Annexes to SEC(2011)1438 - COMMISSION STAFF WORING PAPER Eurostat report on the 2011 update of the 2010 actuarial assessment of the_Pension Scheme for European Officials (PSEO) accompanying the document: Adjustment, from 1 July 2011, of the rate of contribution to the pension scheme of officials and other servants of the EU - Main contents
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dossier | SEC(2011)1438 - COMMISSION STAFF WORING PAPER Eurostat report on the 2011 update of the 2010 actuarial assessment of the_Pension Scheme for ... |
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document | SEC(2011)1438 ![]() |
date | November 24, 2011 |
5.5........ Independent examination................................................................................................. 9
6........... Relevant figures for calculating the contribution rate........................................................ 11
7........... Summary of main variables............................................................................................ 12
8........... Demographic parameters.............................................................................................. 14
8.1........ Reference population.................................................................................................... 14
8.2........ Assumed retirement age................................................................................................ 17
8.3........ Invalidity table.............................................................................................................. 18
8.4........ Life table of healthy persons.......................................................................................... 19
8.5........ Life table of invalids...................................................................................................... 19
8.6........ Average age difference between men and women.......................................................... 19
8.7........ Probability of being married for men and women........................................................... 20
9........... Economic parameters................................................................................................... 20
9.1........ Real Discount Rate (RDR)............................................................................................ 20
9.2........ General Salary Growth (GSG)...................................................................................... 21
9.3........ Individual Salary Progression (ISP)............................................................................... 22
9.3.1..... Population groups......................................................................................................... 22
9.3.2..... ISP rates...................................................................................................................... 23
9.4........ Turnover...................................................................................................................... 23
9.4.1..... Turnover definition........................................................................................................ 23
9.4.2..... T1. Turnover due to contract validity expiration............................................................. 23
9.4.3..... T2. Turnover due to voluntary and unexpected losses.................................................... 24
9.5........ Loading factor for orphan’s and divorced spouse’s pension........................................... 25
10......... Annuities...................................................................................................................... 25
11......... Impact of changes in demographic and economic parameters in the calculation of the pension contribution rate 26
1. Introduction
Article 83a and Annex XII of the Staff Regulations set out rules to guarantee the actuarial balance of the PSEO (Pension Scheme of European Officials).
Annex XII lays down rules for implementing Article 83a of the Staff Regulations. In particular, it stipulates that:
(1) Eurostat is the authority responsible for the technical implementation of the Annex (see Article 13(1)),
(2) Eurostat is to be assisted by one or more qualified independent experts in carrying out the actuarial assessments (see Article 13(2)),
(3) each year on 1 September, Eurostat is to submit a report on the assessment and updating referred to in Article 1 of the Annex (see Article 13(3)),
(4) any questions of methodology for the implementation of the Annex are to be dealt with by Eurostat in cooperation with national experts from the relevant departments of the Member States and the qualified independent expert or experts (see Article 13(4)).
Eurostat has drawn up the present report in accordance with the above legal requirements. The second five-yearly actuarial assessment of the pension scheme of the European civil service was carried out in 2008. This report sets out the results of the 2011 update of this 2008 actuarial assessment, based on the population of European officials as at 31 December 2010.
The report provides the information needed by the Commission to propose, if necessary, changes to the staff contribution rate in order to ensure the balance of the scheme.
For any further information concerning this report, please contact Eurostat:
Eurostat, Unit C-6 Secretariat BECH – A2/018 L-2920 Luxembourg Tel.: (352) 4301-34191
2. Contribution rate
The 2011 actuarial assessment of the Pension Scheme for European Officials (PSEO) indicates that, in order to guarantee the balance of the scheme, the contribution rate necessary to finance one third of the benefits payable would be 11.0% of the basic salary (or invalidity or termination of service allowance). This actuarial assessment has been made in accordance with the agreed methodology. It was discussed by the Article 83 Working Group at the 27 June 2011 meeting and has been reviewed and approved by independent actuarial consultants.
