FRESH REPORTS emerged yesterday of civil servants being bumped up immediately before retiring, thus allowing them to pocket a higher pension.
All people employed in the broader public sector receive two pension payouts on retirement; one from Social Security, to which they contribute 3.45 per cent of their gross income, compared to the 6.8 per cent paid by employees in the private sector; and a one-off tax-free bonus, which is calculated according to their last (highest) salary. The latter payout is also known as the ‘government pension’.
Daily Politis yesterday revealed a technical inspector at the Geological Survey Department was promoted on December 15, 2010 and retired less than a month later, on January 3, 2011.
Politis found that the technical inspector in question had been away from work on pre-retirement leave for a considerable period of time prior to her retirement, due to health reasons, which begs a valid question: if the employee was absent for a long stretch, on what basis did the department deem that she was worthy of a promotion?
Politis recently published a similar story involving two civil servants, again from the Geological Survey Department. They were both promoted on July 30, 2009, only to retire on August 1 of the same year.
This practice in the civil service, which lawmakers are looking to put a stop to, is evidently motivated by the desire to retire at the highest position possible, thus also maximising the pension.
As state finances feel the sting, the other major issue is the payment of multiple pensions to civil servants. Back in December, ruling AKEL backed out of a legislative proposal aimed at rationalising pension payouts for state employees – though it stopped short of outright abolishing multiple pensions.
Treasury Department data show that 820 people received three pensions in 2009 – two from the state for civil service positions held and one for old age.
The bill had two main provisions. First, any state employee who quits their job to take up another government post (such as a Commissioner) would have their government pension payments suspended for as long as they held the latter job; with payment resuming once they left that government job.
Secondly, under the proposal government pensions would be calculated according to the average of the last two years of service – a slight improvement compared to the existing scheme.
But the legislative proposal was put on hold after the Attorney-general advised that some of its provisions were unconstitutional. The Constitution guarantees the accrued rights of workers. The issue hinges on whether the method of calculating government pensions is to be considered an accrued right.
Earlier this week, the Finance Ministry announced it was working on a bill of its own to reform the pension system. Since a government bill takes precedence over a legislative proposal by parliament, the latter has been placed on the backburner for the time being.
Deputies have given the government about a month to come up with a paper. On Monday, Finance Minister Charilaos Stavrakis pledged to bring a bill to parliament before the House recess in May.
Greens MP George Perdikis said, however, that the deputies’ legislative proposal “remains on the table” and that both proposals would be discussed in tandem.
It is clear, however, that the government has taken up the baton and must now directly negotiate with PASYDY, the powerful civil servants union, which is fiercely opposed to talk of tampering with the pensions system.
And growing concerns over the viability of the Social Security Fund have to led to calls for greater contributions by civil servants.
With parliamentary elections looming in May, some politicians question the wisdom of attempting to overhaul the pension system. Already the signs of compromise are evident: it’s understood that the government plan will target the pensions only of the highest-paid civil servants.
“It’s not the right period to do the business,” said DISY deputy Christos Pourgourides. “If the government ends up with a watered-down version for fear of losing votes from PASYDY, it’s not worth it… better to wait until after the elections.”
DIKO MP Nicholas Papadopoulos said yesterday that current financial circumstances called for a paradigm shift with regard to workers’ accrued rights and collective agreements.
“One must adapt to the times,” Papadopoulos noted. “What kind of collective agreements are these that they are sacred, untouchable? Must we conform to these collective agreements until our economy goes bankrupt?”
