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Cyprus

Details released of returned funds from 2013 haircut

The details of the plan to reimburse the members of provident funds of private companies that suffered losses on uninsured deposits following the March 2013 Eurogroup decisions were unveiled by the finance ministry on Wednesday.

The measure was decided by the cabinet last month.

According to the plan, eligible recipients of the reimbursement will be allowed up to 75 per cent of the sum they would have received if their fund had not been haircut.

The reimbursement applies to all members of private-sector provident funds that suffered losses following the haircut on deposits over 100,000 euros on March 26, 2013.

Reimbursement will be calculated on the basis of each member’s share in the fund on the date uninsured deposits were seized.

In determining the amount to be reimbursed, the government will take into consideration any deposits not seized or partially reimbursed by the state to each individual, as in the case of funds with deposits at now-defunct Laiki Bank, placing a cap on total reimbursement of €100,000.

The money, it was announced, will be available in lump-sum payments to each provident fund member on retirement, i.e. at 65 years of age.

Eligible fund members older than 65 will receive the reimbursement when the scheme starts.

Deceased members’ legal heirs will be able to apply for the reimbursement.

Reimbursement, the ministry’s statement said, is conditional upon the return to the state, by the funds, of the number of shares in the Bank of Cyprus that corresponds to the sums to be returned.

All haircut depositors of the Bank of Cyprus, including provident funds, were granted stock in the lender as compensation for their seized deposits.

The process of application for eligible members and data submission by funds will be announced by the state treasury in September, the statement said.

 

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