Reforming Multiple Pensions: Disy and Diko’s Joint Proposal
In a significant move towards pension reform, political parties Disy and Diko have presented a joint proposal that could change the landscape for government officials receiving multiple pensions. This initiative aims to address the long-standing issue of public office holders accruing several state pensions, a topic that has sparked debate across Cyprus.
Under the new proposal, individuals appointed or elected to public office, which includes a pension, would have the option to renounce their state pension while serving. The renouncement must be communicated to the finance minister immediately upon taking office or within a 15-day window. Once their term concludes, the official’s state pension payments would recommence.
If an official opts not to renounce their pension, the finance minister is mandated to report this decision to the House of Representatives. Moreover, officials retain the flexibility to reverse their renouncement at any point, notifying the finance minister who would then inform the House.
The proposal emerged shortly after Finance Minister Makis Keravnos called for a “productive meeting” on the issue. The government’s stance is to substitute extra pensions with a single lump sum payment, a suggestion that has been legally vetted and advised upon by the attorney-general. Keravnos highlighted that this is the first time in over four decades that concrete measures have been proposed to tackle this issue.
However, the audit service has expressed skepticism about the government’s approach, questioning its commitment to resolving the problem and labeling parts of the proposal as “unconstitutional.” This refers specifically to increasing the pension age for current and former officials based on their accrued pension at the time of law changes.
The constitution remains a pivotal element in this debate, as it guarantees separate pensions for high-ranking roles such as President, minister, and House president. Amending the constitution is not feasible without the consent of the Turkish Cypriot community, which has been disconnected from the Republic of Cyprus’s government since 1963.
The finance ministry previously disclosed concerns over individuals receiving up to six pensions under the current system, indicating a pressing need for reform. As discussions continue, the fate of UK pensions in Cyprus remains a topic of interest for both officials and citizens alike.
