By Martin Banks - 23rd November 2010
Staff are being encouraged to work more and longer
Maros Sefcovic
EU commissioner Maroš Šefcovic has made a robust defence of the pension provision for thousands of EU civil servants.
His comments come at a time when increasing attention is being paid to the pensions issue with employees in some member states, including France, told they will have to work longer before they can retire.
Šefcovic, responsible for interinstitutional affairs and administration, conceded that there had been an increase in pension expenditure in the EU institutions.
But he said there were particular reasons for this and that EU staff were being "encouraged to work more and longer."
The official was responding to a written parliamentary question about EU pension payments from UK Tory MEP Vicky Ford.
Ford said, "This year's EU budget proposes a 6.89 per cent increase in the EU's pension payments, from €1.192m to €1.274m."
Ford pointed out that the commission's green paper 'Towards adequate, sustainable and safe European pension systems' "lists actions that member states have taken to address unsustainable pensions."
These include encouraging more people to work more and longer, increasing pensionable age, encouraging older workers to stay in the labour market and penalising earlier retirement.
Ford, her group's economic and monetary affairs spokesman, asked which of the steps "have been or will be taken by the commission to ensure that the EU's own pension schemes are sustainable?"
In his reply, Šefcovic said, at present, the situation of the European institutions' pension scheme cannot be fully compared to that of the member states.
"When European institutions were established 50 years ago, they had only a small number of staff members and there were no retired civil servants at all in the beginning, and these numbers remained low for a number of years.
"However, growing numbers of staff have been recruited since then and are reaching the retirement age.
"The number of pensioners is thus gradually increasing from year to year until it stabilises in the future. This is the main factor determining the increase in the pension expenditure in the EU institutions."
He said the EU institutions underwent an administrative reform six years ago which included a number of changes to the pension scheme.
"The main changes are aimed at encouraging the EU staff to work more and longer," he said.
The changes include raising the minimum retirement age for civil servants recruited after 1 May 2004 from 60 to 63 years.
"Staff recruited before 1 May 2004 are subject to transitional provisions and for them the minimum retirement age varies from 60 to 63 years depending on their age and the years of service," he said.
He added, "A limited possibility was created to work until 67 if an official requests to do so and if the request is justified by the interest of the service.
"The annual rate of acquired pension rights was reduced from two per cent to 1.9 per cent for civil servants recruited after 1 May 2004.
"Consequently, staff have to work longer in order to reach the maximum pension. Also, the rights acquired after 1 May 2004 do not give entitlement to the application of correction coefficients related to the cost of living in the pensioner's country of residence as was the case before the reform.
"For civil servants who are 55 years of age or above and who want to retire before reaching the minimum retirement age, the annual pension rights which they already acquired are reduced by 3.5 per cent for every year before the one when they reach the minimum retirement age.
"The number of officials who can benefit from this advantageous possibility is limited to 10 per cent of the number of officials in all institutions who retired the previous year."
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