EN    EN EN 
 
EN    EN  EUROPEAN COMMISSION 
Brussels, 13.12.2010 
SEC(2010) 1607 final 
  
COMMISSION STAFF WORKING DOCUMENT 
Addendum to the 1st September 2010 Eurostat  report on the pension contribution rate 
of the Pension Scheme for European Officials (PSEO) 
 
concerning 
implementation of the judgement of the Cour t of Justice of the Eu ropean Union of the 
24 November – Case C-40/10 
 
Reference date: 31 December 2009 
 
COM(2010)798 final 
 
EN 2   EN TABLE OF CONTENTS 
Commission staff working doc ument Addendum to the 1st September 2010 Eurostat report on the 
pension contribution rate of the Pension Sche me for European Officials (PSEO) concerning 
implementation of the judgement of the Court of Justice of the Eur opean Union of the 24 
November – Case C-40/10 Reference date: 31 December 2009 Error! Bookmark not defined.  
1. Introduction................................................................................................................ .. 3 
2. Contribution rate .......................................................................................................... 3  
3. Analysis of the contribution rate change...................................................................... 4 3.1. Change in actuarial assumptions.................................................................................. 5 3.2. General Salary Growth (GSG)..................................................................................... 6 
 
EN 3   EN 1. I NTRODUCTION  
In order to comply with the judgement of the Co urt of Justice of the Eu ropean Union of the 24 
November 2010 (Case C-40/10), the Council a dopted the Commission Proposal on the 2009 
salary and pension adjustment (COM (2009) 629). This Regulation adjusts,  with the retroactive 
effect from 1 July 2009, the remuneration and pens ions of EU officials and other servants by 
3.7% and replaces the Council Regulation (EU,  Euratom) No 1296/2009 of 23 December 2009 
adjusting them by 1.85%. Therefore, the 2009 globa l Specific Indicator (SI) value has increased. 
Since this indicator is a component of the Genera l Salary Growth (GSG), a parameter used in the 
calculation of the 2010 pension co ntribution rate, this paramete r also needs to be updated. 
Eurostat has drawn up the present Addendum to the 1st September 2010 Eurostat report to set out 
the impact of the modified GSG on the resu lts of the 2010 update of the 2008 actuarial 
assessment, based on the population of Eu ropean officials as at 31 December 2009. 
This addendum to the Eurostat report provide s the information needed by the Commission to 
propose, if necessary, changes to the staff contribu tion rate in order to ensure the balance of the 
scheme. 
For any further information concerning this repor t, please contact Eurostat in Luxembourg: 
Eurostat, Unit C-6 Secretariat 
BECH – A2/018 
L-2920 Luxembourg 
Tel.: (352) 4301-34191 
2. C ONTRIBUTION RATE  
As a result of the modified GSG parameter the calculated pension contribution rate for 
2010 is 11.6%  instead of the 11.0% indicated in  Eurostat's September 2010 report. 
The change is exclusively the consequence of implementation of the judgement of the 
Court of Justice of the European Uni on of the 24 November – Case C-40/10.  
The modified 2010 actuarial asse ssment of the Pension Scheme for European Officials 
(PSEO) indicates that, in order to guara ntee the equilibrium of the scheme, the 
contribution rate necessary to finance one third of the benefits payable would be 11.6%  
of the basic salary (or invalidity or termin ation of service allowance). This actuarial 
assessment has been made in accordance with the agreed methodology. 
The calculated contribution ra te indicated above (11.6%) is one third of the ratio 
between the total of the serv ice cost (1 246 million Euros) and the total of annual basic 
salaries (3 574 million Euros). This rate is higher (+0.3%) than the one calculated in 
2009 (11.3%). This change is analysed in point 3. 
 
EN 4   EN Tables I and II from the 1st September Eurostat report have been updated as follows:  
Table I. Breakdown of the contribution rate 
Service costTotal contribution rate 
(3/3)Staff contribution rate 
(1/3)
Service cost for retirement 31.9% 10.6%
Service cost for invalidity 1.9% 0.6%
Service cost for death 1.1% 0.4%
Total service cost 34.9% 11.6% 
Table II. Service cost and total amount of annual basic salaries 
Service cost Total (EUR million) %
- Service cost for retirement 1 141 91.6%
- Service cost for invalidity  66 5.3%- Service cost for death  39 3.1%Total service cost 1 246 100.0%
Total annual basic salaries and 
invalidity and termination 
allowances3 574 100.0%
 
