EUROPE - The European Parliament will pay Aon Consulting €36,000 for a full actuarial study of the voluntary supplementary pension fund for its members.
This study will be in addition to one that Hewitt, the fund's current actuary, has recently conducted.
Parliament wanted an "independent actuarial study" to look into the financial stability of the fund after changes to benefits and salaries of members of the European Parliament (MEPs).
From 2009 a new MEP statute will be introduced under which the voluntary pension fund will be closed to new members. Furthermore, MEPs already in the fund opting for the new statute will not be able to accrue further benefits. The decreasing number of contributors to the scheme will also mean a decline in scheme assets.
"Therefore it is critical to ensure that assets match liabilities," Geoffrey Furlonger, head of Aon Consulting's EU practice, told IPE.
He added that the European Parliament was concerned there might not be enough money in the fund to last until the last member has left.
"Because it is an important and sensitive evaluation they wanted an independent actuary," Furlonger added.
The board of the voluntary pension fund opposed the second full actuarial study in discussions on the subject over the last months.
In May, chairman Richard Balfe wrote to the then newly elected president of the European Parliament, Hans-Gert Poettering, urging him to re-think the tender.
"Our view remains that a full actuarial study by an independent actuary is not necessary and indeed a waste of public money," Balfe stated.
The fund suggested to use an independent actuary to get a second opinion on the actuarial assumptions and methods used by Hewitt.
But Parliament decided against this option and will also be looking into "different financing options" should the fund need them.
Aon won against six other competitors. The study on the current financial stability of the fund and future projections will be carried out mainly by Aon's actuaries in Brussels, "with support from other European offices," Furlonger explained.