THERE appears to be a disagreement between the government and international lenders over a provision concerning the calculation of civil service pensions that is set to change as part of the island’s bailout, lawmakers heard yesterday.
The sticking point is whether the new system of calculating pensions would be retroactive or if it will cover earnings after the date it comes into force – January 1, 2013.
The troika says the former, while a government bill says otherwise.
According to the memorandum on which the two sides agreed on principle, “pension benefits will be calculated on a pro-rata basis taking into account life-time service as of January 2013.”
Attorney-general Petros Clerides, who was present in the negotiations with international lenders, said that his understanding was that pension rights until December 12, 2012 were secure and that the new method would kick in after January 1 of the new year.
Under the current system, a civil servant’s pension is calculated on the basis of his last salary.
Clerides was adamant that this had been agreed with the troika.
“I will go to the president and submit my resignation,” he told the House finance committee. “I was there the moment it was agreed.”
A finance ministry official said an effort will be made to clarify the matter with the troika.
Committee chairman Nicolas Papadopoulos asked for the issue to be settled by Thursday when the bill will be put to the vote.
Civil service union PASYDY reiterated that certain provisions were unconstitutional.
Union boss Glafkos Hadjipetrou said civil servants were prepared to contribute as long as it was lawful, warning that there will be appeals to the Supreme Court.