The calculated contribution rate indicated above (11.0%) is one third of the ratio between the total of the service cost (1 206 million Euros) and the total of annual basic salaries (3 638 million Euros) (see Appendix I, Tables I and II). This rate is lower (-0.6%) than the one calculated in 2010 (11.6%). This change is analysed in point 4.
3. Update of the assessment of the actuarial balance
The PSEO was assessed on the basis of the computation method set out in Chapter 2 of Annex XII of the Staff Regulations[1].
The following elements have been considered in the 2011 assessment:
(5) the population of contributing members at 31.12.2010,
(6) the update of the General Salary Growth Rate (GSG) (0,5% in 2010 and 0,3% in 2011 (see pages 4 and 9 of doc 20110627 Art.83_06),
(7) the update of the Individual Salary Progression rates (ISP) and
(8) the update of the Invalidity Table.
More details about these updates are given in Appendix I.
4. Analysis of the contribution rate change
Changes to the pension contribution rate result from the combined effect of changes in the population structure and in actuarial assumptions. The separate impact of these changes in the officials' contribution rate change is not easy to determine due to their interdependency, although analysis of the actuarial assumptions allows a better understanding of the changes in contribution rate and its sensitivity to the various actuarial assumptions.
As indicated in point 2, the official’s pension contribution rate calculated this year (11.0%) is lower than the one calculated in 2010 (11.6%). This decrease (-0.6 percentage points) is mainly explained by the combined effect of the population evolution and actuarial assumptions update, the most important of which being the decrease of the GSG from 0.5% in 2010 to 0.3% in 2011. The Real Discount Rate (RDR) remained the same as in the 2010 assessment (2.8%).
Changes in actuarial assumptions and their impact on the contribution rate were presented in detail at the 27 June 2011 meeting of the Article 83 Working Group (see document 20110627 Art83_06). Further details are given in Appendix I.
4.1. Real Discount Rate (RDR)
The RDR (2.8%) used in 2011 calculation is the same as in the 2010 assessment. Consequently no effect is observed this year on the pension contribution rate.
4.2. General Salary Growth (GSG)
The GSG (0.3%) used in the 2011 calculation is lower than the one used for the 2010 assessment (0.5%). Consequently a lowering effect was observed this year on the pension contribution rate (-0.61 percent points).
4.3. Individual Salary Progression (ISP)
ISP rates have been updated to take account of the observed promotion rates from 2005 to 2010 in accordance with methodology agreed at the June 2006 Art83 WG meeting. This update is further explained in Appendix I.
The ISP update has no significant impact (-0.01 percent points) on the pension contribution rate.
4.4. Invalidity table
The table of probabilities of becoming an invalid was updated, with the most recently observed invalidity rates (2010). The new invalidity table (2010 EU Invalidity table) is thus an average of 5 years invalidity rates (2006 – 2010). The use of this updated table has had an impact of around -0.05 percentage points on the pension contribution rate. This impact is explained by the fact that the probability of becoming invalid by age slightly decreased (see further explanation in appendix I, point 8.3).
4.5. Life table (healthy persons)
According to the Staff Regulations the life table may be updated only on the occasion of the five-yearly actuarial assessment[2]. The current ICSLT (International civil servants life table) was updated on the occasion of the 2008 actuarial assessment and this table, 2008 ICSLT, must be used at least until the next five-yearly assessment in 2013.
The life table used in the 2011 calculation is thus identical to that used in the 2010 calculation and there is no impact on the calculated contribution rate due to a change in the table.
4.6. Life table (invalid persons)
It is normal actuarial practice to consider life expectancy of invalids as slightly shorter than that of healthy persons (e.g. EUROCONTROL applies the mortality rate corresponding to a healthy person 3 years older than an invalid’s age). Eurostat has applied this actuarial practice since the 2008 pension assessment.
Since the life table used in the 2011 calculation is identical to that used in the previous calculation, there is no impact on the calculated contribution rate due to a change in the table.
4.7. Assumed retirement age
Assumed retirement ages by staff category groups were first estimated for the 2004 pension assessment, and were presented at the June 2004 meeting of the Article 83 Working Group. As provided for in paragraph 3 of Article 83(a) of the Staff Regulations these assumed retirement ages were checked in 2008, on the occasion of the second five-yearly actuarial assessment, and no change was proposed for the following five-year period.
