Pensioners demonstrated in Nicosia on Tuesday in protest against what they described as government indifference to their plight. Their organisation, Ekysy, said the government had not done anything to protect them at a time of rampant inflation, which affects those with low incomes the most.
It was a perfectly understandable protest as there are people on very low pensions, slightly higher than the minimum guaranteed income, struggling to make ends meet, as prices of everything rise.
There are no quick fix solutions to the problem however, as the government cannot order an increase in pensions just like that. What is needed is radical reform of the state pension system to ensure that payment are more equitable instead of being heavily weighted in favour of public employees, including deputies, who until 10 years ago did not contribute a cent from their monthly salary to the social insurance fund.
We ended up with state pension system in which those who paid nothing to the social insurance fund received the highest pensions (high earners who made big monthly contributions to the social insurance fund in their working life, ended with much lower pensions than those received by public employees.)
In theory, the state paid the contribution of public employees, but in effect it did not, hence its debt of several billion euro to the social insurance fund. This was not the only irregularity. Public employees’ pensions were further boosted by, unjustifiably, being based on the last salary, rather than on average career earnings. It was legalised theft of the social insurance fund, which was paying higher monthly pensions than it had to, until a few years ago. Should we also mention how a monthly pension continues to be paid in full to the partner of the public employee after he or she has died? Why is it not halved?
These are just a few of the inequities of the pension system, with its built-in bias towards public employees, that need to be addressed. We doubt this will ever happen, given that deputies are among the beneficiaries of this staggering, legalised discrimination against private sector workers. They did not have to contribute and voted themselves generous pensions, after only serving one five-year term in parliament.
It is doubtful the politicians would consent to reform and rationalise a pension scheme that pays them a full state pension for an absolute minimum of work. And they would be under immense pressure from Pasydy and other unions to protect the ‘rights’ of public employees.
It is these powerful interests the protesting pensioners would have to fight against to secure the reform that would lead to an increase of the lowest pensions. But they will need much more than the dynamic measures they have threatened to win this battle.