Govt proposes raising pension age for state officials

The government on Wednesday approved a bill which will raise state officials’ pension age from 60 to 65.

The bill passed through cabinet and will now be sent to parliament for ratification and will impact the pensions of a raft of state officials.

The roles impacted by the change include those of the President, MPs, district governors, mayors, ministers, deputy ministers, and the government spokesman.

In addition to the bill which would raise state officials’ pension age, the government also proposed a bill which would, if passed, allow them to waive their right to pensions related to their roles.

State officials would, under the proposed law, be able to submit a declaration of renunciation to the finance ministry, foregoing a pension related to the role in which they had served.

The two bills come amid efforts to streamline state officials’ pensions, with the finance ministry having earlier this year said it was aiming to entirely abolish the practice of paying multiple pensions to government officials.

Finance Minister Makis Keravnos had said in April the government was “determined to continue this effort, always within the confines of the law, to abolish multiple pensions.”

He was keen to stress that the planned replacement for them must be “legally enshrined”, so as to avoid the possibility of proposals not being able to be implemented.

Reports had surfaced that a “gratuity payment” would be handed out to government officials as a replacement for the multiple pensions, but a source from the finance ministry told the Cyprus Mail that while an equivalent payment would be made, “it would be wrong to call it a gratuity”.

“This is not a gratuity, and it is not a ‘tip’. It is a lump sum one-time payment which will be paid instead of the multiple pensions currently being paid to government officials,” the source said.

At present, high-level government positions come equipped with their own lifetime guaranteed pensions, which are paid monthly to people who have held such posts once they reach the age of 60.

This, as the source explained, “leads to some people, who have maybe been in parliament, or been House President, or been a minister, and had a high-level civil service role, or been President of the Republic, picking up four, or five, or even six pensions.”

While the source was sure that the new system would save the government money in the long run, they said the formula has not yet been drawn up to decide how much recipients would be paid.

They added, “our goal is to see how we can do this while staying on the right side of the law.”

The constitution plays an emanant role in discussions surrounding multiple pensions, as it is constitutionally stipulated that various high-level government roles, including the titles of President, minister, and House president, bring with them a separate pension.

“We are trying to not provoke people, because the current system is provocative for ordinary working people who work all their lives to receive a state pension and see ministers and MPs and Presidents pick up multiple salaries and €25,000 a month,” the source said.

However, the audit office argued that the government “does not wish to solve the problem”.

“It is interesting that today the government and the legal service will explain to political parties why they are rejecting our recommendations in our absence and without any consultation whatsoever with us,” they had said,

They said the raising of the pension age is “unconstitutional” both for officials who have already left their posts and for those who are still working “for the portion of their pension they will have hedged by the time the law changes.”