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Our View: Public sector pensions need overhaul without delay

Synoikismos Liopetriou

Parliamentary spokesman of Akel Giorgos Loucaides wrote to the finance minister on Tuesday asking to know whether the government had any plans to submit a bill for regulating the issue of multiple pensions. The letter repeated Akel’s position that the matter should be resolved once and for all, without delay, by the government in a way that abolishes multiple pensions for state officials.

The political parties could not prepare such a law, “as this would entail increased dangers in relation to its constitutionality,” said Loucaides, reminding that in 2014 the Supreme Court had ruled the law abolishing multiple pensions, which was tabled by Disy leader Averof Neophytou unconstitutional. Bringing up the matter seven years later is indicative of the lack of the political will to deal with the matter.

What is astonishing in this matter is that the constitution protects the right of state officials to take a pension for every position they have held. There was a former minister, former permanent secretary and former central bank governor taking monthly pensions amounting to more than €10,000 and former permanent secretary, former minister and former MP taking more than €9,000 a month.

These are obscene amounts of money that resulted from top-ranked civil servants drafting pension laws that would give them the highest possible pensions. It is these same people who changed the law so that their pension was based on their last salary plus cost of living allowance, rather than the average of all their salaries; this resulted in public employees being given one or two promotions, a month before retirement, so they would receive a higher pension. And when working public employees received the annual pay rises negotiated by the unions so did the pensioners!

Is it any wonder that Cyprus is in the top ten countries in the world with the highest pensions in relation to pre-pensions earnings? The world average for this is 58.9 per cent but in Cyprus it is 83.6 per cent. And this is not because of the private sector pensioners but because of public employees. The multiple pensioners are not a threat to the social insurance fund – there are not that many – but they are an illustration of how senior officials and their union have been pillaging the state coffers for decades. This practice is constitutional.

The truth is the whole system of public sector pensions desperately needs to be overhauled and rationalised once and for all and without delay. This is a more pressing problem than the multiple pensioners but nobody dares touch it because the reaction by the beneficiaries would be too hostile.

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