22 Remuneration and pension adjustments
for EU staff in 2013
| (a)
(35500)
15820/13
+ ADD 1
COM(13) 770
(b)
(35508)
15885/13
+ ADD 1
COM(13) 771
(c)
(35509)
15890/13
COM(13) 772
|
Draft Council Regulation adjusting, from 1 July 2013, the rate of contribution to the pension scheme of officials and other servants of the European Union
Draft Council Regulation adjusting with effect from 1 July 2013 the correction coefficients applied to the remuneration and pensions of officials and other servants of the European Union
Draft Council Regulation laying down the weightings applicable from 1 July 2013 to the remuneration of officials, temporary staff and contract staff of the European Union serving in third countries
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| Legal base | (a) Article 83a of the Staff Regulations and Annex XII thereto
(b) Articles 63 and 64 of the Staff Regulations and Annex XIII thereto, and Articles 20 (first paragraph), 64, 92 and 132 of the Conditions of Employment of Other Servants
(c) Article 13(1) of Annex X to the Staff Regulations
|
| Document originated
| (a) and (b) 7 November 2013;
(c) 8 November 2013
|
| Deposited in Parliament
| (a) 11 November 2013;
(b) and (c) 12 November 2013
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| Department | HM Treasury
|
| Basis of consideration
| EM of 22 November 2013
|
| Previous Committee Report
| None |
| Discussion in Council
| December 2013 |
| Committee's assessment
| Politically important
|
| Committee's decision
| Cleared; further information requested
|
The documents
22.1 This Report covers three proposals relating
to EU staff pay and pensions.
PENSION ADJUSTMENT PROPOSAL — DOCUMENT (A)
22.2 This is the Commission proposal for the adjustment
of the rate of contribution by EU officials to their pension scheme,
backdated to apply from 1 July 2013. The proposal explains how
the adjustment figure is calculated and the data used. The proposal
has been actuarially assessed and its purpose is to maintain the
actuarial balance of the pension scheme.
22.3 The Commission concludes that the rate of contribution
required to maintain actuarial balance of the pension scheme is
10.3% of basic salary. Therefore it is proposing that the rate
of contribution be adjusted to 10.3%, backdated to take effect
from 1 July 2013. This would be a change from the current pension
contribution rate of 11.6%.
22.4 If adopted, this proposal will reduce EU Budget
revenue by €19.3 million (£16.4 million) over the six
months from 1 July 2013 until the end of the calendar year. It
would decrease revenue in 2014 by €49.8 million (£42.3
million); a loss which would then occur annually until 2019, subject
to future revisions.
CORRECTION COEFFICIENTS APPLIED TO EU OFFICIALS —
DOCUMENT (B)
22.5 This is the Commission proposal for the adjustment
of correction coefficients applied to the remuneration of active
officials working outside Belgium and Luxembourg, to apply following
1 July 2013. The document reports on its proposal for the adjustment
of correction coefficients applied to the pensions of former staff
living outside Belgium and Luxembourg, to apply following 1 July
2013. The document explains how the adjustment figure is calculated
and on the basis of what data.
22.6 Due to the suspension of the application of
certain provisions in Article 65 of the Staff Regulations in 2013
and 2014, this Commission proposal does not include the annual
adjustment to remuneration and pensions, but is limited to the
adjustment of the correction coefficients and updating the reference
date for the exchange rates.
22.7 The data used is taken from changes in the purchasing
power of salaries in national civil services, changes in the cost
of living in Belgium, and economic parities determined by Eurostat.
22.8 The weightings applicable to the remuneration
of officials and other servants employed in the Member States
other than Belgium and Luxembourg are determined by the ratios
between these economic parities and the exchange rates applicable
as at 1 July.
22.9 The weightings calculated for the pensions of
individuals living outside Belgium and Luxembourg in the various
countries are determined by the ratios between these economic
parities and the exchange rates applicable as at 1 July.
22.10 The report includes a table demonstrating the
correction coefficients applicable to the remuneration of officials
and pensions for duty station locations outside of Brussels (active
staff) and places of residence outside Belgium (pensioners).
22.11 The Commission estimates the proposal will
result in a €6.4 million (£5.4 million) increase to
expenditure over the six months from 1 July 2013 until the end
of the calendar year. The estimated financial impact in 2014 will
be an increase in expenditure of €12.7 million (£10.8
million) which will occur annually thereafter, subject to future
revisions.
WEIGHTINGS APPLIED TO EU OFFICIALS IN THIRD COUNTRIES
— DOCUMENT (C)
22.12 In this document the Commission reports on
its proposal for updated weightings, applicable from July 2013,
to the remuneration of officials of the EU serving in "third
countries" outside the EU.
22.13 EU staff based in Brussels have their salaries
paid in Euros and set according to price indices for Brussels.
However for those staff living and working outside the EU, the
Commission has a provision to weight salaries in order to maintain
equivalent purchasing power for those in third countries.
22.14 The weightings are calculated by dividing the
economic parity by the exchange rate of the relevant country.
The report explains how the adjustment figure is calculated and
on the basis of what data in further detail.
22.15 The proposal will result in a €680,000
reduction in expenditure over the six months from 1 July until
the end of the calendar year. The estimated financial impact in
2014 will be a reduction of €1.35 million reduction in expenditure
which will occur annually thereafter, subject to future revisions.
The Government's view
22.16 In an Explanatory Memorandum dated 22 November
2013, the Economic Secretary at HM Treasury (Nicky Morgan) says
that there must be very substantial reductions in administration
spending across the EU institutions; any suggestion of waste in
the budget damages the standing of the institutions and of the
EU as a whole.
22.17 In line with this and the approach that the
UK has taken in EU Staff Regulations reforms, the UK will be voting
against pension adjustment and correction coefficient proposals.
22.18 The Government can support the proposal on
weightings for EU officials in third countries as this will result
in a decrease in EU budget expenditure.
22.19 The Commission released these proposals on
7 and 8 November. On 11 November the Presidency put forward the
proposals for written procedure, beginning 14 November and ending
21 November. The Government voted against this approach emphasising
the insufficient time which would be allowed for national parliaments
to scrutinise the proposals; however the approach was adopted
by QMV.
Conclusion
22.20 We take note of the Government's intended
approach to voting on these three proposals in the Council, which
we strongly support. Despite the speed with which the Commission
seeks to have them adopted, which we regret, we see no reason
to retain them under scrutiny in the light of the Government's
approach. In so doing, we are aware that there is unlikely to
be a blocking minority to prevent the first two proposals from
being adopted.
22.21 We note, however, that in relation to document
(b) the Minister says that, due to the suspension of the application
of certain provisions in Article 65 of the Staff Regulations in
2013 and 2014, this proposal does not include the annual adjustment
to remuneration and pensions, but is limited to the adjustment
of the correction coefficients and updating the reference date
for the exchange rates. We ask the Minister to explain this further.
In so doing, we ask him for his assessment of the impact of the
Court of Justice's judgment on 19 November on the 2011 annual
adjustment for remuneration and pensions,[62]
which found in favour of the Council, whom the UK and several
other Member States supported. We will be interested to know what
impact he estimates the judgment will have on the EU Budget.
62 C63/12, C-66/12, and C-196/12. Back
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