The pension fund of the European Parliament is in peril. Vice-President of Parliament Barley urges for a solution "that does not come at the expense of the taxpayer."
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| Roberta Metsola, the President of European Parliament |
With the European Parliament's plenary session in Strasbourg coming up next week, the emphasis is on the Presidency to find a swift solution to the faltering MEPs' voluntary pension fund. The Greens want to introduce an amendment during next Tuesday's budget discussion. According to this, MEPs should voluntarily relinquish their rights against the insolvent fund under specified situations.
According to reports, the voluntary pension fund, which was established between 1990 and 2009, is running a deficit of more than 300 million euros. The fund's luxury pensions, which average more than 2,000 euros a month, can explain the imbalance.
The Greens propose in their proposal that any previous pension fund members who have sufficient pension entitlements from other sources voluntarily renounce payments from the "Voluntary Pension Fund of the European Parliament." In doing so, the Greens go beyond the possibilities for stabilizing the fund now being debated in the European Parliament's Presidency.
The first option, which the Bureau has subsequently abandoned, was to just continue as before. However, if the private-law fund became insolvent, the obligations for the pension payments in question would have reverted to the European Parliament. This would have required taxpayers to step in.
Two alternative solutions, though, are being studied. Given the fund's dire financial state, the prospect of implementing a one-time last payout from the fund's residual assets for all recipients should be investigated. This would allow the beneficiaries to depart the system on their own terms.
Second, in light of recent EU court decisions, several measures could be considered to reduce the current deficit and extend the fund's life as much as possible, including a reduction in the nominal amount of pension entitlements for all beneficiaries, a freeze on annual indexation of pension amounts, and an increase in the retirement age for beneficiaries who have not yet retired.
None of these possibilities, according to CDU MEP Rainer Wieland, are compelling. "We are already past the point where you can stabilize the fund with cuts and adjustments," he explained. "For all legitimate taxpayer concerns," a solution must be found that will also stand up to "massive restrictions" for beneficiaries before the European Court of Justice.
In anticipation of a court judgment on potential lawsuits from MPs and ex-MPs, Wieland stated, "Those affected must be aware that there is a residual risk, and Parliament must be aware as well."
Katarina Barley, Vice-President of the European Parliament, told the German newspaper Tagesspiegel that the fund, which ended in 2009, is "a legacy of Parliament that cannot be glossed over." The deposit logic as well as the promised rewards should have served as a warning to everyone concerned, according to the SPD politician. From today's standpoint, it is no longer rational to support a fund with contributions from members and money from the legislative budget. Members who have left parliament are primarily harmed by the pension fund's probable collapse, she claims. "A legally viable solution that does not come at the expense of taxpayers must now be found," Barley stated.
It was originally unclear if the EU Parliament's Presidency would continue to work with the pension fund in the next week. The EU Parliament's legal office has been charged with investigating other alternatives for the fund's survival.
Source: Albretch Meier/Tagesspiegel