Pension reform must substantially improve pensioners’ incomes, address distortions in the existing system and safeguard future generations, AKEL Secretary General Stefanos Stefanos said after meeting Labour and Social Insurance Minister Marinos Mousiouttas on Monday.
Mr Stefanos said AKEL was ready for a substantive dialogue, expressing hope that the ongoing discussion with the social partners would lead to decisions.
He said a key objective should be to secure adequate incomes for pensioners, particularly at a time of rising living costs. “A very large majority of pensioners today, because of their low incomes, are truly suffering greatly in this era of high prices and the significant pressure that exists,” he said.
According to the AKEL Secretary General, stronger incomes should result from a substantial increase in pensions through the Social Insurance Fund, combined with stronger state social-support policies for pensioners.
Mr Stefanos also raised the 12% actuarial reduction for retirement at the age of 63, as well as the issue of widows’ pensions for men whose wives died before 2018, as issues AKEL considers distortions.
He also referred to Provident Funds, noting that expanding the scheme should be examined. He said approximately 27% of workers in Cyprus are currently covered by the scheme, a rate below the European Union average.
The AKEL Secretary General put the central government’s debt to the Social Insurance Fund at around €12 billion. He said the state should gradually begin returning money to the Fund so that a genuine reserve can be created which, through an appropriate investment policy, could generate additional income and strengthen the sustainability of the Social Insurance Fund.
He stressed that the reform must also ensure that future generations will receive a pension, without pension reductions and without increased contributions.
For his part, Labour and Social Insurance Minister Marinos Mousiouttas described the discussion as constructive. He said he had presented AKEL’s leadership with the philosophy of the government proposal, the individual elements of the reform, its priorities and the overall cost.
Mr Mousiouttas said the reasons behind the choices included in the proposal had been explained, as well as why certain issues had not been included. He cited widows’ pensions for men as a characteristic example.
He noted that, despite differences on individual issues, there was a shared goal of improving the living standards of both current and future pensioners. “More could be done,” he said, while highlighting the existing financial constraints. “But the numbers are there and they are cold,” he said, adding that analysis of the financial data showed that the available room did not allow everything that the Government itself might wish to implement.
The Minister assured that dialogue would continue with AKEL, the other political parties and the social partners, with the aim of achieving the greatest possible convergence before the reform is submitted to Parliament. “The Social Insurance Fund is the Fund of previous generations, of us and of those to come, and we must safeguard it as the apple of our eye,” he said.
He added that, alongside the Fund’s sustainability, public finances must also be protected so that the economy can continue to support improvements in citizens’ living standards.
Finally, he said that information-sharing and dialogue with AKEL would continue, with the aim of hearing all views before the proposal is finalised.
Source: CNA