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MEPs facing pension fund “embezzlement” talk

EUROPE - Members of the European Parliament are facing suggestions that they might be embezzling their own pension fund.

The comments from Liberal Democrat MEP Chris Davies follow criticism by German MEP Markus Ferber about how the deficit of the voluntary pension fund for MEPs was addressed.

Ferber unearthed other issues which, if found to be true, would be "akin to embezzlement", Davies told IPE.

"The current arrangements leave members open to the accusations that private contributions may be paid out of public funds and if that were to be the case in practice than this is akin to embezzlement. It may not be happening, what you hear are a lot of rumours - but I suspect it is happening."

The European Parliament's press office was not available for comment.

Currently around 485 out of 732 MEPs have chosen to pay into the pension fund. Each year about €26,700 is put into the fund by the parliament, i.e. the taxpayer.

MEPs are expected to contribute another €13,300. This money is deducted at source from members' office allowance.

Davies and other criticises that in the regulations it is only mentioned that MEPs are required to repay this money out of their personal account.

"But there is no enforcement of this mechanism, it does not lay down how it will be done. Nor does is make provisions for it to be monitored," Davies says.

Yesterday, amendments he tabled to put arrangements in place from 31 March next year to see MEP's contributions paid by Direct Debit out of members' personal accounts were carried.

However, they have yet to go to parliament - probably in two weeks. Davies said he would not be surprised if this paragraph were deleted.

As for Ferber's other criticism, most of it was "watered down" according to Davies - although attempts to completely remove the paragraphs in question failed.

For example, Ferber's report's wording was changed to read that instead of "criticised" the parliament's office for not taking action to clear up anomalies in the scheme and this was changed to "noted that".

"A criticism is a call for action whereas a note is well merely a passing reference," Davies stresses.

Apart from the issue of MEP's contributions, the use of more taxpayers' money to address the £15m deficit in the fund is the main point of criticism.

The deficit is currently shrinking, says Davies, because stock markets are up again and because arrangements were put in place to increase contributions to the pension fund - both MEP's and parliament's, which in turn means that taxpayers also have to contribute more.

"The key question is: should the taxpayer be responsible for topping up the pension fund? Their schemes don't get topped up on public expense and I don't think their representatives' should be either," Davies says.
 
He did not want to go into a debate whether it would be acceptable for MEPs to change the pension scheme funding to a 1:1 basis, where taxpayers only pay into the fund as much as MEPs. "Now, what should an MEP be paid? My Italian colleagues are getting paid twice as much as myself."

Also in yesterday's session, parliament's 2004 accounts have finally been signed off after having been blocked by allegations that parliament was being ripped off by Strasbourg on the rent for the building, which is co-owned by a Dutch pension fund. Investigators concluded that they found no proof of illegal acts. Strasbourg was, however, criticised for its "discourteous" approach.

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