Trade unions on Thursday gave the thumbs-down to the pension reform bills being submitted by July, citing many loose ends, while the government was determined to press ahead regardless.

Labour Minister Marinos Mousiouttas held talks with the SEK and PEO syndicates who are part of the Labour Advisory Board – the top advisory body on labour relations and social policy consisting of representatives of the government, employers and trade unions.

Later, Mousiouttas – despite acknowledging the unions’ concerns – told media that the legislation relating to pension reform would be tabled to parliament before the House breaks for the summer recess.

The House will go into recess in mid-July.

“This way, we will have all the summer ahead of us to discuss it,” the minister said.

According to the timeline envisioned by the government, the bills would be submitted in July, informal discussions held during the summer between the government and the parties in parliament, and then the formal review of the bills would begin in the autumn when the House reconvenes.

The goal is for the pension reform legislation to be approved and go live by January 1, 2027.

But both the SEK and PEO unions had serious reservations. They stressed that the content of the reform should take precedence over any timeline.

The leaders of both syndicates said the overriding objective is to ensure adequate pensions in the long run, and pensions that are above the poverty line.

SEK’s Andreas Matsas disagreed with the government’s plan to discuss the various ‘pillars’ of pension reform separately, as one aspect affects the other.

There are two ‘pillars’, or tracks, to the reform. The first concerns state pensions; the second relates to provident funds, as well as the cash reserves of the Social Insurance Fund (SIF) and its investment policy.

On the SIF, the minister reiterated that the government will end the decades-long practice of borrowing from the fund.

Currently, the state owes some €12 billion to the SIF.

The idea is to gradually repay that sum in instalments. Repayment would depend on the size of the national debt each fiscal year, with instalments made whenever the national debt is below a certain percentage of GDP.

That percentage remains to be determined.

At the same time, the government plans to set up a body overseeing the investment of the surpluses of the SIF.

At the moment, the statutory pension system in Cyprus consists of two main components: a fixed (basic) pension and a proportional (supplementary) pension, calculated based on contributions.

As part of the coming reform, the government intends to combine the ‘small cheque’, the social pension and the basic pension into a single remittance.

The so-called ‘small’ cheque is an allowance given to low-income pensioners.

The social pension is a monthly grant given to persons aged 65 and over who are not entitled to a statutory pension from the SIF. It covers for example housewives who never worked.

The last major reform of the pension system took place in 1980, with additional changes introduced during 2012-2013 as part of Cyprus’ agreement with international lenders.