Millions saved in Cyprus pension reform

The saga surrounding multiple pensions remains in limbo, as two bills navigate the corridors of power, scrutinized by the Presidential office, Cabinet, and Parliament. However, consensus remains elusive, with whispers of a deadlock between the two pivotal bodies. In an effort to untangle the impasse, the Ministry of Finance commissioned an economic study, offering two potential pathways. The first entails a shift in retirement age to 65, resulting in a 10.5% reduction in pension benefits' present value and a saving of €9.2 million. The second proposes a seismic shift, replacing conventional pensions with a one-time gratuity, yielding a staggering 75.5% reduction and a €66 million lifeline through immediate capital disbursement. Projections foresee reductions in benefits across the board, from the President to parliamentarians, with deputy ministers facing the most substantial cuts, up to 54% under Scenario 2.

The expedited disbursement of pension funds promises to be a fiscal boon, offering a reprieve of €66 million for the economy and taxpayers alike.

Turning to the beneficiaries, the controversy erupted following revelations by the "Truth" newspaper regarding undeclared pensions, notably Nikos Christodoulides' €1,300 pension while serving as Minister of Foreign Affairs since 2018. Currently, 129 officials enjoy pensions while holding salaried positions, spanning elected officials in the public sector, local governance, and beyond. An additional 62 former state officials luxuriate in multiple pensions, shrouded in secrecy regarding the sums received. Existing regulations extend the privilege of up to three pensions, including occupational, mayoral, parliamentary, and ministerial pensions, with access available from the age of 60. Ironically, some incumbents in both the Cabinet and Parliament also indulge in these pensionary perks.

The future trajectory of the pension conundrum remains uncertain, with two bills and proposals poised for post-election deliberations, with the aim of a pre-recess resolution, pending the concurrence of stakeholders such as the Legal Service and the auditor-general. The protracted delay and bureaucratic ping-pong underscore the challenges of ushering in modernization within the Cypriot public administration.

The reverberations extend to the European Parliament, where the ethical quandary of MEPs receiving dual pensions beckons. The MEPs' remuneration, subject to taxation and insurance contributions, stands at €7,853.89 post-deductions. Supplementing their salary are sessional compensations and office allowances. Of the six Cypriot MEPs, three boast a civil service background, entitling them to Cyprus pensions, though some opt to forgo or draw from alternative sources, sparing the state's coffers.

[This article was translated from its Greek original]