The government has reached a preliminary agreement with Bank of Cyprus and the banking employees’ union to compensate provident funds hit by the 2013 deposit haircut, Government Spokesman Konstantinos Letymbiotis said.
President Nikos Christodoulides held talks at the Presidential Palace on Thursday afternoon with Bank of Cyprus chairman Takis Arapoglou, chief executive Panicos Nicolaou and honorary president of the Bank Employees Union (ETYK) Loizos Chadjikostis. Finance Minister Makis Keravnos and Labour Minister Yiannis Panayiotou also attended.
The meeting produced a preliminary agreement on settling the issue of compensating bank employees’ provident funds, whose deposits were written down during the 2013 bailout crisis.
“Another significant issue that remained pending is now heading towards final resolution,” Letymbiotis said in a statement.
Two-tier system created
In 2017, the cabinet approved a scheme of increased state compensation for lost pension rights of provident fund members. However, the scheme’s terms created disparities for a large number of bank employees who were still working on 19 July 2017, resulting in two tiers of beneficiaries.
The government, ETYK and Bank of Cyprus have now agreed on a framework for financial contributions from all parties, through which additional compensation will be paid and the existing disparity eliminated. The framework will be submitted to the relevant bodies of all parties for approval.
Closing crisis-era issues
Letymbiotis said the development has clear political and social significance. Following the start of payments from the National Solidarity Fund last September, another outstanding issue from the difficult period of the economic crisis is being resolved.
He described the agreement as another message of responsibility and consistency, but above all of the Christodoulides government’s commitment to resolving longstanding issues and strengthening the trust of workers and citizens.
“A message that our country’s progress is being built with vision and hope,” he added.
The 2013 bailout saw deposits over €100,000 in Bank of Cyprus and Laiki Bank written down to recapitalise the lenders, with some large depositors losing significant sums.
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