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Cyprus

Minority of state officials waive their pensions

Labour Minister Zeta Emilianidou

President Nicos Anastasiades and three members of his cabinet are among a tiny minority of state officials who have waived the state pensions they are entitled to.

Of the some 120 active state officials of pensionable age (60 years) who are eligible for both a salary and a pension for service in a previous post in the public sector, only seven have decided not to draw their pensions.

Since October 2014, active state officials have been receiving a salary and a pension for their prior service in the public sector.

In a ruling that month, the Supreme Court said civil servants called out of retirement to serve in a different position should get both their salary and their pension from the previous post. The court ruled that pensions are deemed private property, and as such protected under article 23 of the Constitution.

But since then, President Anastasiades along with three members of his cabinet – foreign minister Ioannis Kasoulides, labour minister Zeta Emilianidou and interior minister Socratis Hasikos – have opted out of their pensions, which they have been contributing to the First Lady’s Fund that helps pay for university studies abroad.

The First Lady’s Fund, which is subject to audit by the auditor-general, has so far been used to help finance the studies of around 330 disadvantaged college students.

According to daily Politis, the contributions by Anastasiades and his three ministers have to date – since October 2014 – generated savings of €129,700.

Though a positive gesture – but also good optics for the government – these savings are chump change when compared to the some €1.2 million a year it costs to pay full salaries and pensions to over 100 active state officials.

Also waiving their pensions are Attorney-general Costas Clerides (entitled to a pension as a former judge), and former EDEK MP Nicos Nicolaides, who had previously held a post in a semi-governmental organisation. Both are contributing their pensions directly to the treasury. This has generated additional savings of €99,300.

Lastly, former minister and former government spokesman Kypros Chrysostomides gave up his pension back in 2011, even before parliament passed a law seeking to abolish the simultaneous payment of salaries and pensions to active state officials.

Chrysostomides is currently managing partner in the  Dr K Chrysostomides law firm.

Politis reports that, currently, three deputies in the new parliament are entitled to an MP’s salary as well as to a pension. However, two of them – who wished to remain anonymous – are giving away their pensions to help certain poor families. The paper said it had seen wire transfers and copies of cheques corroborating this.

The issue of rationalising the payment of pensions to state officials resurfaced recently after it was proposed that savings generated on this item could help cover revenues lost from lowering and then scrapping Immovable Property Tax (IPT).

In a related issue, the offsetting of multiple pensions (one pension for service in the public sector, another for a stint as a state official) may also be under threat after it was challenged by a number of former state officials.

Six former state officials – including former Central Bank governor Afxentis Afxentiou and former health minister Dina Akkelidou – appealed against the offsetting rule. The case is being heard by the Administrative Court, and a ruling is expected soon.

Should the state lose this case as well, it will be called to make additional retroactive payments of €600,000 per year. This concerns payments to 38 affected individuals currently, although the number of individuals is expected to rise in time as more former civil servants are appointed to state offices.

 

 

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