21 EU staff pensions
| Committee's assessment
| Politically important |
| Committee's decision | Not cleared from scrutiny; further information requested
|
| Document details | Draft Regulation about rates of contribution to the EU staff pension scheme
|
| Legal base | Article 83a of and Annex xii to, Regulation 259/68 (the "Staff Regulations")
|
| Department | HM Treasury
|
| Document Number | (36232), 11970/14 + ADDs 1-4, COM(14) 462
|
Summary and Committee's conclusions
21.1 A pay and pension settlement in October 2013 for EU staff,
resulting from a European Court of Justice judgement, requires
the retrospective adjustment of the rate of contribution to the
pension scheme for the years 2011, 2012 and 2013. With this draft
Regulation the Commission proposes an adjustment, based on an
actuarial assessment.
21.2 The Government says that it does not support the Commission's
proposal, noting that, while it welcomes the retrospective increase
in the contribution rate for 2013, it does not think that the
Commission should be retrospectively reducing the contribution
rate for 2011 and 2012 and commenting that EU Institutions and
staff should not be immune from savings.
21.3 We note the Government's opposition to this proposal.
However, we should like to know, before considering this matter
again, what support it has in the Council for its view, what it
assesses the chance is of a challenge in the Court of Justice
if its view prevails in the Council and what it assesses the prospect
of defeating such a challenge might be. Meanwhile the document
remains under scrutiny.
Full details of
the documents: Draft
council Regulation adjusting, from 1 July 2011, 1 July 2012 and
1 July 2013, the rate of contribution to the pension scheme of
officials and other servants of the European Union: (36232), 11970/14
+ ADDs 1-4, COM (14) 462.
Background
21.4 In order to comply with a judgment of the European
Court of Justice, in Case C-63/12, adjustments to the remuneration
and pensions of EU officials for 2011 and 2012 were adopted in
October 2013 by the Council and the European Parliament. This
resulted in an adjustment of 0% for 2011 and 0.8% for 2012. These
adjustments to salary and pension require the retrospective adjustment
of the rate of contribution to the pension scheme for the years
2011, 2012 and 2013.
The document
21.5 With this draft Regulation the Commission proposes
adjustment of the rate of contribution to the pension scheme for
the years 2011, 2012 and 2013. It explains how the adjustment
figure is calculated and on the basis of what data. The proposal
has been actuarially assessed and its purpose is to maintain the
actuarial balance of the pension scheme. The complete actuarial
assessment is in four Commission staff working documents accompanying
the proposal.
21.6 In line with the 2011, 2012 and 2013 actuarial
assessments, the Commission concludes that the rate of contribution
required to maintain actuarial balance of the pension scheme is
11.0 % with effect from 1 July 2011, 10.0 % with effect from 1
July 2012 and 10.6 %.with effect from 1 July 2013. This would
be a change from the pension contribution rates which had been
applied previously, that is 11.6% in 2011, 10.6% in 2012 and 10.3%
in 2013. The adjustment would be backdated to apply from 1 July
2011.
The Government's view
21.7 In his Explanatory Memorandum dated 26 August
2014, the Financial Secretary to the Treasury (Mr David Gauke)
says that:
· the
Government does not support the Commission's proposal on pension
contribution adjustments;
· while
it welcomes the retrospective increase in the contribution rate
for 2013, it does not think that the Commission should be retrospectively
reducing the contribution rate for 2011 and 2012;
· EU
Institutions and staff should not be immune from savings;
· there
must be very substantial reductions in administration spending
across the EU Institutions;
· the
proposal to adjust the pension contribution rate would have no
financial impact on expenditure, but would reduce revenue by €22.3
million (£17.7 million) from 1 July 2011 to 1 January 2014;
and
· it
is estimated that it would increase revenue in 2014 by €9.2
million (£7.3 million), a gain which would occur annually
—
this gain is, however, subject to anticipated future adjustments
of the contribution rate.
Previous Committee Reports
None.
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