Trade unions and employers in Cyprus split over pension funds — Cyprus Mail

In Cyprus, trade unions and employers’ organisations hold opposing positions on provident funds in the private sector. Trade unions are seeking legislation that would require all private companies to offer such schemes to employees, while employers insist that such funds should remain voluntary, Cyprus Mail reports.

Seeking a compromise

The issue was discussed at a meeting of the labour advisory council for the first time within this platform. Labour Minister Marinos Mousiouttas said the government would seek to find a compromise between the two sides.

Currently, provident funds in Cyprus operate on the basis of collective or private agreements between employers and employees. Legislation does not require companies to introduce such funds.

According to the minister, the government views these funds as a necessary mechanism that supplements workers’ pensions and aims to determine how to expand this system.

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The role of funds in pension reform

The parties also discussed the procedure for payments after retirement — as a lump sum or in instalments — as well as the possibility of borrowing part of the accumulated funds under certain conditions. Workers generally cannot access such savings before retirement age or termination of employment, although they may borrow part of the funds.

Mousiouttas stressed that the issue will not be resolved quickly: at least ten years are needed to establish a fund and obtain results from it. Once trade unions and employers reach an agreement, the government plans to begin drafting a bill in line with European standards.

Provident and occupational pension schemes belong to the second pillar of the reform. At the same time, the government continues to develop changes for the zero pillar, which concerns pensions for low-income people, and the first pillar — the mechanisms of the Social Insurance Fund and state pensions. They are planned to be introduced in early 2027.