Tied are the hands of the state regarding the abolition of multiple pensions for existing state officials, as there is no legal and constitutionally acceptable way to put a stop to this phenomenon that angers society.
This is emphasised in the letter forwarded by the Legal Service to the Ministry of Finance, responding to questions posed by party representatives in the first face-to-face meeting with the Minister of Finance, Makis Keravnos, with party executives during the consultation held for the two government bills.
It is reminded that according to the bills, pensions for state officials will be paid at the age of 65 instead of the current 60, while multiple pensions are replaced by lump-sum allowances.
At noon, the two sides will meet again in an attempt to find a formula that satisfies everyone. In the second meeting of parties and the Minister of Finance, the Audit Office may also be represented. Yesterday, the parties received the responses of the Legal Service to the questions they had submitted during the first meeting.
For the next ones, the regulation will apply
According to the highest-ranking lawyer of the Republic, Elena Symeonidou, no legislative regulation has been found for the abolition of multiple pensions for existing officials in a way that leaves no room for legal questioning of the constitutionality of the provisions, taking into account a previous court decision.
As highlighted in the letter, the government bill for the payment of a gratuity to officials aims to eliminate the phenomenon of multiple pensions in future situations (i.e. for future officials), as the gratuity will be a lump sum, which will also be proportional to the duration of the official’s service.
In this way, the state treasury will not be committed to long-term pension payments, considering that some officials will serve only one term or even less in their position.
For the pension at 65
At the same time, the Legal Service responds to the reservations of the parties and the Audit Office that the payment of the pension at the age of 65 for serving officials, instead of the current 60, is unconstitutional.
According to the Legal Service, extending the retirement age for existing officials does not contain elements of unconstitutionality since the person entitled to future pension has not completed their term, and therefore the right has not crystallised.
“The determination of the retirement age may give a simple expectation, but even this is subject to the general principle that there is the possibility of new regulations that may affect it,” it is emphasised.
For those who have not reached 60
Contrarily, regarding former officials who have completed their term and whose pension payment will start at the age of 60, the change to 65 may be considered to affect the vested right to a pension, which crystallised with the end of their term.
“For this reason, to avoid any legal disputes, the outcome of which is uncertain, I believe it is preferable in the bill to modify the regulation of the age limit differentiation for this group, so that for officials who have left their position before the commencement of the (new) Pension Law for State Officials, the relevant legislative framework that was in force on the date of their departure from the position continues to apply concerning the commencement date of the pension payment.”
The Legal Service indicates that the bills have been checked for compliance with the Constitution; however, it stresses that if new regulations emerge during consultations, the differentiated texts will be re-examined.
Rejection of Odysseas’ proposals
Legal and constitutional issues seem to be faced by, according to the Legal Service, the legislative regulations prepared by the Audit Office for the complex issue of multiple pensions, which have been forwarded to the Parliament for possible utilization.
The Legal Service, through its letter to the Ministry of Finance, proceeded with a general legal analysis of the proposals, without, however, preceding a legal examination.
Regarding the proposal of the Audit Office for regulation of pension payment in two ways for active officials, the Legal Service emphasises that the proposal maintains the legislative regulations as they currently stand today for the service of officials before 31st December 2023 and for their service after 1st January 2024, the pension will be paid at the age of 65, unless the retiree takes another position, in which case the pension payment will be suspended.
As the Legal Service points out, this specific regulation proposed by the Audit Office considers that the knowledge of the official about this regulation will eliminate any constitutional issues and the suspension of pensions or the inclusion of pensions can be legally done.
“However, this regulation does not eliminate the constitutional problems of the decision Koutsellis and Avgousti, since the active official at a later time, after 1st January 2024, will have crystallized the right to a pension, which they are entitled to and cannot be suspended or aggregated with other pensions,” it underscores. Moreover, it emphasises that the proposal should not take into account the tenure in a position in the European Union, as the MEP is not paid by the Republic of Cyprus.
Regarding the second proposal of the Audit Office, with which the pension of a state employee is suspended when they take another position, and the suspension will concern the minimum wage of €500, it stresses that the legislative proposal faces legal problems, while it will cause practical difficulties if applied, as for each official, a different amount of compensation will apply, depending on the pension they receive as a former state employee.
Therefore, it is highlighted, with this specific regulation, a legal problem arises, as for the same position, officials will be paid differently, based on whether they receive a pension from the public sector.
The Legal Service supports that two-speed officials are created, and such a regulation might clash with the principle of equal treatment.
The remaining regulations proposed by the Auditor General mentioned in the letter present the same legal problems of unconstitutionality identified in the first two proposals.