The assumed retirement ages are therefore identical to those used since 2004 and there is no impact on the calculated contribution rate due to a change in assumed retirement age.
4.8. Average difference between men and women
The average age difference between married men and women (3 years) that has been applied since 2004 in actuarial calculations was checked in 2008, and found to be supported by observation. The test showed that on average married men are 3.01 years older than their partners and married women 3.18 years younger than their partners.
Since the average difference in age is unchanged, there is no impact on the calculated contribution rate due to a change in this age difference.
4.9. Probability of being married for men and women
The probabilities of being married for officials and ex-officials aged more than 59 were reassessed in 2008, and updated probabilities were presented at the June 2008 meeting of the Article 83 Working Group. No change was proposed at the 27 June 2011 meeting of the Article 83 Working Group.
Since the probability of being married is unchanged, there is no impact on the calculated contribution rate from a change in probabilities of being married for men and women.
4.10. Loading factor for orphan’s and divorced spouse’s pension
Current actuarial practice is to add 10% to a payable reversion pension to allow for the pension payable to orphans after the death of the surviving spouse (or of the official if there is no surviving spouse) and any pension payable to divorced spouses. Eurostat estimates that the impact of this factor on the contribution rate is minor and does not consider an update to this assumption necessary at the present time.
Since the loading factor for pensions payable to orphans and divorced spouses is unchanged, there is no impact on the calculated contribution rate due to a change in the loading factor.
4.11. Methodological changes
No methodological changes have been implemented in the occasion of the 2011 pension assessment, thus no impact on the pension contribution rate is observed.
4.12. Population change effect
The yearly population change has had a very low impact (+0.07 percent points) on the pension contribution rate calculated this year. A more reliable observation of the effect of change in population on the pension contribution rate can only be made on a cumulated basis over a longer period of time.
5. Computation system 5.1. Variables used in the assessment
In general, two kinds of variables are used in the actuarial calculation:
Parameters: These are values mainly linked to the application of the Staff Regulations. These values change according to certain conditions related to the individual situation of each official (e.g. the annual accrual rate is 1.9% for staff recruited from 01.05.2004 and 2% for those recruited before this date). These values can be clearly established.
Actuarial assumptions: These are values that are not known and cannot be established exactly, such as the invalidity table, the ISP table, the probability of being married at the retirement date, the loading factor for orphans and divorced spouses. The values of these actuarial assumptions are estimated in accordance with general actuarial practices. They were discussed with national experts from the Member States at the annual meetings of the Article 83 Working Group, and reviewed by independent actuarial consultants.
A summary of the main variables used (parameters and actuarial assumptions) is given in Appendix I, Tables III and IV.
5.2. Demographic parameters
The reference population is made up of contributing members of the PSEO including:
(9) active officials,
(10) members whose pension contribution is optional (e.g. officials who have taken leave on personal grounds or parental leave),
(11) invalids who receive an invalidity allowance under Article 78 of the Staff Regulations,
(12) Beneficiaries of an allowance for termination of service.
54 885 contributing members were recorded at 31.12.2010, which represents a net increase of 662 participants compared to the previous year (at 31.12.2009, 54 223 were used in the 2010 actuarial assessment).
This increase in the population is explained by the recruitment of temporary staff, contract staff, and parliamentary assistants, whereas in the same period (31.12.2009 to 31.12.2010) the number of officials and non-active staff[3] slightly decreased.
The contributing members at 31.12.2010 are:
(13) 34 739 officials,
(14) 8 572 temporary agents,
(15) 9 366 contract staff,
(16) 1549 parliamentary assistants,
(17) 659 non-active staff.
A breakdown of the reference population by type of contributing member and by Institution or Agency is included in Appendix I, Tables VI to VIII.
5.3. Economic parameters
In accordance with Articles 10 and 11 of Annex XII to the Staff Regulations, the Real Discount Rate (RDR) and the General Salary Growth (GSG) are calculated in the 2011 update as the average of the corresponding rates for the 12 preceding years (for more information see Appendix I to this report, points 9.1 and 9.2 and Tables XIII and XIV).
