By Angelos Anastasiou
Approximately half of 11 projects in which the Cyprus Telecommunications Authority’s employee pension fund has invested have been audited, with the rest slated for completion by the end of July, its board chairman Christos Patsalides told the fund’s inaugural general assembly on Tuesday.
“The employees will learn the truth regarding these investments in property, and those found responsible will be held accountable,” he said.
Presenting the fund’s results, Patsalides, who is also ex officio chairman of the pension fund’s managing committee, cited an actuarial study as of year-end 2014, which found a €160 million deficit and €573.9 million in assets held.
The findings of the study, he said, will be forwarded to the Legal Service and the Auditor General’s office.
He added that legal houses have been commissioned for the evaluation of each agreement entered by the fund for the purchase of property and the funding of land-development projects.
“The findings and opinions of the internal audit department and the legal houses commissioned will be examined with a view to taking legal measures by the fund itself, or by CyTA, against anyone who may have hurt the interests of the fund,” he said.
According to Patsalides, the primary focus of the managing committee is the effective management of the fund’s current situation and asset holdings towards the protection of its members’ interests, and added that as a first step the committee had all property-related investments valued.
On a different front, CyTA’s board chairman said that the fund’s financial statements for the past three years, which had been pending by previous management committees, have been finalised.
“[Previous fund managers] had not been able to adequately explain points raised by auditors,” he said.
With regard to the €160 million deficit identified by the actuarial study, Patsalides said that CyTA’s board and the fund management committee worked out a 10-year repayment schedule, noting that “a large portion of the deficit is the result of the unusually low interest rates”.
“When interest rates rebound, as is expected, the deficit will be shrunk, or even eliminated,” he argued.
“The first instalment of about €17 million will be paid immediately, and the issue of repayment of the deficit will be re-examined if and when necessary – for example, in the case of movement on the issue of privatisation.”
The fund’s manager announced that, with the help of fund advisors, asset managers for future investments have been selected.
He added that, through careful and sensible decisions, the management committee has started to roll over the fund’s assets, currently comprising mostly cash and property, to various asset classes per the fund’s investment guidelines, and noted that within three years the fund will be fully compliant with the guidelines.
Patsalides noted that consultants have been commissioned to draft a code of corporate governance, internal regulations, and procedures governing the fund’s operation, while control processes for monitoring daily cash outflows have already been introduced.
The fund’s website has also become operational, so that fund members can be informed.