Treasury of the Republic of Cyprus

    The Pensions Section of the Treasury of the Republic

    The Treasury of the Republic has the responsibility for paying out the pension benefits (one-off lump sums / gratuities and monthly pension) to the State Officials and Civil Servants, as well as for effecting the transfers of these benefits to the members of their families (widows/widowers or/and dependent children), in a correct and prompt manner.

    LEGAL FRAMEWORK




1. CIVIL SERVANTS’ PROFESSIONAL PENSION SCHEME

A Civil Servant is one who is permanently employed in the:

      · Public Service;

      · Services of the Auditor General and the Accountant General, and of their Deputies;

      · Public Educational Service;

      · Security Forces (Police, Fire Department, Civil Defense)

      · Army of the Republic


Those employees who are appointed to a permanent post in the Public Service for the first time from 1/10/2011 onwards are not eligible to join the pension scheme.

The calculation of the pension benefits is based on the provisions of the Pensions Laws that were in force on the retirement date of each employee.

The pension and the one-off lump sum / gratuity cannot be assigned or transferred over, and are not subject to confiscation, foreclosure, or hold.

unless

(α) for the purpose of paying a debt to the Republic;

(β) for adhering to a Court Order pertaining to the alimony of a spouse / ex-spouse.

1.1 Main retirement reasons

      · Age limit

      · Voluntary early retirement

      · For public benefit reasons

      · Due to mental or physical incapacitation

      · Due to his/her appointment to a Public Law Organization or a Local Authority.

      · Appointment to public office that is incompatible with his/her current post in the Public Service

      · Obligatory retirement

      · Resignation


1.2 When is the service considered pensionable?
Duration of an employee’s service in a governmental post

The duration of service in a non-pensionable post, or service on a temporary basis, or based on a contract, or on a probationary / temporary / hourly-paid basis, which immediately follows service in a pensionable post and where the appointment of the employee to a pensionable post has been validated, the duration of the service in question is considered to be pensionable.

Educational leave which has been granted by the relevant authority based on the regulations prevailing at the time, or leave which has been granted with the permission of the Council of Ministers for the benefit of education or for the purposes of public policy is considered to be pensionable service. Maternity and parental leaves are also considered pensionable.

Service in a Public Law Organization or in a Local Authority based on a service plan equivalent to the Governmental one, and where all the benefits have been transferred to the Government, is also considered pensionable service.

Period of suspension with partial pay is also considered pensionable service.

Period of employee absence due to unpaid leave for reasons not pertaining to public benefit, and also due to strikes, is not considered to be pensionable service.

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1.3 Calculation of emoluments

1.3.1 For service up to 31/12/2012
For the service of an employee up to 31/12/2012, the pensionable emoluments based on which the pension benefits are calculated, are the emoluments as at the date of his/her retirement and not the emoluments that he/she was earning as at 31/12/2012.
Pensionable emoluments represent the gross salary of the employee Χ 12
(the 13th salary is not considered pensionable emolument)

Based on the Pensions Law, in the case that the salary of an employee is on a pay scale, and the employee up until the date of his/her retirement or resignation or death has earned less than half of the next increment on his/her pay scale, then his/her pensionable emoluments are deemed to be increased by so many twelfths of the amount of the increment in question as are the months served following the granting of his/her last increment. In the case that an employee has earned not less than half of the next increment on his/her pay scale by the date of his/her retirement, then his/her pensionable emoluments are deemed to be increased by the whole amount of the increment in question.

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1.3.2 For service from 1/1/2013 up until retirement or until the completion of 400 months of service (whichever occurs earlier)

For the service of an employee from 1/1/2013, his/her pensionable emoluments are calculated as the average of the gross pensionable emoluments of the total months of pensionable service carried out by the employee, until the date of his/her retirement (career salary), adjusted based on the prevailing value of the Social Insurance Fund unit at the time, for every completed month of pensionable service.

Α) Annual pension for service until 31/12/2012 = Annual pensionable emoluments Χ pensionable service months at the retirement date (maximum 400 months) / 800

Non-taxable one-off lump sum = Annual Pension Χ 14/3

Β) Annual pension for service from 01/01/2013 onwards = Career salary Χ pensionable service months until the completion of 400 months or until retirement (whichever occurs earlier) / 800


Taxable one-off lump sum = Annual Pension Χ 14/3

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2. WIDOW’S/WIDOWER’S PENSION AND ORPHAN’S BENEFIT

2.1 Recurrent contributions to the Widows’ and Orphans’ Fund and provisions for transferring the pension

The recurrent contributions are obligatory for each employee entitled to pension, irrespective of his/her marital status, and these come to 2% on his/her total monthly pensionable emoluments (Ν.113(Ι)/2011, effective from 01/10/2011) up until the completion of 400 monthly contributions.

It is important to clarify that the temporary service of an employee (without contributions) is accounted for, for the purpose of calculating the 400 monthly contributions, at 50%. As such, the date of completion of the 400 months of service and the 400 monthly contributions to the Widows’ and Orphans’ Fund is the same only when the initial appointment of the employee pertains to a permanent post or in the case of redemption of service through contributions.

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2.2 In the case of death of a civil servant/pensioner, his/her pension is transferred over to the surviving spouse, from the date of the first spouse’s death up until the death of the second spouse. It should be noted that weddings conducted after the retirement date are not taken into account. Moreover, in the case of dependent children, an orphan’s benefit is granted.

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2.3 Calculation of widow’s/widower’s pension

For service with recurrent contributions to the Widows’ and Orphans’ Fund, 75% of the deceased employee’s pension is transferred over to the widow/widower.

For service without recurrent contributions, 37,5% of the deceased employee’s pension is transferred over to the widow/widower.