SEK supports raising public sector retirement age to 63

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In July 2004, the Cyprus Workers' Confederation (SEK) came out officially in favour of raising the retirement age in the broader public sector from 60 to 63, as proposed by the government.

On 28 July 2004, the Cyprus Workers' Confederation (SEK) released a statement in which it takes an official stand in favour of a Ministry of Finance proposal gradually to raise the retirement age in the broader public sector from 60 to 63. Reiterating a previous statement by its general secretary, SEK stated that gradually raising the retirement age in the broader public sector will help close the gap between the private and public sectors and have beneficial effects on the Social Insurance Fund and the state paybill.

SEK says that its position, initially outlined three years ago and a source of adverse criticism, is now the official government position and is included in the measures that the Ministry of Finance is recommending as part of the programme for the convergence of the Cypriot economy with the European Union. In this context, SEK has decided to support the implementation of this Ministry of Finance position for two basic reasons. First, given the increase in the average life expectancy it is wrong for workers to retire at the age of 60. Second, in a country with a budget deficit of around 7.3% of GDP there is no justification for such early retirement by public servants.

However, although SEK agrees with the Ministry on the question of a later retirement age, it disagrees on other proposals such as abolishing the right to unemployment benefits for people retiring at 60 and abolishing the right to a pension from the Social Insurance Fund at 63. SEK thus argues, both in direct meetings with the Ministry of Finance and in the framework of the Economic Advisory Committee, that the solution to these problems, particularly with regard to unemployment benefits, will come with an increase in the retirement age that keeps people in employment for another three years.

The Pancyprian Federation of Labour (PEO) has stressed its reservations on this issue, stating that research must be carried out on the potential effects, as a precondition for introducing later retirement ages in the public and broader public sector. According to PEO, research must be carried out primarily on the broader repercussions that implementation of this policy will have on employment, and the introduction of the measure should be the subject of social dialogue.

Both the Ministry of Finance and the Pancyprian Public Employees Trade Union (PASYDY) are expected to submit detailed proposals when social dialogue on the retirement issue begins in the framework of the public sector's Joint Staff Committee, at an as yet unspecified date.