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At a meeting of the Parliamentary Committee on Finance and Budget on 16.10.2023, the issue of multiple pensions and related Law Proposals of MPs A. Neophytou, N. Papadopoulos and S. Papadouris were discussed.
(a) Increase of the pension payment age to Ministers, Deputy Ministers, MPs and Mayors from 60 to 65 years of age.
(b) Introduction of a provision that a mayor and an employee of the wider public sector who after retirement takes up another public office or position in Cyprus or in an institution of the European Union, the payment of his/her pension shall be suspended.
Note: Such a provision for the suspension of the pension if they take up another office in the Republic already exists in the legislation for the President of the Republic, the Speaker of the Parliament, Ministers, Deputy Ministers and Members of Parliament. However, during the Session, it was found that this provision is not applied and therefore pensions are illegally paid to non-beneficiaries, an aspect on which an audit is underway by our Office.
(c) Introduction of a pension ceiling in case of service in more than one office or position in the Republic, so that the pension cumulatively from all offices and positions does not exceed the limit of 2/3 of the highest earnings.
Note: Such a provision already exists for the President of the Republic, the Speaker of the Parliament, Ministers, Deputy Ministers and Members of Parliament, but it applies only to multiple pensions from these offices, without counting pensions from service in the civil service or in a position of Mayor.
(d) Complete termination of the right of a public servant to receive a pension regardless of age limit because he or she will assume a public office or position incompatible with the position held. Currently this entitlement applies to pension accrued up to 31 December 2012. On the basis of the reasoning in paragraph 3 below, the distortion for the period before 31.12.2012 cannot be removed. Beneficiaries may voluntarily deposit this pension in the Permanent Fund.
At the above meeting of the Parliamentary Committee on Finance and Budget, we undertook to submit to the Committee, within one month, recommendations for appropriate legislation to remove these distortions. Subsequently, on 31.10.2023, the Auditor General had the opportunity to discuss the matter among other matters in a meeting with the Speaker of the House of Representatives, who instructed the Director General of the House to provide our Office with all possible assistance in this regard.
Our Service prepared texts for the amendment of six (6) relevant laws concerning pensions of state officials and civil servants in the public sector, which were forwarded to the Director General of the House of Representatives on 31.10.2023 for any comments and changes of a legislative nature.
In preparing the relevant texts of amending legislation we took into account that, as explained by the Supreme Court in Avgusti1, "the expectation of acquiring a claim to a pension, arising at the time of recruitment, constitutes, potentially, property and crystallises as a property right upon completion of pensionable service in a pensionable position".
Therefore, the only safe option is for distortions to be regulated in an absolute manner for pension earned after the date of commencement of the new legislation, but it should be given full respect and there should be no interference whatsoever for any pension earned on that date. It should be noted that a similar approach was followed in 2012 when civil servants' pensions were regulated and the cut-off date was set at 31.12.2012.
To this end, 1.1.2024 has been introduced as the cut-off date in the texts of the proposed legislation. If the legislation is passed at the beginning of 2024, the cut-off date should be 1.3.2024.
On the basis of the proposed texts:
(a) The pension earned by ministers, deputy ministers, deputy ministers, members of parliament and mayors from 1.1.2024 and thereafter will be paid at their 65th year of age (the pension earned before that date will be paid at their 60th year, as currently provided by law).
(b) Any person who retires from a public office or position after 1.1.2024 and assumes another public office or position in Cyprus or in an institution of the European Union, the payment of his/her pension earned after 1.1.2024 will be suspended.1.1.2024 in that office.
(c) A pension ceiling is introduced in case of service in more than one office or position in the Republic, so that the pension cumulatively from all offices and positions earned after 1.1.2024 shall not exceed the limit of 2/3 of the highest earnings.
(c) A pension ceiling is introduced in case of service in more than one office or position in the Republic, so that the pension cumulatively from all offices and positions earned after 1.1.2024 shall not exceed the limit of 2/3 of the highest earnings. Any pension previously earned shall not be affected and shall be paid in addition.
Indeed, despite the large volume of work, the House Services worked intensively on the texts of proposed legislation that we forwarded to them and yesterday returned the texts to us with legislative corrections. We would like to thank the President of the Parliament, the Director-General and the services of the Parliament for this assistance. We have adopted all their recommendations and today we have forwarded the texts to the Speaker of Parliament, with notification to the Minister of Finance so that the Government may also have the opportunity to assist in this effort.
The texts are attached hereto as Annexes I to VI.
It is our view that the House of Representatives, in exercising its sovereign power, can finally remove the distortions that are rightly considered a challenge by civil society.
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[1][1] Resolution dated. 18.4.2020 by the full Plenary of the Supreme Court in the case Cypriot Republic v. AUGUSTI et al., Appeals against Administrative Court Decision No. 177/18, et al. (http://www.cylaw.org/cgi-bin/open.pl?file=/apofaseis/aad/meros_3/2020/3-202004-177-18etc3Apof.htm )
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