European Parliament proposes to halve payments to MEPs’ pension fund

Featured Sponsor

Store	Link	Sample Product
UK Artful Impressions	Premiere Etsy Store

The European Parliament is proposing to halve payouts from a gold-plated pension scheme used by nearly 1,000 former and current members, including Brexiter Nigel Farage and France’s far-right leader Marine Le Pen.

Senior MPs opted on Monday to cut a €310million deficit by raising the retirement age from 65 to 67 and ending the automatic revaluation of benefits with inflation, which would halve pensions nominal, said the parliamentary authorities.

The measures – which have yet to be formally adopted – are expected to reduce the deficit to 86 million euros.

The special voluntary scheme for MEPs offers beneficiaries a pension pot of approximately €375,000 per person on average. Members such as Farage, British Northern Ireland Secretary Chris Heaton-Harris and Josep Borrell, the EU’s foreign policy chief, are expected to see their benefits cut.

They will also be offered the option of voluntarily withdrawing from the pension scheme in exchange for a one-time payment.

The fund pays around €20 million per year, with the average pension totaling over €2,000 per month, up to a maximum of €7,000 per month. For many members, these payments come on top of a pension provided by national governments.

As of December 31, the fund’s assets were between €50m and €55m. Future pension payment obligations amounted to €363 million until at least 2074 and the fund had to short of money end of 2024 or 2025. The scheme had 964 current and future retirees in 2021.

In total, the parliament contributed €142m and MEPs €71m to the scheme, which was closed to new members in July 2009 when a new pay and pension scheme was introduced. But the parliament at the time said it would be responsible for the future benefits of members of the voluntary scheme.

Heidi Hautala, a green member of parliament’s regulatory office, who made the decision, said it should go further. Her green group did not want to see parliament “commit to keeping an unsustainable fund alive with taxpayers’ money”, she said. “It is a dead end to maintain an additional voluntary pension fund for MEPs which should have been liquidated years ago.”

Recent court rulings by the European Court of Justice could allow the parliament to withdraw from the programme, she said.

“Letting the fund go bankrupt should not be ruled out,” Hautala said. But she acknowledged that legal opinions on Parliament’s liability differed and said the case could ultimately go to court.

Hautala said she would ask MEPs to remove from their statutes the commitment to be responsible for the fund.

Parliament said the measures would put the inherited pension system “on a more sustainable path”, while safeguarding the interests of taxpayers and guaranteeing a “minimum level of subsistence for beneficiaries”.

The situation will be reviewed next year.