The value of the RDR is 2.8% (the same value as that used in the 2010 assessment) and that of the GSG is 0.3% (0.5% was the value used in the 2010 assessment). Finally, an updated ISP table has been used (see Appendix I, point 9.3).
5.4. Technical implementation of Annex XII to the Staff Regulations
Technical questions raised by the implementation of Annex XII are dealt with by Eurostat in cooperation with national experts from the relevant departments of the Member States participating in the Working Group on Article 83 of the Staff Regulations.
Eurostat also exchanges relevant information on actuarial issues with international organisations such as the JPAS (Joint Pensions Administrative Section of the Coordinated Organisations), EPO (European Patent Office) and EUROCONTROL.
5.5. Independent examination
In accordance with Annex XII, Article 13, of the Staff Regulations, Eurostat was assisted by a qualified independent expert with regard to the methodological implementation and the definition and calculation of the corresponding actuarial assumptions.
The independent expert then conducted an actuarial examination of the contribution rate calculated by Eurostat. This examination consisted in confirming the relevance and reliability of the actuarial processes and assumptions used in accordance with the methodology described in Annex XII to the Staff Regulations.
For the aspects not described explicitly in Annex XII, the independent expert checked their compliance with generally accepted actuarial practices. Concerning actuarial assumptions, the independent expert carried out investigations to ensure that the underlying data provided by Eurostat were used correctly.
A summary of the assessment by the independent expert is included in Appendix II to this report.
APPENDIX I - COMPUTATION
6. Relevant figures for calculating the contribution rate
Table I. Breakdown of the contribution rate
Table II. Service cost and total amount of annual basic salaries
7. Summary of main variables
The following tables show the values of the main parameters (see Table III) and actuarial assumptions (see Table IV). Please note that the tables only present an overview of the main variables and are not exhaustive. Please refer to the Staff Regulations and their annexes for precise and complete information.
Table III. Parameters used in the actuarial assessment
Table IV. Actuarial assumptions
Many of these actuarial assumptions are explained in the following points. Some of them have changed compared to the 2010 actuarial assessment. The following table summarises these changes:
Table V. Changes in actuarial assumptions
8. Demographic parameters 8.1. Reference population
Annex XII, Article 1 of the Staff Regulations stipulates that the actuarial assessment shall be carried out in each year n, on the basis of the population of active members of the PSEO at 31 December of the previous year (n-1). Moreover, Article 9 of Annex XII provides that the population of participants in the scheme is to be collected annually by the Commission using information received from the different institutions and agencies whose staff are members of the scheme.
In accordance with these rules, the reference population is taken to be the staff at 31 December 2010 of the 51 institutions and agencies (49 were recorded at 31 December 2009) whose officials are members of the PSEO.
Table VI. Institutions and Agencies in the PSEO
As approved by the Article 83 Working Group at its meeting of 7 June 2004, the term “active members of the PSEO” is considered in the wide sense to be synonymous with “contributing members of the PSEO”. Consequently, the reference population includes not only officials in “active employment” but also officials in one of the other administrative statuses set out in Article 35 of the Staff Regulations, plus invalids who receive an invalidity allowance and beneficiaries of an allowance for termination of service.
Personnel data were collected from the NAP[4] (New Application for Pay), from Sysper2[5] and directly from institutions and agencies, and imported into the Eurostat database. The data were checked to ensure a high level of quality. The actuarial assessment is based on the output from the Eurostat database at the reference date.
Table VII. Reference population by administrative status
This increase in the population is mainly explained by the recruitment of temporary staff, contract staff and the increase of parliamentary assistants.
Table VIII. Reference population by institution or agency
Figure I. Reference population by age
8.2. Assumed retirement age
As stipulated in Article 4 of Annex XII to the Staff Regulations, it is assumed that all retirements will occur at a fixed average age (r). The average retirement age may be different according to the group of staff.
