By Nicola Smith - 17th November 2003
The EU’s financial watchdog – the Court of Auditors – is expected to criticise the European Parliament's pensions scheme and the abuse of MEPs’ secretarial allowances.
Court President Juan Manuel Fabra Valles will present the annual report for 2002 on Monday evening behind the closed doors of the parliament’s budgetary control committee in Strasbourg.
The report, seen by EUpolitix, questions the “legal framework” of an additional MEP pension fund and the “actuarial deficit in the scheme.”
The court stresses “the need to clarify the respective financial responsibilities of Parliament and its Members in the rules and operating arrangements of the scheme.”
Under the current parliamentary system, MEPs, with the exception of France and Italy, receive the same pension as national MPs but have the opportunity to sign up for a voluntary additional pension fund in the European Parliament.
Critics of the system point to the fact that, although MEPs pay one third of the contribution to the additional fund, the cash comes out of their office allowances and not their own pockets.
While MEPs are told by letter to refund the amount to their allowances, there is no control system to check whether they do or not.
The court’s criticisms follow an audit of the scheme last year and it has now asked the parliament to take action.
Although reformist MEPs have in the past slammed the pension fund for being “unacceptable” in the eyes of the taxpayer, the court may struggle to dent the fund’s strong support within the parliament.
A separate confidential legal opinion from the parliament, seen by this website, states that the court’s observations are “legally incorrect” and that it is “exceeding its powers by encroaching on those of the Community judge”.
But it is not only the parliamentary pension fund that falls under the court’s spotlight.
The court states it has “also found irregular payments of “secretarial expenses” relating to the employment of assistants of members of the European Parliament.
Without detailing the abuses in question, the court urges the parliament to clamp down on existing rules to avoid misuse of the €150,000 annual secretarial fund.
Recent reforms require MEPs to produce contracts of employment for their assistants and tax certificates proving that they are paying them the agreed salary.
But details of the contracts, such as hours and salary levels, remain entirely at the MEPs own discretion, and members are only obliged to register those assistants who are accredited in Brussels.
Critics of the current rules claim the system lacks transparency and is open to accusations of nepotism.
MEPs have come increasingly under fire for keeping their cash within the family by employing their spouses, and not declaring it.
And the European Commission’s own personnel problems do not escape the court’s watchful eye.
The court questions whether the €74 million spent annually on invalidity pensions is really necessary.
While conceding that the matter is “complex”, it adds that “retirement on invalidity grounds is more common in some grades than normal retirement.”
“There is evidence that frustration in the working environment is a significant element in demotivating some staff who are eventually retired on ill-health grounds.”
“Early treatment of medical problems” could give scope for financial savings, concludes the court.
In response, the commission says it has plans to employ psychiatrists to deal with the psychological problems that currently make up 50 per cent of all invalidity cases.
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