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Bank of Cyprus announces retirement scheme

The Bank of Cyprus (BoC) on Tuesday announced a voluntary retirement scheme but bank employee union ETYK said it was not enough and doomed to fail.

After days of negotiations, the stricken lender announced a scheme that aimed at convincing 1,000 plus employees to take early retirement.

The plan provides that those who opt out would receive a month’s salary for every two years of service, plus five monthly salaries.

The maximum amount of compensation will not exceed 60 per cent of the remaining salaries until normal retirement, the bank said in a statement.

Employees who choose to leave while the scheme was on the table — between July 8 and July 26 — will also continue to have medical and life insurance coverage until the end of 2014.

However, at least 50 per cent of an employee’s compensation must go towards any loans they may have.

Those leaving should also use their available holidays, if possible, by the last day of their departure.

BoC said it will not pay any outstanding holidays that exceed a month’s salary.

The last day of departure is July 31.

ETYK, which had not given its approval, described the plan as a provocation and accused the BoC board of backtracking.

The union was particularly angered by the fact that the scheme was based on the salaries after they were reduced by up to 30 per cent.

“There is no doubt that the specific decision is wrong and will possibly lead to a dead end,” the union said in a statement. “The specific scheme is

inadequate and our view is that colleagues who respond will not reach the target.”

ETYK said it was saddened because it wanted workers to be presented with an agreed plan, “which would have prospects of success.”

The union said it will convene on Wednesday to discuss the matter and take decisions.

It did warn however that it will not tolerate pressure or blackmail on workers to take accept the scheme.

Currently under administration, BoC is trying to find its footing following a Eurogroup decision in  March to close the island’s second-biggest bank, Laiki, and recapitalise BoC by raiding uninsured deposits – over €100,000.

The deal provided that BoC would absorb certain Laiki assets and its employees.

As a result it currently operates in Cyprus through 202 branches and with 5, 640 employees – 85 branches and 2,390 employees were transferred from Laiki.

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