Table IX. Assumed retirement age and Barcelona incentive by age group of officials
Please note that pension incentives (called Barcelona incentive since 2004) are based on acquired pension rights in groups 1 and 2 above (Old Staff Regulations), while they are based on the last basic salary for groups 3 to 5 (New Staff Regulations).
The assumed retirement ages detailed in the two right columns in the table XVI were estimated on the occasion of the 2004 pension assessment and were presented at the June 2004 meeting of the Article 83 Working Group. These assumed retirement ages have been used in pension assessments since 2004.
8.3. Invalidity table
A first invalidity table (2004-EU Invalidity table) was used in the 2004 assessment. According to decision taken at the Art83 Working Group at its 26th June 2007 meeting, this table must be updated each year to take account of the evolution of beneficiaries of an invalidity allowance (the new category of population according to the new Staff Regulation in force from the 1st May 2004). A moving average of 5 years of invalidity observation is used.
The number of invalids recorded in 2004 (103) has been replaced by the number recorded in 2010 (105) in the moving 5 years average of invalidity observations. Thus the total of invalids in this 5-year period decreased from 510 to 483 invalids.
The following table shows the number of invalids from 2006 to 2010.
Table X. Invalids by year
The decrease in the number of invalids, in conjunction with the increase of the active population makes the probability of becoming an invalid lower than in the past.
The 2006 to 2010 invalidity observations have been used to update the invalidity table by sex (EU-2011 Invalidity table). The following table is an extract from the unisex version of the table. The unisex version is only used for presentation; the complete table by sex is used in computation.
Table XI. EU-2010 Invalidity Table (Extract)
8.4. Life table of healthy persons
The life table used for the calculation was updated in 2008 (2008 ISCLT table) on the occasion of the five-yearly assessment of the actuarial balance of the pension scheme. The methodology used to set up this life table was presented to the Article 83 Working Group at the 27 June 2008 meeting (document 20080627 Art83_05, available from Eurostat). The 2008 ISCLT life table must be used at least until the next five-yearly assessment in 2013.
Consequently, the 2008 ICSLT has been used in the 2011 pension assessment.
The following table is an extract from this table:
Table XII. 2008 ICSLT
8.5. Life table of invalids
It is normal actuarial practice to consider life expectancy of invalids as slightly shorter than that of healthy persons (e.g. EUROCONTROL applies the mortality rate corresponding to a healthy person 3 years older than an invalid’s age). This approach cannot be confirmed in the case of European civil servants as the number of invalids is too small. Eurostat has applied this actuarial practice since the 2008 pension assessment.
The use of this approach makes hardly any change in the contribution because the probability of an active staff member becoming invalid is very small.
The implementation of this approach in the 2008 pension assessment had a negligible impact, close to 0 percentage points, on the pension contribution rate.
8.6. Average age difference between men and women
The average age difference between married men and women (3 years) that has been applied from 2004 in actuarial calculations should be used in future assessments. The result of a test based on population from 2004 to 2007 confirmed this actuarial assumption. The test showed that on average married men are 3.01 years older than their partners and married women 3.18 years younger than their partners.
8.7. Probability of being married for men and women
In 2008 Eurostat analysed the recent population of officials and ex-officials older than 59 years and calculated the probability of them being married. The probabilities found for men and women are: 0.84 for men (0.8 to one decimal place) and 0.38 for women (0.4 to one decimal place).
These updated probabilities have been used in yearly pension assessments since 2008.
9. Economic parameters 9.1. Real Discount Rate (RDR)
Annex XII, Article 10 of the Staff Regulations provides that:
1. The interest rates to be taken into consideration for the actuarial calculations shall be based on the observed average annual interest rates on the long-term public debt of Member States as published by the Commission. An appropriate consumer price index shall be used to calculate the corresponding interest rate net of inflation as needed for the actuarial calculations.
2. The effective annual rate to be taken into consideration for the actuarial calculations shall be the average of the real average interest rates for the 12 years preceding the current year.
Consequently, real discount rates (RDR) from 1999 until 2010 have to be used in the 2011 assessment of the PSEO.
