The European Commission published a new report concerning pensions: balance the pension scheme for EU officials
The aim of this interim report is to present an overview of the implementation of the rules for keeping in balance the Pension Scheme for EU Officials (PSEO) in the period 2014-2018. Those rules are laid down in Article 83a of the SR and Annex XII thereto…
Legal basis of PSEO
Pursuant to Article 83 of the Staff Regulations:
-The benefits paid under the pension scheme are to be charged to the Union budget;
-Member States are to jointly guarantee the payment of the benefits; and
-Officials are to contribute one third of the cost of financing the scheme.
Article 83a provides that the balance of the pension scheme shall be ensured by the pensionable age and the rate of contribution to the scheme. It also lays down procedures for annual and five-yearly updates of the rate of contribution to the pension scheme. Annex XII to the SR sets out the actuarial rules for computing the contribution rate in order to ensure that the scheme is in balance.
Notional (virtual) fund principle
The PSEO is a notional (virtual) fund with defined benefits, in which staff’s contributions serve to finance their future pensions. Although there is no actual investment fund, the amount that would have been collected by such a fund is considered to have been invested in the Member States’ long-term bonds and is reflected in the pension liability that is registered in the annual accounts of the European Union. Member States jointly guarantee the payment of the benefits pursuant to Article 83 of the Staff Regulations and Article 4(3) of the Treaty on European Union.