"There is currently a £29m pensions fund hole" and the Court of Auditors has "discovered that the second fund is illegal" (Bumper Book of Government Waste, 2006)
First, "the hole". What has been detected is an "actuarial deficit". In other words, on the basis of actuarial projections as to the number of members of the pension fund paying in, the number receiving benefits, now and in the future, and the life expectancy of the latter, if the current conditions are maintained there will ultimately be a deficit of the quoted amount (€43 million). At present, the Fund has far more payers-in than beneficiaries, so it is comfortably meeting its liabilities - the problem will only come down the line when there are far more retired MEPs.
The problem is a real one, and one encountered by very many pension funds.
Arrangements are not yet finalised, but the new general scheme under the new MEPs' Statute will inevitably call into doubt the need for the existence of the current scheme which was explicitly intended only as a stopgap pending an MEP statute.
On the "legal basis" issue, Parliament's Legal Service believes that the right of organisational autonomy granted to the EU institutions is sufficient legal basis to set up such a scheme. To say the fund is "illegal" is a gross overstatement even of the Court of Auditors' position. |