Cyprus Mail

Bank early retirement beneficiaries also seeking unemployment benefit

Bank of Cyprus

Some 1,000 former bank employees who opted for early retirement are waiting for the attorney-general to rule on whether they’re also entitled to unemployment benefit, it appeared on Monday.

The employees in question had worked for Bank of Cyprus, Hellenic Bank and Alpha Bank. Having taken up early exit plans, offering generous compensation packages, they subsequently applied to the Social Insurance Fund for unemployment benefit.

But the ministry of labour – responsible for the Social Insurance Fund – put their applications on hold.

Labour Minister Kyriacos Koushos said the decision to pay unemployment benefit will depend on a legal opinion to be provided by the attorney-general. The opinion is expected soon.

For the time being the labour ministry relies on a recent court judgment, in a case where a private-sector employee had applied for unemployment benefit after taking an early retirement package. The person filed a suit after his application for the benefit was denied.

The court ruled against him, finding that he had been adequately compensated by his former employer.

For years, people in the banking sector taking early exit plans had received unemployment benefit for a period of six months. But apparently this was based on practice and custom, rather than on anything in writing.

The bank workers unions (Etyk) now argues that, regardless, this practice should prevail. It says that many people who opted for early retirement had done so precisely because they had counted on also getting unemployment benefit.

In addition, bank employees retiring early benefit from zero tax on their compensation for amounts up to €200,000.

Moreover, for two years they remain eligible for supplementary healthcare plans offered to bank union members. And they also remain eligible for low-interest home and student loans, per their employment contracts.

Additionally, they and their dependents enjoy insurance coverage from their banks for two years.


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