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EU’s Borrell considering MEPs’ fund director

LUXEMBURG - A decision about the appointment of Law Debenture pension trustee head Eddie Thomas as a specialist director at the MEPs' pension fund is currently with the President of the European Parliament, Josep Borrell.

Richard Balfe, chairman of the almost €190m Luxembourg-registered fund, wrote to Borrell on August 31 inviting him to nominate Thomas as a specialist director of the fund.

The specialist director issue has - according to the correspondence - been going on for more than a year.

A letter from Balfe to Borrell in February suggested amending the fund's statutes to allow a member or company from outside the European institutions to be nominated by the board, as opposed to the current system whereby the person is chosen by the Parliament President. Balfe's August 31 letter acknowledged that this was "clearly not possible" for 2006/7.

Last week IPE reported Liberal Democrat MEP Chris Davies' criticism of the system whereby it's unclear whether members are paying back the pension contributions that are being taken out of their office allowances.

There is no suggestion that the management of the fund itself is under question - indeed Balfe and pension manager Adrian Cunningham agree that a better audit should be put in place.

Balfe said: "Once MEPs are starting to get a salary from parliament in 2009 pension contributions can then be taken from their salaries."

"We have always thought that MEPs should have their accounts audited annually and that the parliament should then audit these accounts - not all of them every year but do one in five every year so that they are properly audited and controlled," Balfe told IPE.

"However this is nothing to do with the pension fund - this is to do with the way the parliament arranges the way it pays its money to members and how members organise their finances."

The fact that the arrangement is not sufficiently regulated has been criticised by the European Court of Auditors since 1999.

Balfe dismisses the idea brought up by Davies to take the money out of MEPs' personal accounts by Direct Debit. "The Court of Auditors came down against that because of the administrative difficulties and costs involved.

"As an experiment a few Danish MEPs paid by direct debits in the early 1990s and it was a disaster - contributions were paid late, or not at all, and often for the wrong amounts - it also cost a small fortune in bank and administrative fees."

As for the pension fund itself Balfe stresses that the fund's actuaries, Hewitt, and auditors Deloitte "are in no doubt that it is a sound scheme".

"They've both given us a clean bill of health."
 
The fund will hold its annual general meeting in Brussels on November 29.

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