Government promises to sort out multiple pensions mess

The government on Monday pledged to bring legislation regulating the controversial matter of multiple pensions paid out to state officials, but wouldn’t commit to a timeline.

In parliament, finance ministry official Foulla Tryfonos said the government is positively disposed to regulations aimed at “restructuring and modernising” the framework governing the payment of pensions to state officials.

She told MPs the government will come back with a specific proposal for “a holistic approach” to the matter, taking into account the particularities of each type of state official.

The legislation will be drafted together with the attorney-general’s office to avoid any clashes with the constitution.

“The government cannot consent to, nor promote, any regulation if it’s likely to be unconstitutional in the attorney-general’s opinion,” Tryfonos said.

She was alluding to four bills drafted by MPs that concern the same. The issue regained traction after reveals that President Nikos Christodoulides and members of his cabinet continue receiving pensions for past service in the public sector while drawing a salary for their current jobs.

A representative of the attorney-general’s office cautioned that the bills tabled by MPs do not factor in previous court judgements. Any action depriving a state official of his or pension is deemed unconstitutional.

Likewise, a salary is considered an asset or personal property.

One of the legislative proposals provides for an offset between pensions and current earnings. This means that state officials, who previously retired from the public sector but are currently serving in another post, will receive their pension in full, plus another amount, so that the total monthly earnings do not exceed the salary of their current position.

To take a hypothetical example: a state official on a pension of €2,000 and a current minister’s salary of €5,000, would see his/her pension remain untouched at €2,000, but the salary would be cut to €3,000 – so that the total comes to €5,000.

On his part, auditor-general Odysseas Michaelides spoke of the need to “end the distortions” regarding the age at which ministers, mayors and MPs start receiving their pension. The age should be increased to 65 from 60 currently.

Michaelides also proposed suspending payment of pension to mayors and any official in the broader public sector – including judges, the attorney-general, the auditor-general and the state treasurer – where after retiring they undertake another public post or office in Cyprus or within an EU institution.

He further recommended the introduction of a ceiling on pensions where someone served in one or more offices in the Republic, so that the aggregated pension payouts do not exceed two-thirds of their highest earnings as the case may be.

The auditor-general argued that based on the Pensions (Certain Officials of the Republic) Law of 1980, the pensions of the president, the House speaker, ministers, junior ministers, MPs and generally of state officials are suspended if they undertake any other function or office in the Republic.

Michaelides recalled that in 2011 parliament had passed a law prohibiting the payment of multiple pensions to any state official – other than those listed in the 1980 law.

But in 2014 this law was found to be unconstitutional, on the grounds that pensions are a person’s property. However, the 1980 law itself has not been voided and is still in force.

The whole issue resurfaced when earlier this month it came out that the president failed to declare in his capital statement an early pension he receives from the foreign ministry on top of his presidential salary.

Although not illegal for a civil service employee to claim an early pension after being promoted to a government position, Christodoulides – unlike other ministers in his cabinet – failed to mention in his capital statement that he’s been getting €1,300 a month as an early pension from his time at the foreign ministry.

Christodoulides also took flak for not voluntarily foregoing the pension, as others were reported to have done.