Nominal discount rate (NDR): 5.0%. This is the average of 1999 to 2010 nominal rates of euro area zero-coupon (government bonds) yield with a maturity of 21 years, 21 years being the duration of the scheme and the rate in 2010 as produced by the ECB being 5.0%.
Inflation rate (IR): 2.2%. This is the average of 1999 to 2010 of an appropriate consumer price index; the EU HICP in 2010 being 2.1%.
Real discount rate (RDR): 2.8% (it was the same in the assessment at 31.12.2009). It is the average of 1999 to 2010 real discount rates; the latest being calculated as "100*(100+NDR)/(100+IR)-100)". This RDR (2.8%) will be used in the final assessment of the PSEO to be published by 1 September 2011.
Table XIII. Real Discount Rate (RDR)
9.2. General Salary Growth (GSG)
As for the discount rate, Annex XII contains specific rules for calculating General Salary Growth. Article 11 stipulates on the one hand that the annual change in salary scales to be used for the actuarial calculations must be based on the specific indicator (SI) and on the other hand that the effective annual rate is the average of the net SIs for the 12 years preceding the current year.
As the net SI applied in 2010 is -2.2%, the 12-year moving geometric average from 1999 to 2010 (GSG) is 0.3% (a value of 0.5% was used in the 2010 assessment).
Table XIV. General Salary Growth
The decrease of the GSG (0.3% used in this assessment instead of 0.5% used in the assessment at 31.12.2009) makes the contribution rate decrease by 0.61 percentage points if other assumptions remained stable.
9.3. Individual Salary Progression (ISP) 9.3.1. Population groups
The Individual Salary Progression (ISP) refers to the salary increase due to the career advancement of EU officials, i.e. promotions and seniority steps.
The ISP has a significant impact on the contribution rate, though less than that of the RDR and GSG.
With the introduction of the new Staff Regulations on 1.5.2004, the career progression of EU officials has been completely reviewed. Annex XIII of these Staff Regulations includes transitional measures which made the determination of this assumption quite complicated.
The active population is divided into homogeneous groups according to their characteristics:
(1) Officials recruited before 01.05.2004,
(2) Officials recruited from 01.05.2004 onwards,
(3) Temporary staff,
(4) Contract staff,
(5) Parliamentary assistants.
The weight of each of these new groups in the total population is shown in Table XV below.
Table XV. Weight of the active population by ISP group at 31.12.2010
9.3.2. ISP rates
The following table shows ISP rates used in the 2010 and 2011 assessments:
Table XVI. Average ISP rates by group of population
ISP rates in the table above are the average of ISP rates weighted by the population in each group. These average rates are calculated for publication purposes only, the detailed rates by grade and years to retire being used in computation.
ISP of officials changed slightly in comparison with these used in the assessment at 31.12.2009. This change has no significant impact (-0.01 percent points) on the pension contribution rate.
9.4. Turnover 9.4.1. Turnover definition
Active members of the PSEO (officials, temporary staff, contract staff and parliamentary assistants) will definitely stop activity one day for several reasons and eventually leave the pension scheme.
To facilitate computation, turnover has been divided in two types:
§ Turnover due to end of contract validity (T1),
§ Turnover due to voluntary and unexpected losses (T2). This mainly concerns resignation before the end of a contract, dismissal for incompetence and disappearance.
Losses due to other unexpected reasons (invalidity and death) and voluntary decisions (mainly secondment, retirement, non active status according to Article 41 of SR, leave on personal grounds, leave for military service, parental or family leave) are excluded from the definition of turnover (these causes of leaving are already computed in another way).
9.4.2. T1. Turnover due to contract validity expiration
Two assumptions have been used:
§ The ratio of indefinite contracts to fixed-length contracts.
§ Average duration of contracts in years.
The following table shows the rates of both assumptions above by contract type, these rates being based on observations:
Table XVII. T1 rates by contract types
9.4.3. T2. Turnover due to voluntary and unexpected losses
The number of active staff who left institutions due to resignation, dismissal for incompetence and disappearance in the year N has been compared to the active population in the year N-1 to obtain the yearly T2 by contract type. The rate to be used in the actuarial calculation has been computed as the average of the losses in the last four years (2006 to 2010) compared to active staff in 2005 to 2009.
