Cabinet approves amendments to Social Security Fund

AMENDMENTS to ensure the viability of the Social Security Fund (SSF) for the next 50 years were yesterday approved by the Cabinet.

Speaking to reporters following the ministers’ meeting, Government Spokesman Stefanos Stefanou said the bill proposed socially balanced solutions which were as much as possible a compromise.

A basic provision of the bill is a five-yearly increase in Social Security Fund contributions by 1.3 per cent to be paid in seven instalments, in other words spanning 35 years, he said.

Stefanou said the 1.3 per cent increase would be divided among social partners: 0.5 per cent by employers, 0.5 per cent by workers and 0.3 per cent by the state.

The government spokesman said the bill had been drawn up following talks between the Labour Ministry and other interested parties. The bill had been approved by the Cabinet and would go before the plenum for final approval. Its intention is to ensure the SSF’s viability for the next half century.

The Fund’s viability in Cyprus – as in other developed countries – has been adversely affected by the island’s low birth rate and increasing life span, meaning the population is ageing and eventually more will be needed from the government’s pension scheme than is being put in.

Stefanou said the bill’s provisions were drawn up following discussions and agreements with the Workers’ Advisory Body.

Nevertheless he said the amended law did not include increasing the retirement age, although it had been discussed as part of social dialogues.

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