.
The changes approved by parliament to the Social Insurance bill last week did not go as far enough as the anticipated general overhaul required to keep the Fund going and to ensure that the 25-year-olds of today will have a pension to look forward to.
Although the increase of contributions by all concerned and the abolition of the unfair six-month bonus to public servants will (hopefully) ensure the Fund’s viability some day, nothing was said about the taboo subject of raising both the retirement and pensionable age to 65.
The immature bickering between political parties was obviously related to voter power over the next few years and totally disregarded the present generation of young professionals who will see their total contributions to the SIF as well as the national health system rising to 26% in three decades’ time and up to 40% by the 2040s.
Another aspect arising from the debate of the past few weeks was that some politicians suffer from a real fear of getting an allergic rash to any proposal put forward by the employers federation, OEV, probably the only body in Cyprus to care about future pensioners. All other groups ever think about is how to burden the state with more teachers and civil servants who will want to retire at 60, simply to keep the network of nepotism well oiled and working.
With the ageing population that Cyprus is witnessing and the increasing number of able-minded and bodied people willing to work to their late 60s, it will be a necessity (and not an anathema) to talk about raising the retirement age very soon.
It is unfortunate that the present government only looks at things dogmatically and does not see the big picture, as any delay in increasing the retirement age from 63 to 65 will make the Fund less viable and doomed to failure sooner than later.
In the meantime, employers and employees alike will be throwing their money into a growing black hole, getting nothing in return, unless the Fund undergoes further reforms, a Commissioner is appointed to oversee the SIF’s operations over the years and the issue of age is resolved once and for all, despite plans in other European states to increase retirement to 68 or even 70 years. Let’s start with the more manageable reforms for now and hope that we won’t have to open up our wallets even further.
