By Peter Stevenson
Hundreds of civil servants have taken early retirement in the first six months of this year as the workload increases due to a public service hiring freeze and due to economic uncertainty.
Two years ago the number of retirements came to 1,134, costing the state €122 million while last year that number rose to 1,237 retirements at a cost of €180 million.
A total of 648 civil servants have retired in 2013 so far with 558 of those being early retirements.
The increasing numbers of early retirements are due to a number of reasons, including increased workload and Cyprus’ financial uncertainty according to chief accountant at the treasury, Louis Droushiotis.
“The older civil servants are seeing the amount of work they are required to do increase, their salaries taking a cut and potentially getting more cuts, without any chance of new recruits to relieve the burden of more work so they are choosing to retire early,” he said.
There are fears that the increasing tendency of early retirement could adversely affect state coffers but Droushiotis said he felt that if tax collection happens in a timely manner that the treasury should not have any problems paying-off any early retirees.
“Along with punctual tax collection the fact that early retirees receive less pension than those who do not leave early means that the amounts going out are compensated somewhat and the impact on the treasury is less,” he explained.
Droushiotis explained that if Cyprus meets all of the requirements set by the troika, the money the state will receive from international lenders should be enough to cover the costs of any early retirements despite an increase over the last two years.
He added that the government would be able to reach the goal of reducing the number of civil servants by 4,500 by 2016 without having to make any more additional lay-offs if retirements continue at the current rate.
The chief accountant revealed that retirement bonuses are usually paid immediately as employees submit their paperwork before their retirement date.
“Each case is examined separately and as long as we have clearance from the Inland Revenue Department that the government is not owed any money then we proceed in making the payments as early as possible,” Droushiotis said.