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The Fiscal Burden of the Legacy of the Civil Service Pension Systems in Northern Cyprus


  • Hasan U. Altiok

    () (Eastern Mediterranean University, North Cyprus)

  • Glenn P. Jenkins

    () (Eastern Mediterranean University, North Cyprus and Queen's University, Canada)


This paper estimates the fiscal burden of the Pay-As-You-Go (PAYGO) civil service pension systems that were closed in 2008 to new members in North Cyprus. At that time, a new pension system was introduced for the newly hired government employees and new private sector workers. Estimates are made of the difference between the present values of future contributions and the pension benefits. This approach measures the government’s net liabilities related to the accruals of the pension rights received by the individuals covered through these plans for the period from 2009 to the death of the last member in the system. The estimated unfunded cost of these civil service pension plans is 7.3 billion euros or 276% of GDP. This amount of implicit debt is significantly higher than 5.8 billion euros that has been estimated as the amount of cash compensation for land and property that would need to be paid in order to reach an agreement for a solution to the Cyprus conflict.

Suggested Citation

  • Hasan U. Altiok & Glenn P. Jenkins, 2011. "The Fiscal Burden of the Legacy of the Civil Service Pension Systems in Northern Cyprus," Working Papers 1284, Queen's University, Department of Economics.
  • Handle: RePEc:qed:wpaper:1284

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    References listed on IDEAS

    1. Disney, Richard, 2000. "Crises in Public Pension Programmes in OECD: What Are the Reform Options?," Economic Journal, Royal Economic Society, vol. 110(461), pages 1-23, February.
    2. Oksanen, Heikki, 2005. "Public pensions in the national accounts and public finance targets," Journal of Pension Economics and Finance, Cambridge University Press, vol. 4(03), pages 291-312, November.
    3. palacios, Robert & Whitehouse, Edward, 2006. "Civil-service pension schemes around the world," Social Protection and Labor Policy and Technical Notes 90340, The World Bank.
    4. Robert Novy‐Marx & Joshua Rauh, 2011. "Public Pension Promises: How Big Are They and What Are They Worth?," Journal of Finance, American Finance Association, vol. 66(4), pages 1211-1249, August.
    5. Jeffrey R. Brown & Robert Clark & Joshua Rauh, 2011. "The Economics of State and Local Public Pensions," NBER Working Papers 16792, National Bureau of Economic Research, Inc.
    6. Heikki Oksanen, 2004. "Pension Reforms: An Illustrated Basic Analysis," CESifo Economic Studies, CESifo, vol. 50(3), pages 569-625.
    7. Brown, Jeffrey R. & Clark, Robert & Rauh, Joshua, 2011. "The economics of state and local pensions," Journal of Pension Economics and Finance, Cambridge University Press, vol. 10(02), pages 161-172, April.
    8. Monika Queisser & Edward R. Whitehouse, 2006. "Neutral or Fair?: Actuarial Concepts and Pension-System Design," OECD Social, Employment and Migration Working Papers 40, OECD Publishing.
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    Cited by:

    1. Hasan U. Altiok & Glenn Jenkins, "undated". "The Pension Traps of Northern Cyprus," Development Discussion Papers 2012-03, JDI Executive Programs.
    2. Hasan U. Altiok & Glenn Jenkins, 2012. "Social Security Reforms in Northern Cyprus: Are they Fiscally Balanced and Socially Equitable?," Development Discussion Papers 2012-02, JDI Executive Programs.

    More about this item


    civil service pensions; pension liabilities; implicit pension debt; pension indexing; North Cyprus;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt

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