The issue returns to discussion today, but in the absence of the Minister of Finance – The aim is for the bills and legislative proposals to reach the Parliamentary Plenary within the next few weeks, says Christiana Erotokritou.
The Parliamentary Committee on Finance and Budgetary Affairs will discuss once again today the two bills submitted by the Ministry of Finance concerning the provision of lump-sum gratuities to state officials.
These bills aim to regulate the issue of multiple pensions, but they have not received a positive response from MPs, who instead support their own legislative proposals, which are also being debated today.
To standardise the system and achieve uniformity in the future, the government has submitted two bills, titled:
- “The provision of gratuities to officials law of 2025”
- “The income tax (Amendment) law of 2025”
According to the proposed provisions, gratuities will be taxed at a rate of 15%, while officials will contribute 3% of their monthly earnings towards their gratuity. These changes will only apply to those assuming office after the new legislation is approved.
However, opposition and ruling party MPs alike have strongly criticised the government’s approach, arguing that the proposal simply replaces multiple pensions with multiple gratuities and does not affect current officials, unlike the parliamentary proposals, which also address the retirement age of officials.
At today’s scheduled session, Finance Minister Makis Keravnos, despite being invited once again, will not be present as he has departed for Brussels to attend the Eurogroup and Ecofin meetings taking place today and tomorrow.
Given this, the MPs on the Finance Committee may decide which of the 12 legislative proposals will be brought before the Plenary for voting in the coming weeks, as Parliament aims to resolve the issue soon, according to Christiana Erotokritou, Chair of the Parliamentary Finance Committee. She clarified that both the legislative proposals and the government bills will be submitted to the Plenary, though it remains uncertain whether this will happen before or after Easter.
Ms Erotokritou was asked about the progress of the matter on the sidelines of the inauguration of the renovated Byzantine Museum in Nicosia. When questioned on whether the process was nearing completion, she responded: “The discussion will continue in the Finance Committee today. However, we are reaching the end. The legislative proposals have been extensively debated over several months, and the government’s bill began being discussed last week. So, I believe we are approaching the conclusion.”
She expressed optimism that within the next few weeks, the matter will be brought before the Plenary, where each party will take its own stance on the issue.
When asked to clarify the core problem, Ms Erotokritou stated: “To be clear and honest with the public, what is truly problematic and distorted is the issue of multiple pensions.”
She further explained: “It is an unprecedented situation that allows for either the collection of multiple pensions or the simultaneous receipt of both a pension and a salary or remuneration, depending on the office held. This is indeed an anomaly, and I believe it is what most concerns the public.”
She noted that these different categories are addressed in the legislative proposals under discussion.
Regarding the government bill, she pointed out that it mainly applies to future officials rather than current ones. She also acknowledged the constitutional challenges in regulating existing pensions, as well as the necessity for all legislative measures—whether from the government or Parliament—to align with Supreme Court rulings, particularly the 2014 decision on the matter.
Asked whether she believes the issue will soon be resolved, Ms Erotokritou responded: “This matter will inevitably be settled, as there are pending legislative proposals before the Committee. Once submitted, they must be debated and will eventually reach the Plenary.”
She explained that the lengthy discussions were due to waiting for the government’s proposal, but now that it has been submitted, the issue will soon be brought before the Plenary.
When asked if both the government bill and parliamentary proposals would be considered together, she stated that both will proceed simultaneously and neither will be excluded in favour of the other.
The number of legislative proposals and the complexity of the issue in the EU highlight the difficulty of addressing multiple pensions.
Last week, a study conducted by the Parliamentary Research and Studies Service was published, following a request from MP Stavros Papadouris.
As part of this research, a questionnaire was sent to the European Centre for Parliamentary Research and Documentation (ECPRD), covering the following topics:
- How is the issue of multiple pensions legislated for former and current officials?
- Are active political officials allowed to receive multiple pensions in addition to their salary? If so, from which offices do these pensions originate, and what are the applicable age limits?
The ECPRD provided responses from 18 European countries, which were analysed by the Parliamentary Research Service.
Among the key findings:
- Most European countries are moving towards abolishing special pension schemes for political officials, integrating them into the general social security system.
- Some countries, such as France and Sweden, continue to maintain separate pension schemes for politicians.
- The majority of EU states strictly prohibit officials from receiving both a salary and a pension simultaneously to ensure fair distribution of public funds.
- However, exceptions exist in Bulgaria and Romania, where politicians can receive pensions while still in office.
- The practice of allowing multiple state pensions for active officials is largely prohibited. Countries such as Spain, France, Slovenia, the Netherlands, Estonia, Hungary, Croatia, and the Czech Republic fully ban multiple pensions for officials still in office.
- Only three countries—Bulgaria, Romania, and Sweden—allow multiple pensions.
- Germany permits pensions from different sources, but with a maximum cap on total earnings.
- Some countries, like Greece, allow multiple pensions but impose reductions (20% for two pensions, 30% for three).
The 12 legislative proposals on today’s Finance Committee agenda include:
- Pensions (certain officials of the Republic) (Amendment) Law of 2011 – Proposes raising the retirement age for MPs from 60 to 63 years.
- Pensions for state officials (General Principles) Law of 2016 – Seeks to establish a new pension framework to align with Supreme Court rulings and correct distortions.
- Pensions (certain officials of the Republic) (Amendment) Law of 2016 – Proposes raising the retirement age for MPs and ministers to 65 and suspending pensions for those elected as MEPs.
- Pensions for state officials (General Principles) (Amendment No.2) Law of 2016 – Regulates the simultaneous receipt of pensions and salaries.
- Public sector employees pension scheme (General Provisions) (Amendment) Law of 2024 – Addresses multiple pensions.
- State officials pension scheme (General Provisions) (Amendment) Law of 2024 – Similar provisions on multiple pensions.
- Pensions (certain officials of the Republic) (Amendment) Law of 2024 – Also tackles multiple pensions.
- Pensions for members of the Educational Service Commission (Amendment) Law of 2024.
- Pensions for members of the Public Service Commission (Amendment) Law of 2024.
- Municipalities Law (Amendment No.4) of 2024 – Regulates multiple pensions.
- Income Tax (Amendment No.2) Law of 2024 – Imposes a 90% tax on excess pension income exceeding €70,000.
- State Pension Waiver Law of 2024 – Allows officials to voluntarily forgo their state pension while in office.
