Cyprus Mail

Etyk says provident fund compensation lacks compared to public sector pensions

By Stelios Orphanides

Bank workers’ union Etyk has criticised the government’s decision to cap compensation to members of provident funds for losses sustained in the 2013 banking crisis at €100,000, arguing that they are still worse off than the public sector’s “golden boys”.

The members of provident funds at Cypriot banks are discriminated against by the government which shows “selective sensitivity” for civil servants, workers at state-owned corporations and deputies and ministers, Etyk said in a strongly- worded statement on Monday.

“Should the government not reconsider its decision, we shall then call upon Etyk’s competent bodies and we will not hesitate to take all necessary decisions to safeguard the rights of our colleagues that are grossly violated and fight with any means the injustice done to us,” Etyk said. “The people, and in particular the bank workers and their families, must criticise them publicly and, when the time comes, with their vote,” the union said.

Etyk added that it requested meetings with all parties to discuss the matter.

The union, which is notorious for its belligerent rhetoric and practices, is angered by the government’s decision less than two weeks ago to approve a €166m scheme to compensate members of provident funds with up to €100,000 each for losses suffered in the March 2013 banking crisis. As part of Cyprus’s bailout agreement, depositors lost all their deposits in excess of €100,000 at Cyprus Popular Bank while those at Bank of Cyprus saw almost half of their uninsured deposits converted to equity.

The government initially compensated provident funds with a €302m scheme and pledged to provide additional compensation in the future. This came in the form of the scheme approved by the cabinet on July 19. Finance minister Harris Georgiades said that the decision to include a €100,000 cap in the scheme, equivalent to amount of deposits guaranteed by the state, had to do with avoiding discriminating against other depositors. With the new scheme which will allow members to receive a lump sum upon retirement over the coming years, provident funds are compensated to 75 per cent of their losses.
The government fully covers deficits in the pension funds of state telecom Cyta which extends pension benefits in excess of €100,000 to beneficiaries, pays out pensions to civil servants of up to €4,000 and lump sums upon retirement of up to €1m, and more than €500,000 to deputies and ministers after completing two terms, Etyk said.

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