By Angelos Anastasiou
The Cyprus Telecommunications Authority’s (CyTA) pension fund, which has suffered losses of €209 million since 2013, will be taken over by the government post-privatisation, officials said on Tuesday.
The fund’s assets have suffered a 33 per cent loss in value over the last three years largely because of the wiping out of all deposits in now-defunct Laiki Bank, the haircut on half of the fund’s deposits in Bank of Cyprus, depressed returns on corporate bonds, falling property prices, and a recent spike in voluntary exits.
“The government will guarantee and take over administration of the pension fund after privatisation,” trade union EPOET head Elias Demetriou told the Cyprus Mail.
In a memo to its members, EPOET said finance minister Harris Georgiades had confirmed this in a recent meeting with union reps.
Denationalisation of the semi-state is due to be concluded by the end of 2016.
“Although it is not yet clear to what extent CyTA will cover the loss of value in the pension fund’s assets, it has already pledged a sum between €18 and €20 million for this year,” Demetriou said.
“Aside from this arrangement, the rest remains under negotiation.”
“The main goal is for comprehensive solutions to be reached that will eradicate the likelihood of new trouble,” EPOET said.
The pension fund gained notoriety in 2013 when it was revealed that former administrative committee members had abused their position to invest in a construction complex in Dromolaxia, Larnaca, at inflated prices.
The ensuing trial saw two former CyTA board members and a trade union leader imprisoned for the scandal, serving terms from three to nine years each.
The ‘Dromolaxia’ scandal has been estimated to have incurred over €10 million in losses for the fund.