with the Troika, to ensure early retirement would not affect the social insurance fund.

“If there is no 12 per cent adjustment, all employees will bear the cost, which means that the contributions of all employees will increase,” he said. “No government and no labour minister would abolish the 12 per cent deduction because this is not practically possible.”

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