EUROPE – The European Parliament has voted in favour of a new pension scheme for its MEPs in a move that will change the current system that allows disparities in salaries and pension rights.
The Strasburg-based parliament approved the change yesterday, endorsing a report presented by Liberal Democrat Lithuanian MEP Ona Jukneviciene. The vote was 551 for, 81 against.
The report, presented at a session to discharge the 2003 budget, calls for the approval of a statute to end wage disparity between MEPs from different countries and pave the way to equal pension rights.
“A new and separate pension instrument should be set up,” the report suggested. But the planned changes also imply that “contributions from Parliament to the current voluntary pension fund should then stop”.
MEP are granted wages and pension rights equal to their national parliamentary counterparts but different to their European colleagues.
In 1993 the Bureau Parliament launched a voluntary pension scheme, known as ASBL, to augment MEPs' pension provisions.
Contributions to the schemes are deducted from an MEP’s general parliamentary expense allowance but MEPs are supposed to refund the sums deducted for pension purposes.
Jukneviciene called for contributions to be deducted from a personal source rather than the system. She urged in a statement: "We do need a common statute and I urge the Luxembourg Presidency to deliver an agreement in this respect. Perhaps then Parliament will take a fresh look at its internal allowances."
At stake is also the issue of who should foot the bill in case of deficit, said Neil Corlett, spokesman for the Liberal Democrat group.
According to the report, citing the latest revised actuarial valuation dated 31 December 2003, liabilities offset current assets by €41.7m. The scheme itself is worth €140m, and its funding level at the end of 2003 was 76.4%.
The voluntary pension funds is used by two thirds of MEPs, its assets are invested in equities bonds 60:40. Assets are managed by Crédit Agricole Indosuez Luxembourg.
At the moment the scheme’s deficit is sustainable because the number of active members is higher than retired members, Corlett said.
But things could change for the worse, he said. He added that the Court of Auditors had already called for “clear rules” to be established in the scheme to define the liabilities and responsibilities of the European Parliament and members if a future actuarial valuation were to indicate a deficit.
According to Jukneviciene’s report an actuarial valuation is to be carried out at the beginning of 2005, but it was not clear who would be responsible for it.