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Cyprus

European court rules against Cyprus in pensions dispute

Cyprus violates EU laws because it has not repealed with retroactive effect, from 1 May 2004, an age criterion in the pensions law which deters workers from leaving their state to work in another Member State, the European Court of Justice has ruled.

This results in unequal treatment between migrant workers, including those who work in the institutions of the European Union or another international body, and state officials who have engaged in activity only in Cyprus.

Cyprus was taken to court by the European Commission in November 2014 over article 27 of the Law on Pensions.

According to the Commission, the article introduces a difference in treatment between officials of the national administration and officials who work in another member state in international bodies, or in the EU, since only workers who have engaged in activity exclusively in Cyprus can, in the event of release from the public service, make use of Articles 24 and 25 of the Law on Pensions and retain their pension rights, even if they do not fulfil the age criterion of 45 or 48 years.

“On the other hand, workers who have exercised their right to freedom of movement do not have the possibility of relying on those articles, with the consequence of loss of their pension rights,” the Commission said.

The article also impedes the free movement of workers because it denies workers the potential of relying on aggregation of all insurance periods and does not guarantee migrant workers a unified career for social security purposes.

Application of the Law on Pensions means that an official who resigns voluntarily from the island’s public service to work in another member state in international bodies, and who does not fulfil the age criterion of having reached 45 or 48 years as the case may be, receives only the lump sum and loses the pension rights, even if they have completed the minimum period of insurance of five years.

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