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MEP calls for immediate review of EU pension costs

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  • MEP calls for immediate review of EU pension costs

EUROPE - English MEP Vicky Ford of East England has demanded a review of the €1.3bn annual budget covering pensions for the European Union's retired civil servants.

A European Parliament committee is set to decide whether or not to launch the review on 24 January.

Ford has asked the Economic and Monetary Affairs Committee to support a call to the European Commission to submit a detailed report to Parliament by 30 April.

Eurostat, the EU's statistics office, recently estimated that annual costs for the Pension Scheme of European Officials - PSEO - would jump from about €1.2bn last year to €2.5bn by 2045.

The Council of the EU, which represents national governments, is currently consulting the Eurostat study, issued in August. Its relevant working group is made up of civil servants from the 27 member state governments.

The group formally requested, on 22 December 2010, that the Commission present "appropriate proposals" for amendments to staff regulations by the end of 2011.

But Ford has decried the fact that another year would have passed before any informed debate on the issue would be possible.

She also told IPE.com that Brussels ought to be "taking its own medicine", particularly in light the fact its pensions Green Paper asks member states to encourage people to work more and longer, increase pensionable age and penalise earlier retirement.

In an amendment to a vote on a report on the Green Paper by fellow MEP George Sabin Cutas, Ford wrote: "Which of the steps, mentioned above, has or will be taken by the Commission to ensure the EU's own pension schemes are sustainable?"

She goes on to express concern about the present situation as set under staff regulations. She argues certain pensions no longer reflect current economic circumstances and that the rules fail to take longer life expectancy into account. 

Following an earlier parliamentary query submitted by Ford, the Commission published a one-page document explaining that, since the early days of the EU, staffing had increased, and that this was the "main factor" determining the increase in pension expenditure in EU institutions.

It continued that the 2004 administrative reform did include a number of changes aimed at encouraging the EU staff to work longer. These included raising the minimum retirement age for civil servants from 60 to 63.

Additional pension rights were given to staff members remaining in the service after reaching the minimum retirement age. It must also be noted that working EU staff members have deducted from their salaries a pension contribution intended to cover a third of the cost of their eventual pensions.

There are 17,600 retirees in all.

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