Cyprus Mail

House passes law incentivising early retirement in public sector

Photo: (PIO)

The House of Representatives passed a bill on Friday, giving incentives to public-sector employees to apply for early retirement without any reduction in their benefits, negating the January 2013 law forcing them to take a reduction.

The ruling Disy-backed bill was passed by 32 MPs, and applicants who qualify will have the ability to apply for early retirement within 45 days of the day the bill comes into effect.

In a report from the house finance committee about the specific bill, an expert found up to 4,088 employees meet the early retirement criteria, of which 1,175 are teachers and the other 2,913 in various public sector jobs.

The expert also reported to the committee the total cost of paying these individuals, if they all chose to retire, will cost €50 million, while the state is expected to save €107 million in relation to their salaries and contributions.  The expert also wrote that the plan would allow for more positions in the public sector to be opened.

The government’s plan was to change the pension scheme,for public sector workers hired after 2013, by introducing the concept of worker’s monthly contribution, which did not previously exist in the public sector. However, this is also under dispute with public sector unions considering ‘dynamic measures’ as a way to pressure the government to revert to previous practice.

The new law passes on Friday, applies to public sector employees who will either have five more years to go until their mandatory retirement age, or who will have completed 400 months of pensionable service by August 31 of this year.

Under the proposal, eligible civil servants will have a 45-day window in which to apply for the specific early retirement plan. If they do, they will be spared a 12 per cent deduction on pension benefits that normally applies for services rendered since January 1, 2013.

In short, the individuals concerned would get their full retirement benefits if they opt in for this scheme.

Related Posts

First-ever Cyprus elections in 1959 were fractious and rushed

Elias Hazou

Small quake off Paralimni

Nick Theodoulou

Growing democracy: a history of the presidential elections

Kyriacos Iacovides

Presidential elections 2023 – Live

Staff Reporter

Voter turnout remained higher than 2018 at noon, polls reopen (Update 1)

Nick Theodoulou

Cyprus tourism revenue nears pre-pandemic levels

Kyriacos Nicolaou