The state must refund more than 5 million euros in pension contributions to 225 unmarried and childless public sector employees after a Supreme Court ruling. The House Finance Committee heard this on Monday as it examined a bill restoring the refunds.
Employees in the public and wider public sector have paid the contributions for years, so that their pension can pass to a widow or dependent children when they die. Until 2013, employees who were not married, had no civil partnership and had no children got the contributions back when they retired, as they had no dependants to benefit.
The process changed under fiscal consolidation measures adopted in 2012 as part of the memorandum. Several employees whose contributions were not refunded went to court. The Supreme Court ruled that withholding the contributions from employees who retired on or after 1 January 2012 amounted to depriving them of a property right.
The bill restores the provision for refunds. Employees will have to claim them within 12 months of retiring.
A Treasury representative told the committee that a legal opinion was sought after the ruling. The opinion called on the Treasury to comply with the ruling and pay the 25 employees who won the case, and they received their contributions plus interest. Another 200 employees who claimed in time after the ruling should get back around 5 million euros in total, the representative said.
A Finance Ministry representative said that an employee who married after retiring, having received the refund, would have to repay it before their spouse could qualify for a widow’s pension.
The civil servants’ union PASYDY, the Isotita union and the Cyprus Workers’ Confederation (SEK) backed the bill.
Some parliament members, somewhat taken aback by the bill, joked that many state employees would divorce shortly before retiring so as to have no dependants and get their contributions back.
