Retire early and take home six-figure sum

DESPITE repeated admonishments by the auditor-general, the telecommunications authority (CyTA) continues to give generous bonuses to employees who choose to retire early, lawmakers heard yesterday.

The rules, passed in 1982 and still in effect today, allow compensation for early retirement that includes the total of wages the employee would have received until retirement – in cash and duty free – on top of their pension.

“One would be crazy not to take all wages until retirement and not work,” Chrystalla Yorkadji told the House Oversight Committee.

Such a compensation, would only be justified if the employee who retired under these conditions not only has no positive contribution but their presence also causes financial damage to the organisation, the auditor-general said in her report.

In 2002 CyTA’s board put a cap on maximum compensation – 85 percent of the difference between the salary the employee would have received upon retirement and the pension they will get until then.

This practice has been followed by the semi-governmental organisation since 2002 but the 1982 rule is still in effect and “its use cannot be ruled out as it happened in 2007 in the case of the former senior executive director,” Yorkadji’s report said.

“I have been saying it for ten years in my reports but it seems there is consent in order to increase pension benefits,” Yorkadji said.

Another big semi-governmental organisation, the Electricity Authority of Cyprus, has placed a €50,000 cap on compensation for early retirement.

The retirement compensation paid by CyTA in 2008 ranged from €19,530 to €173,469 with an average of €108,714 per employee.

That means 14 employees received €1.52 million.

Seven hundred employees have retired early since 1982, taking home some €35 million.

The 1982 rules were passed with the aim of providing a ‘motive’ for employees who wanted to get out.

In her report, Yorkadji stressed that since there is an alternative retirement scheme in the pipeline the 1982 plan was not justified “at least under its current shape, without criteria.”

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