Cyprus Mail
Business Cyprus

Some to recoup losses from provident funds hit in 2013

The Treasury has said that it is now accepting applications from provident fund members who wish to benefit from a compensation scheme for losses they suffered in the 2013 banking crisis.

Eligible are those who were members of affected private sector provident and pension funds on March 26, 2013, when deposits at Bank of Cyprus and Cyprus Popular Bank, widely known as Laiki, were impaired, the Treasury said in a statement on its website.

The “maximum increased recoupment ratio” will not exceed 22.5 per cent of the uninsured deposits of the funds in both systemic lenders on the said date, so that the overall recoupment ratio will be up to 75 per cent of deposits attributed to each provident fund member, the Treasury added.

The scheme will take into account deposits that have not been impaired or have already been recouped by the government, as was the case with deposits at Laiki, and accounts for 52.5 per cent, the Treasury said, adding that the maximum recoupment amount is €100,000 per member.

In the case of members who left their job between March 26, 2013 and July 19, 2017, the recoupment cap is set at €250,000, it added. Beneficiaries of the scheme will receive the recoupment when they retire at age 65.

The council of ministers passed the scheme in July prompting complaints by bank workers union Etyk that it was insufficient. The updated scheme, approved by the cabinet in December, also failed to fully satisfy Etyk, whose members are the main beneficiaries of the scheme.

The government already made available €300m for this purpose in 2013 and pledged a further €168m in last July. The additional recoupment announced in December will cost taxpayers an additional €20m.

 

 

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