Explanatory Memorandum to COM(2014)462 - Adjustment, from 1 July 2011, 1 July 2012 and 1 July 2013, of the rate of contribution to the pension scheme of officials and other servants of the EU - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2014)462 - Adjustment, from 1 July 2011, 1 July 2012 and 1 July 2013, of the rate of contribution to the pension scheme of officials ... |
|---|---|
| source | COM(2014)462  |
| date | 16-07-2014 |
Grounds for and objectives of the proposal Following the entry into force of Regulation 1023/2013 amending the Staff Regulations with effect from 1st January 2014, this proposal aims to settle the outstanding issues as regards the adjustment of the rate of contribution to the pension scheme for the years 2011, 2012 and 2013, with a view to putting an end to a pending case before the Court of Justice (C-453/12) and avoiding further litigation on this matter.
General context Under Article 83a(3) of the Staff Regulations i, on the occasion of the five-yearly actuarial assessment in accordance with Annex XII and in order to ensure the balance of the scheme, the Council shall decide on the rate of contribution and any change to the pensionable age. Under Article 83a i of the Staff Regulations, each year the Commission shall present to the Council an updated version of the actuarial assessment, in accordance with Article 1(2) of Annex XII. Where it is shown that there is a gap of at least 0,25 points between the rate of contribution currently applied and the rate required to maintain actuarial balance, the Council shall consider whether the rate should be adapted, in accordance with the arrangements laid down in Annex XII. Under Article 13 of Annex XII to the Staff Regulations, Eurostat has submitted the reports required under the above provisions, which determine the rates of contribution required to maintain actuarial balance of the pension scheme for 2011, 2012 and 2013. Pursuant to Article 19 of Annex XIII to the Staff Regulations, as last amended by Regulation No 1023/2013 of the European Parliament and of the Council, Article 83a and Annex XII thereto, as in force before 1 November 2013, shall continue to be in force exclusively for the purpose of any adjustment required to comply with the judgment of the Court of Justice of the European Union under Article 266 of the TFEU on the application of those provisions.
Contents
Consultation of interested parties
Methods of consultation used, main sectors covered and general profile of respondents The elements of the proposal have been discussed with the staff representatives in accordance with the appropriate procedures.
Summary of replies received and the way in which they have been taken into account The proposal takes account of the opinions of the parties consulted.
Collection and use of expertise
The calculation of the pension contribution rate has been validated by an actuarial expert (external consultant).
Impact assessment The purpose of the proposal is to adjust the rate of contribution to the pension scheme of officials and other servants of the European Union for the years 2011, 2012 (yearly adjustments) and 2013 (five-yearly adjustment) in order to maintain the actuarial balance of the scheme. The legislation as it was in force until the end of 2013 permitted no alternative.
In order to comply with the judgment of the Court of Justice in Case C-63/12, the European Parliament and the Council have adopted Regulations No 422/2014 and No 423/2014 of 16 April 2014, respectively adjusting with effect from 1 July 2011 and from 1 July 2012 the remuneration and pensions of officials and other servants of the European Union and the correction coefficients applied thereto. This was a part of a global approach to settle the disputes regarding the 2011 and 2012 adjustments of remuneration and pensions and the 2011 adjustment of the pension contribution, which resulted in an adjustment of 0 % for 2011 and 0,8 % for 2012.
These adjustments of the salaries and pensions of the EU staff require the respective retroactive adjustment of the rate of contribution to the pension scheme for the year 2013. Moreover, the purpose of Article 19 of Annex XIII to the Staff Regulations, as last amended by Regulation (EU, Euratom) No 1023/2013 of the European Parliament and of the Council, is to enable the institutions to take the necessary measures to settle their disputes concerning the 2011 and 2012 adjustments of remuneration and pensions and the 2011 adjustment of the pension contribution in compliance with a judgment of the Court of Justice, taking due account of the legitimate expectation of staff that the institutions are to decide each year on the adjustment of their remuneration and pensions and the rate of contribution to the pension scheme.
In accordance with Article 13 of Annex XII to the Staff Regulations, Eurostat submitted reports on the 2011, 2012 and 2013 actuarial assessments of the pension scheme updating the parameters referred to in that Annex. According to these assessments, the rate of contribution required to maintain actuarial balance of the pension scheme is 11,0 % of the basic salary for 2011[2], 9,9 % of the basic salary for 2012[3] and 10,6 % of the basic salary for 2013 i. In the interests of actuarial balance of the pension scheme of officials and other servants of the European Union, the rate of contribution should therefore be adjusted to:
· 11,0 % with effect from 1 July 2011;
· 10,0 % with effect from 1 July 2012[5]; and
· 10,6 %.with effect from 1 July 2013.
Furthermore, under Article 83a(3) of the Staff Regulations, on the occasion of the five-yearly actuarial assessment in accordance with Annex XII and in order to ensure the balance of the scheme, the Council shall decide on the rate of contribution.
The 2013 actuarial assessment of the pension scheme constitutes such a five-yearly assessment, which requires the Commission to carry out a full assessment of the scheme for this reference period in order to ensure that the applied pension contribution rate maintains the pension scheme in actuarial balance. Such a five-yearly assessment necessarily presupposes the fixing of the pension contribution rate for 2011, which has not yet been definitely decided by the Council, and the re-adjustment of the 2012 pension contribution rate as indicated in Recital i of Council Regulation No. 1331/2013 of 10 December 2013.
The yearly adjustment of the rate of contribution to the pension scheme for 2011 under Article 83a i SR is subject to an action pending before the European Court of Justice (C-453/12). Nevertheless, upon a request from the Commission the Court has suspended this case in order to leave a room for the parties to reach a global legislative solution of all issues related to the pension contribution rate, following its judgment in case C-63/12 on the 2011 annual adjustment of remuneration and pensions, as foreseen in Article 19 of Annex XIII to the Staff Regulations. The current Commission proposal has the objective of paving the way for a settlement in case C-453/12 and of avoiding further litigation relating to the old Staff Regulations.
Therefore, in order to ensure that the applied pension contribution rate maintains the pension scheme in actuarial balance for the reference 5-yearly period and to enable the institutions, as a part of the global approach to settle the disputes, to take the necessary measures as regards the adjustment of the pension contribution rate in compliance with the principles of sincere cooperation among institutions, and taking due account of the legitimate expectation of staff, the Commission submits a proposal for a Council Regulation, adjusting from 1 July 2011, 1 July 2012 and 1 July 2013, the rate of contribution to the pension scheme of officials and other servants.
The impact on revenue of the adjustment to the rate of contribution to the pension scheme is detailed in the financial statement annexed hereto.