Pension reform a ‘major objective’ for the government

Reforming pensions to ensure those in the private sector get a boost is a key goal for the labour ministry by 2025, as the government also realises the importance of hiring more foreign nationals in the next 20 years, Labour Minister Yiannis Panayiotou said on Monday.

Presenting the budget for next year during the House finance committee, Panayiotou detailed a €176m increase for 2024, amounting to €800m.

With the addition of co-financed projects from the European Social Fund amounting to €20 million, the budget comes to €821m.

The increase for 2024 is largely due to more spending in government contributions at €164m, a €2m increase in benefits and schemes and €3m more spent for staff.

Panayiotou said one of the key priorities for the ministry is reforming pensions by 2025, with a particular focus on ensuring pensions in the private sector are strengthened.

Referring to the labour force, the minister said 40 per cent of workers are not Cypriot, adding that due to the size of the Cypriot economy, it needs more workers.

For the next 20 years, making use of a workforce from third countries will be necessary, but in a way that is not to the detriment of the local population, he specified.

Panayiotou highlighted that considering most asylum seeker applications are eventually rejected, it is important that they are not given easy access to the labour market. Starting from October 1, asylum seekers must reside in Cyprus for nine months before they can work.

At the same time, inspections for undeclared work are increasing, he added.

Detailing five key policy priorities for 2024, Panayiotou began with pension reform as well as upgrading the digital infrastructure surrounding social security.

The second goal is to implement an integrated employment policy, so as to use tools available to effectively monitor employees and improve the response to the staffing needs of the labour market, he told MPs.

Panayiotou detailed the third objective is to better regulate working terms and conditions and institutionalise basic health and safety training.

The fourth goal is to promote modern professional development of the country’s workforce through the development of a modern professional culture, the provision of socially targeted vocational learning and the promotion of professional specialisation and certification.

The fifth objective is to improve service to citizens by speeding up the examination and response to citizens’ requests, with the benefits and allowances set to be paid on time.