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Cyprus

Nicolaides EAC pay bump ‘illegal’ auditor says

A pension bump awarded to Limassol mayor Nicos Nicolaides in 2008 by the board of the Electricity Authority of Cyprus (EAC), a job with which he had left to become transport minister for the newly-elected Demetris Christofias administration, was given illegally and any money paid should be returned to state coffers, auditor-general Odysseas Michaelides said in a draft report.

According to a report by daily Politis, Michaelides found that the board’s decision to promote the departing Nicolaides to a higher pay-scale “for purposes of calculating pension payments only”, as well as increase the period of his employment by 75 months – from 325 to 400, again bumping up his pension – “unacceptable and illegal”.

The finding is part of the Audit Service’s draft 2016 report for the state power company, which must now offer any comments it has on the issue, to be incorporated into the final report.

According to the draft report, the board made the decisions on March 18, 2008, on grounds of a 1997 regulation that allowed it to grant pension bumps to employees departing to assume public office “as much added pension as it considers just and proper”.

“Our service believes that the decision of the authority’s board is unacceptable and illegal, since it violates article 7 of the aforementioned regulations, according to which pensions are calculated based on the employee’s last salary before retirement,” Michaelides said.

“Our service recommends the immediate recalculation of the employee’s pension, based on his last salary before retirement, and the recovery of any amount illegally paid.”

However, the auditor-general conceded, an opinion from the EAC’s legal advisers should be sought first, since it has already been nine years since the decision.

Michaelides also noted that a 2011 amendment cancelled the regulations in question and replaced them with a rule that “pension and bonus calculations for civil servants do not take into account any added time of service”.

A spokesperson for the EAC said the utility had no comment at this time.

Nicolaides made headlines in 2015, when, as Edek MP, he pledged to pay his minister’s pension into the newly-created Social Support Fund, chaired by First Lady Andri Anastasiades.

Earlier this week, it was revealed he would be paying both his state pensions – from his stints as minister and MP – to the Limassol municipality for “social welfare and cultural events”.

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