Bank employees’ union (Etyk) on Monday announced plans to distribute €25 million to former and current employees of the Bank of Cyprus who were union members in 2011.

This decision aims to partially cover the losses incurred due to the failure to allocate provisions from the provident fund during the conversion of retirement gratuities into provident funds.

In a statement, Etyk said that this is “one of several unresolved issues” stemming from the financial crisis and the haircut on provident funds.

These efforts, the union said, “aim to reduce costs and rectify injustices caused by the crisis”.

The union said that the responsibility for resolving these issues lies with the Bank of Cyprus for its employees, while for those previously employed by Laiki Bank, the obligation falls on the liquidator.

Etyk also mentioned that the Laiki liquidator has yet to fulfil their responsibility.

“A substantial amount is still owed to the affected colleagues, and we hope the liquidator will meet this obligation appropriately,” the union said.

Moreover, the €25 million allocated by Etyk will come from its own resources, including contributions from the Bank of Cyprus.

This partial relief is specifically targeted at members who were employees of the bank as of December 31, 2011.

According to Etyk, the funds aim to reduce the financial burden on affected employees caused by the improper handling of provident fund provisions.

Eligible recipients include retired, former, and active employees of the Bank of Cyprus who were Etyk members in 2011.

These members must have had at least one year of service with the bank but not more than 36 years by the end of 2011.

In addition, beneficiaries are required to confirm their details to receive their allocated amounts.

The process begins today, January 27, 2025, and will result in an increase to beneficiaries’ accounts, in addition to the provident fund’s returns of 21 per cent for 2023 and 22.17 per cent for 2024.

Etyk also reiterated its commitment to resolving other lingering issues from the bailout period.

One of these is the removal of the €250,000 compensation cap introduced by then-Finance Minister Harris Georgiades, which the union argued caused “significant injustice” to employees of both the Bank of Cyprus and the former Laiki Bank.

Etyk pointed out that the removal of this cap “was among the campaign promises of the president of the Republic” and stated that it is awaiting the constitutional court’s decision on the matter.

If the court does not rule in favour of the union, Etyk warned it would “intensify its pressure on the government to achieve a resolution“.

Additionally, the union is pursuing the implementation of the so-called “Hourican commitment,” referring to a promise made by former Bank of Cyprus CEO John Hourican to address losses suffered by employees’ provident funds during the 2013 bail-in.

Etyk confirmed that discussions are ongoing with both the Bank of Cyprus and the government and expressed optimism for a favourable outcome.

The resolution of these issues, Etyk said, could also be influenced by the constitutional court’s decision regarding the compensation cap.