The Bank of Cyprus has decided to compensate the provident funds of its current employees which suffered a deposit haircut in 2013, the Bank’s CEO John Hourican told the Cyprus News Agency on Tuesday.
This, he explained, would cost the bank €28 mn for 841 employees, whose provident funds were not compensated by a Government’s plan announced last year.
Hourican told the CNA that the issue of pension funds “has been politicized, 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.
Asked whether the Bank should respond politically, as the matter has been raised in the midst of the election campaign, Hourican noted that the Bank would “continue to play a critical role in supporting any government and any finance minister in ensuring that the road to prosperity is sustainable. As such, we remain agnostic as to the outcome of elections. Whatever the result may be, we must all work together with those charged with governing the country”.
He also noted that the Bank would like to see this matter agreed in the context of the overall discussions with the 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.
Asked whether the Bank would enter a discussion with the Union with the matter of the pension funds on the table, he noted that “the modernization of the employment structures in banking will be decisive for the survival of the entire industry in Cyprus. This is the single most important medium-term risk”.
Hourican added that he expected the Union to come to the discussions in good faith and that “it will work with us, not against us”.