AN AMOUNT close to €180 million was wiped off the CyTA employees’ pension fund between 2009 and 2013 because of bad investments, said the Auditor-general’s report for 2015. If the investments before this period were also included, the losses would total €196 million. The above amount also included the €29 million squandered on the Dromolaxia scam which led to the imprisonment of a former CyTA chairman, an AKEL official and a couple of union representatives.
A big Nicosia law firm has been hired by CyTA to try to recover some of the amounts through the courts and 11 cases were submitted to the Attorney-general’s office for investigation. Zacharias Koulias, the chairman of the House watchdog committee which discussed the report last week, said this constituted “looting of the fund” and said he hoped the “legal service would at least hire criminal investigators to look into the crime.”
The real crime, however, the crime which facilitated the looting and gross mismanagement of the fund is the scandalous arrangement that obliges CyTA to cover any losses incurred by its staff pension fund. The company will now have to cover the loss by annual instalments of €18 million over 10 years. Coming to such an arrangement was the real crime, as it was licence to those running the pension fund to steal, make reckless investments and, if they chose to, even gamble the fund’s money at the casino.
They never lost because the ‘profit-making SGO’, as the populist parties like to call it, would cover the losses. If there was no such arrangement and CyTA’s retirees suffered cuts to their monthly pension because of bad investments the fund might have been managed with a modicum of responsibility and honesty. Thanks to the collective stupidity of the political appointees of CyTA boards that are in cahoots with the unions, the pension fund management committee is encouraged to be as wasteful as it likes with workers’ money; it could even invest in a Ponzi scheme if it chose to as the organisation would pick up the bill.
The plundering of SGOs by their overpaid workers and party appointees on their boards takes many different forms. One thing is clear – the organisations are not run like businesses or as public organisations but as workers’ co-operatives. They primarily exist to ensure their workers receive maximum rewards for minimum effort and unjustifiably high pensions towards which employees make minimal contribution.
As for the political parties, they write up members by acting as recruitment agents of the SGOs. It is the business model that led to the collapse of Cyprus Airways, a fate that will eventually be suffered by the ‘profit-making’ workers’ co-operatives as well. But the opposition parties would rather this happened than consent to privatisation.