The European Parliament does not have to guarantee a special pension fund from which former parliamentarians receive a supplementary pension, says MEP Lara Wolters (PvdA). The funding ratio of that fund, which was closed in 2009, is very low, but parliament has always said so far to adjust any difference. A study by Utrecht University now shows that there is no legal basis for doing so, says Wolters.
The pension fund for MEPs has been about to collapse for years. The fund has large deficits: in 2018 this was 270 million euros, the following year 326 million euros. In 2024, according to the latest calculations, there will be no more money in the till. Participation was always voluntary, new MEPs can no longer use it.
Not a pension fund, but an investment fund
Since 2009, MEPs can no longer become members of the fund. At that time, there were already doubts about the financial stability of the fund because of the rules: even if there was nothing left in cash, the MEPs who had invested money in the past could still receive a benefit.
“In fact, it is not a real pension fund, as in the Netherlands, but an investment fund”, says PvdA employee Wolters. “And this Luxembourg investment fund can never legally guarantee a certain return.”
A positive return is needed with a pension fund, because otherwise the European taxpayer will have to make up the difference. In the Netherlands, a coverage ratio below 100 percent is seen as a matter of concern, the coverage ratio of the European fund was about 37 percent a few years ago.
End retirement benefits
Today, a committee of the European Parliament is discussing the matter, next week the issue will be raised again when the budget is approved.
In the past, Dutch parliamentarians have also tried to end pension benefits. The executive board promised to hold individual discussions with members, but that never happened.
Former MEP Gerben-Jan Gerbrandy (D66) called the number of years ago “a body in the closet”. “And every year when we open the closet we look at the same body.”
According to Lara Wolters, with the new study in hand, the MEPs can now make short work of the fund.
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