Cyprus remains third largest country in the eurozone by number of pension funds, despite a 30% decline, over the past five years, data published by the Central Bank of Cyprus on Friday show.
CBC has issued for the first time the Pension fund statistics for 2025. The statistical release provides an overview of the main developments in the assets and liabilities of pension funds resident in Cyprus and useful information on the number of pension funds, as well as their members.
According to the report, there were fewer than 600 pension funds in Cyprus, down by more than 30% following the implementation of the Law on Occupational Retirement Provision.
However, the country remains the euro area’s third-largest by number of pension funds, behind Ireland and Spain, and ranks at the lower end in terms of average assets per fund (less than pound 10 million) among the euro-area countries, indicating a persistently fragmented sector.
CBC noted that the pension landscape is dominated by defined contribution schemes, as opposed to defined benefit schemes, which account for over 80% of pension funds, reflecting lower costs and reduced risk for employers.
The investment composition of pension funds remains focused on traditional asset classes, however, there are signs of gradual diversification, which may support higher returns, albeit with increased volatility.
Pension funds in Cyprus exhibit relative resilience, contributing to the sector’s stability and supporting the long-term sustainability of pension benefits. However, approximately 20% of the total value of defined benefit schemes is estimated to be underfunded.
CBC noted that pension entitlements remain significantly higher in defined benefit schemes, reflecting their design to provide predetermined income levels, with risks largely borne by employers.
“As pension entitlements continue to grow, greater emphasis on cost transparency, fee awareness, and financial literacy becomes increasingly important to safeguard retirement outcomes,” CBC highlighted.
Against this backdrop, CBC stressed that the absence of an independent and unified supervisory authority for pensions remains a key institutional gap in Cyprus. “Establishing a single supervisory framework would strengthen confidence in long-term savings, enhance oversight, and support the resilience and sustainability of the pension system amid demographic ageing and evolving market conditions,” CBC concluded.