The Finance Ministry is considering offering state officials a one-off lump sum payment instead of pensions, even as political parties prepare to present legislation that would abolish multiple pensions and raise the retirement age to 65 for government officials.
During yesterday’s parliamentary Finance Committee discussion of the 2025 state budget, the Finance Minister indicated the ministry might reintroduce provisions for a lump sum payment to state officials who retire without a pension.
The original draft bill had proposed a generous one-off payment to state officials in lieu of pension payments for their term in office.
The pension for state office would be abolished under that bill, offset by an increase in the gratuity received by state officials.
Under the proposed scheme, the lump sum amount would be determined based on the number of terms served by the state official.
Both political parties and the Audit Office had opposed this initial draft, with parties arguing that MPs would receive lower lump sums compared to ministers and other state officials.
Finance Minister Makis Keravnos told the committee: “We attempted consultations with political parties but found no response. The bill is currently before the Council of Ministers. I cannot specify when it will be submitted to Parliament.”
The ministry has since prepared a new draft bill proposing voluntary pension renunciation by officials upon assuming state office and raising the pension age from 60 to 65.
The government faces pressure to act quickly as parties are set to reconvene in two weeks to finalise their legislative proposals.
Six draft laws by MPs Demetris Demetriou, Irene Charalambidou, Alexandra Attalidou and Stavros Papadouris, incorporating recommendations from the Audit Office and processed by parliamentary services, appear to be gaining traction.
The Law Office has expressed reservations about these proposals.
Additionally, a separate bill by the Democratic Rally (DISY) and Democratic Party (DIKO) regarding pension renunciation is heading to the plenum, with provisions set to take effect from June 1, 2026.
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