PARLIAMENT yesterday unanimously approved a bill abolishing multiple pensions, which despite falling short of expectations, includes a provision that high-ranking officials from now on will finally have to make a monthly contribution towards their pensions.
Lawmakers passed the complex bill in under ten minutes, surprising observers who had expected a lively debate since parties on Tuesday had made it clear they had reserved the right to submit amendments to the draft that was given a preliminary green light at the House Finance Committee.
However, none of the MPs present chose to speak and it quickly transpired that it had all been settled during the party leaders’ meeting behind closed doors earlier in the day.
It was opposition DISY that had managed to include a provision for state officials such as ministers and deputies to contribute 6.8 per cent of their monthly earnings towards their pension for the first time ever.
This was interpreted as a message to civil servants who contribute around half of that amount towards their social insurance pension compared to workers in the private sector. Civil servants also contribute nothing towards their professional pension, which comes straight out of state coffers.
The new law does do away with the current practice that allows retired officials to go on receiving their pension if they were subsequently appointed to another public position.
From now on, payment of the first pension will be suspended and resume after the end of the official’s new term in public office.
The law provides that any official who has served in many public posts will no longer receive the multiple pensions. Instead, they will receive 50 per cent of the highest salary they were receiving while in office.
These 50 per cent applies to any public official who has served in more than one post.
Although for example if a retired deputy, was currently holding another official post, while he or she would lose the double pension privilege, the 50 per cent threshold would not apply to him or her.
Deputies pensions are governed under other laws. In the case of MPs, their pensions are set at three quarters if they serve one term and two thirds of the salary if they serve two terms. This privilege will be maintained. In other words, deputies are not really affected by the new law.
Neither does the new law apply to public servants who receive a ‘professional’ pension after having served in the civil or education service or in the broader state sector.
The changes effected with the law are not expected to go a long way in saving cash for the state either.
The figure mentioned in one of the discussions was around €1.0 million per year.
Speaking after the vote yesterday, DISY deputy chairman Averof Neophytou suggested that the multiple pensions matter had overshadowed other important issues like the need to reform the island’s unsustainable state pensions system.
“I think the unanimous decision … that state officials should contribute 6.8 per cent towards their pension sets a good example – a move that creates a better climate for the discussion of important matters regarding pensions,” Neophytou said after the vote. “This unanimous move sends a message to society that everyone, irrespective of position, should contribute.”
The law was the last act of parliament, which later dissolved ahead of the May 22 elections. It will resume on June 2.
