Filenews 27 March 2024 - by Eleftheria Paizanou
The granting of generous lump sums to state officials who will complete their term of office will replace the multiple pensions that apply to current officials, according to draft bills prepared by the Ministry of Finance, as part of the reconfiguration and modernization of the institutional framework governing the pension benefits of state officials.
Indeed, according to Phileleftheros information, in some cases, the total lump sum can amount to hundreds of thousands of euros (in the case of the next President of the Republic it will be €852,000) and will correspond to a pension of five years. That is, under the provisions of the relevant bill, the state will prepay the pensions of about five years that officials would receive if the law is not changed. The winners will be those who assume the positions of presidents of the Republic and the Parliament and ministers after the adoption of the new laws, while it seems that the MPs will be "thrown" financially (in terms of the lump sum they will be entitled to), as the bill does not differentiate the amount of gratuity they receive today.
How will the lump sum be calculated?
According to the draft bill on multiple pensions, the pension for state office is abolished, in return for an increase in the gratuity received by state officials. At the same time, according to the plan, the amount of the lump sum will depend on the terms served by the state official. Specifically, as "F" is informed, in the case of the Presidents of the Republic and the Parliament, as well as ministers and deputy ministers, the lump sum that will be granted to them when they leave their post will correspond to 1/2 of their last monthly salary, multiplied by their months of service.
In the case of MPs, however, the amount of gratuity will be calculated on the basis of 1/4 of the last monthly salary, multiplied by the months of service. In addition, for the president and members of the National Health Service and the Education Service, the lump sum will be calculated on the basis of 1/6 of their last salary, while for Commissioners, Tax Officers, Presidents and members of the Authority, Corps or other official, the tip will be calculated on the basis of 1/12 of the last monthly salary, multiplied by the months of service.
Prepayment of 5 years pensions
According to the Audit Office and spokesman Marios Petrides, the bill does not solve the problem of the simultaneous payment of pension and salary, since it does not affect existing officials for the remainder of their term or for their subsequent terms in the same office. It also does not touch civil servants. Based on indicative calculations made by the Audit Office based on the provisions of the bill, in some cases the lump sum that specific categories of officials will receive will be increased compared to the lump sum they receive today. In addition, the lump sum will be granted on a term basis, which increases the overall income for those affected.
In detail, the lump sums will be as follows:
– Today, someone who serves in the office of President of the Republic (even beyond one term) receives a pension of €85,000 per year and €400,000 as a lump sum. With the draft bill, the President of the Republic who will leave after the first term, after the implementation of the new law, will receive a lump sum of €426,000 (€26,000 more than today), without pension rights, while if he leaves his position after two terms, he acquires the right to a second tip, so his total lump sum will reach €852,000. Essentially, he will be prepaid five years' pensions (about €430,000).
– In case someone currently serves in the office of President of the Parliament and leaves, he receives €67,000 a year pension and a lump sum of €315,000, regardless of the number of terms. With the proposal prepared by the Government, the tip in case of a second term is increased to €680,000, without the right to a pension, i.e. an additional amount of approximately €365,000. Here, too, the additional amount is equivalent to five years' prepayment of pensions.
– Ministers and deputy ministers who serve in the post for two terms, currently receive a pension of €4,200 per month and a lump sum of €235,000. With the new bill, the lump sum for two terms will rise to €552,000, without pension. In the case of one term of office, pensions of nine years are paid in advance.
– MPs with two terms currently receive a monthly pension of €4,100 and a lump sum of €230,000. With the draft bill, the lump sum is reduced to €228,000, without pension, that is, in this case no increased lump sum will be given, which will be equivalent to a pension prepayment, as provided for other categories of officials. It should be noted that for MPs with 3 and 4 terms, the lump sum will remain at the same level.
The bill for a pension at 65 years old is unconstitutional
In addition to the distortions included in the bill on multiple pensions, the Audit Office also identifies unconstitutional provisions for the granting of a pension at the age of 65 of active officials, instead of the 60th year they receive today. According to the spokesman of the Audit Office, Marios Petrides, who spoke to "F", the problem concerns the bill to suspend the date of pension payment for former officials, who are currently under 60, and for active officials. "The jurisprudence," he stressed, "is clear that such a suspension for five years (from 60 to 65) is unconstitutional for a service that has already been provided and therefore its pension rights have already been established." Petrides expressed hope that the Ministry of Finance will also seek views from the Audit Office.
As the representative of the Audit Office explained to "F", with the draft bill, if an existing mayor is re-elected for another 10 or 15 years and then elected MP, he will receive a mayor's pension and a MP's salary. "Similarly, if an existing MP is re-elected and appointed minister in the future, he will receive a minister's salary and an MP's pension. The same applies to retired civil servants. They will be able to receive a civil servant's pension and at the same time a minister's salary, a parliamentarian's salary, etc.," he noted.
Regarding the possibility of a complete abolition of pensions for future officials, Petrides noted that "there is no proposal of ours for the complete abolition of officials' pensions, without this meaning that the state cannot decide it." At the same time, he indicated that the Agency's proposal with the six texts of bills that it forwarded to Parliament in November 2023 was the regulation of problems and not the complete abolition of pensions.
He said the agency's approach followed the method applied to civil servants in 2012.
"We remind you that, at that time, the serving civil servants were locked in the pension rights they had established on 31.12.2012, while for their service from 1.1.2013 the pension and the lump sum were reduced and the payment time in case of early retirement was postponed from the 55th to the 60th year of age," he added. At the same time, he indicated that this regulation was judged to be entirely constitutional and even on 19.3.2024, i.e. recently, this was confirmed by the Supreme Constitutional Court. "So this arrangement is iron-headed. This regulation is proposed by us and we consider that our own texts remain as an option for MPs, if they prefer to regulate the issue and remove all distortions, without there being a complete abolition of pensions, as proposed by the Government," he stressed.
