Cyprus’ pension system will be reformed and modernised under the current administration, Labour Minister Yiannis Panayiotou said on Tuesday.

Speaking after a session of the House labour committee, he added that this process requires social dialogue, political dialogue and in-depth research on the financial data and capabilities.

He added that the ministry is also looking into the amendment to the regulation concerning the reduction in pensions by 12 per cent for people that take early retirement at the age of 63.

Panayiotou said that the study will consider the years of contributions, to see if the issue of reducing pensions for early retirees can be resolved.

On the issue of the 12 per cent reduction, Panayiotou said that it would not be abolished, but what is being considered by the government is to mitigate the amount of the reduction, based on the years the individual has been working. He said that these reductions would be based on whether the individual had been contributing to the social insurance for 33 years or more.

However, some parties said that further explanation is need regarding the amendment for the 12 per cent reduction, while others said that Panayiotou’s explanations during the committee session were not sufficient.

“The truth is that we did not get the answers we wanted, at least with the precision we expected, since the minister explained that he will first inform the Social Insurance Council next Friday and then announcements will be made,” Akel MP Andros Kafakalias said.

He added that they are concerned about the minister’s report that the 12 per cent reduction would not be abolished.

“In any case, we will wait for the final proposal of the government to position ourselves,” he said.

Panayiotou added that another study is also being carried out regarding the payment of a widowers’ pension to men whose spouse died before 2018.