THE HOUSE Finance Committee began discussing reform of the state pension system on Monday but, from what was reported, it was evident ‘reform’ was too strong a word for what they planned to do. In fact, they prepared public opinion for half-baked measures, arguing this was a complex issue affected by a host of different laws and collective agreements impacting the livelihood of many people.
Akel deputies distanced themselves from the legislature’s efforts to draft its own legislation claiming they would wait for the government’s ow reform proposal, to be processed by the Attorney General’s office so there would be less chance it would have any loop-holes, they claimed.
Then again, President Christofias’ has pledged any reform would be the result of consensus, which would mean the government’s proposal would require approval by public servants’ union Pasydy. But Pasydy boss Glafcos Hadjipetrou has wasted no time in voicing objections to the touted changes, claiming the inalienable rights of his members would be violated.
Hadjipetrou has defended the practice whereby the state pension was determined by the last salary received by a public servant. Deputies had proposed the average salary of the last two years of service should be used to calculate the pension, because under the current system a public servant would be promoted a few days before retiring so he could receive a higher state pension. There is no moral justification for this practice as it exclusively aims at maximising the retiree’s earnings, at the taxpayer’s expense.
It is an institutionalised form of fraud, similar to the other fraudulent practice, whereby on retirement a public servant collected unemployment benefit for six months in addition to his pension. Promoting a public servant, a couple of days before retirement, deceives both the state and the taxpayer who foots the bill for a higher pension, thanks to a fraudulent administrative decision.
In countries with rule of law and a developed sense of social justice, a state pension is based on the total earnings/contributions of an employee. In Cyprus, public servants do not contribute towards their pension, making the last salary system even more scandalous.
As for Hadjipetrou’s argument that basing a pension on the last salary was part of the collective agreement, it means nothing. Should a provision of a collective agreement stipulating fraudulently taking money from the state be respected? And even if there were no last minute promotion, why should the last salary determine a pension normally based on years of service? If the parties and the government are serious about reform of the pension system, they should address all these questions.
