CYPRUS: BOCY to compensate 841 staff provident funds

The Bank of Cyprus announced that it will compensate the provident funds of 841 employees to the tune of EUR 28 mln, who had suffered a deposit haircut in 2013 and were not included in the government compensation plan announced last year.

The bank’s CEO John Hourican was quoted by the Cyprus News Agency as saying that the issue of pension funds “has been politicised, and this is unfortunate” and noted that “we don’t want our people and their pensions and benefits to become a political matter”.

The state, he said, “has made its move towards restitution, but as a matter of moral principle we acknowledge that it is now our obligation to make the next step. We must accept that the taxpayer cannot shoulder a burden that should be borne by a private company”.

He pointed out that this was an obligation towards all of the bank’s stakeholders, including its customers and shareholders. “But the staff and the society in which we operate are also key stakeholders. Being the largest bank in the country, we are keenly aware of our obligations towards the country itself, and its taxpayers who should not be burdened with securing the pension funds of 841 bank employees who continue to work at the bank. This is our responsibility,” he said.

Hourican noted that the bank would like to see this matter agreed in the context of the overall discussions with the staff trade union, ETYK.

“In the meantime, this became, to our bemusement, a political issue. This was unfortunate, but if decoupling the pension funds from the rest of the discussion with the union would take the bank out of the political debate, then I’m willing to do it,” he added.