Table XVIII. T2 rates by contract types
The change of turnover rates T1 and T2 this year have no significant impact (-0.01 percent points) on the pension contribution rate.
9.5. Loading factor for orphan’s and divorced spouse’s pension
Current actuarial practice is to add 10% to a payable reversion pension to allow for the pension payable to orphans after the death of the surviving spouse (or of the official if there is no surviving spouse) and any pension payable to divorced spouses. Eurostat estimates that the impact of this factor on the contribution rate is minor and the same assumption has been used in the 2011 actuarial assessment.
10. Annuities
Articles 6 to 8 of Annex XII to the Staff Regulations refer to the annuities used in the calculation. The values of these annuities according to age are presented below. These were calculated by sex and then aggregated by weighted averages only for presentation in this report.
The table below was calculated using:
(6) the Real Discount Rate (RDR) from Table XIII,
(7) the General Salary Growth (GSG) from Table XIV,
(8) an assumed retirement age (r) equal to 64 years of age for officials younger than 35 on the reference date (31.12.2003) and equal to 63 years of age for the others,
Table XIX. Some annuities in accordance with Articles 6 to 8 of Annex XII to the Staff Regulations
11. Impact of changes in demographic and economic parameters in the calculation of the pension contribution rate
The yearly change in the calculated contribution rate is explained by the combined effect of changes in population, methodology, assumptions and other variables used. This time the change: -0.6 percent points (11.0% is obtained in the present assessment instead of 11.6% in the assessment at 31.12.2009) is mainly explained by the decrease of the GSG. The following table summarise the impact of these changes.
Table XX. Explanation of the change in calculated pension contribution rates at 31.12.2009 and 31.12.2010
APPENDIX II – INDEPENDENT EXAMINATION
An independent expert conducted an actuarial examination of the contribution rate calculated by Eurostat. This examination confirmed the relevance and reliability of the actuarial processes and assumptions used in accordance with the methodology described in Annex XII to the Staff Regulations. For the elements not described explicitly in this Annex, the independent expert checked their compliance with generally accepted actuarial practices. Regarding the actuarial assumptions, the independent expert carried out tests to ensure that the underlying data provided by Eurostat were used correctly.
The independent expert report concluded that:
"… as an independent expert, has conducted an actuarial examination of the 2011 update of the actuarial assessment of the pension scheme referred to in Article 83a (3) of the new Staff Regulations for which Eurostat endorsed the technical responsibility towards the Commission according to the Annex XII “Rules for implementing Article 83a of the Staff Regulations”. This examination consisted in confirming the relevance and the reliability of the actuarial processes and assumptions used in accordance with the methodology described in Annex XII to evaluate the contribution rate of officials.
For the aspects explicitly mentioned in Annex XII, we did not detect any elements likely to cast doubt that the calculations determined by Eurostat are not compliant with the rules of Annex XII
For the aspects not described explicitly in Annex XII, we have checked their compliance with the generally accepted actuarial practices and we did not detect any significant difference with the methodology and the assumptions we would have chosen ourselves to perform the calculations.
… has no reason to doubt that the official’s contribution rate (11.0%) calculated by Eurostat is a sufficiently accurate estimate of the reality…".
The complete report provided by the independent expert on the actuarial examination of the contribution rate is available from Eurostat.
[1] The methodology is further explained in a separate document available at Eurostat
[2] Article 9(2) of Annex XII to the Staff Regulations.
[3] Non active status: (Article 41): retirement in the interests of the service (art.. 50), termination of service under special measures ("dégagement"), invalids who receive an invalidity allowance (art. 78)
[4] The NAP application is a centralised database that has been created to produce the monthly salary and pension forms for all institutions and agencies. This database contains a large part of the personnel data, particularly amounts paid and pension contributions.
[5] Sysper2 is the IT system to manage personal data of the Commission staff. It is also used by PMO (Pay Master Office) to manage pensions and transfers of pension rights of the staff of EU institutions and agencies