3. A NALYSIS OF THE CONTRIBUTION RATE CHANGE  
Changes to the pension contribution rate resu lt from the combined effect of changes in 
the population structure, in actuarial assumptions and in  the methodology. The separate 
impact of these changes in the officials' contribution rate change is not easy to determine due to their interdependency, alt hough analysis of the actuarial assumptions 
allows a better understanding of  the changes in contribution rate and its sensitivity to 
the various actuarial assumptions. 
As indicated in point 1, the o fficial’s pension contribution rate calculated this year 
(11.6%) is higher than the one calculated in 2009 (11.3%). This increase (+0.3 
percentage points) is mainly explained by 
improvements in the methodology, notably in the incorporation of staff turnover (-0.2% 
percentage points), 
the update of the invalidity ta ble (-0.1 percentage points), 
the increase of the General Salary Grow th (GSG) (+0.6 percentage points) and 
the fact the Real Discount Ra te (RDR) has, exceptionally th is year, remained stable. It 
should be remembered that past increases of  the contribution rate in the period 2004 – 
2009, from 9.75% to 11.3% (curre nt applied rate) are mainly  due to the progressive 
yearly decrease of the RDR from 3.9% (rate  used in the 2004 assessment) to 2.8% (rate 
used in the 2009 assessment). 
 
EN 5   EN 3.1. Change in actuarial assumptions 
The General Salary Growth (GSG) is the only assumption that has been updated as a 
consequence of the implementation of the ju dgement of the Court of Justice of the 
European Union of the 24 November – Case C-40/10. 
Tables IV and V from the 1st September Eurostat report have been updated as follows: 
.Table IV. Actuarial assumptions  
Actuarial assumption Value
Average age difference between married men and 
women3 years
Probability of being married for men 84%Probability of being married for women 38%Marital status status at evaluation date
Coefficient for orphan's and divorced spouse's pension 10%
Annex VIII coefficient (correction coefficient) 0.0%Assumed retirement age 63 to 64Real discount rate (RDR) 2.8%General salary growth (GSG) 0.5%
General pension revaluation (GPR) 0.5% (equal to the GSG)
Individual salary progression (ISP) 2009 ISP tableMortality table (healthy people) 2008 ICSLTMortality table (Invalids)
Mortality rate corresponding to a person 3 
years older than healthy person
Invalidity table 2009 EU Invalidity table 
Table V. Changes in actuarial assumptions 
Assum ption Assessment
2009 2010
Real Discount Rate (RDR) (1) 2.8% 2.8%
General Salary Growth (GSG) (1) 0.3% 0.5%
ISP-1. Individual Salary Progression of Officials, 
recruited before 01.05.2004 (2)1.5% 1.5%
ISP-2. Individual Salary Progression  of 
Officials, recruited from 01.05.2004 onwards (2)1.9% 2.1%
ISP-3. Individual Salary Progression of 
Temporary Agents (3)0.4% 1.6%
ISP-4. Individual Salary Progression of Contract 
Agents (3)0.2% 1.0%
ISP-5. Individual Salary Progression of 
Parliamentary Assistants (4)n/a 0.0%
Life 2008 ICSLT 2008 ICSLT
Invalidity2008 EU Invalidity 
table2009 EU Invalidity 
table
(1) Average of 12 years preceding the year of the assessment
(2) Average of individual rates weighted by population as at 31.12.2009(3) 2009 estimated rate takes account of turnover. In 2010 assessment turnover is considered       separately in calculation(4) New category of personnel included in the 2010 assessment by the first time
 
 
EN 6   EN 3.2. General Salary Growth (GSG) 
The GSG (0.5%) used in the updated 2010 calculati on is higher than the one used in the 
2009 assessment (0.3%). The effect on the contri bution rate for pension is an increase of 
+0.6 percentage points. 
The GSG (0.5%) presented in this addendum is  higher than this us ed in the Eurostat 
report of the 1st September 2010, due exclusively to the implementation of provisions of 
the judgement of the Court of Justice of the European Communities of the 24 November 
– Case C-40/10. 
As for the discount rate, Annex XII contai ns specific rules for calculating General 
Salary Growth. Article 11 stipulates on the one hand that the annua l change in salary 
scales to be used for the actuarial calcula tions must be based on the specific indicator 
(SI) and on the other hand that th e effective annual rate is th e average of the net SIs for 
the 12 years preceding the current year.  
The 2009 net SI used in the moving average to  calculate the GSG as detailed in the 
Eurostat report of the 1st September 2010 (0.9%) has been replaced by 2.8%, which is 
the 2009 change in purchasing power of national officials as detailed in the 2009 proposal of the Commission for adjus ting remunerations of officials. 
As the net SI applied in 2009 is now 2.8%, the 12-year moving geometric average from 
1998 to 2009 (GSG) becomes 0.5%. 
Table XIV from the 1
st September Eurostat report has been updated as follows: 
Table XIV. General Salary Growth  
Year SI
1997 0.7
1998 0.5
1999 1.8
2000 -0.1
2001 0.6
2002 1.7
2003 1.1
2004 -1.2
2005 0.0
2006 0.2
2007 0.0
2008 -1.3
2009 2.8
GSG (Aver. 1997 - 2008) 0.3
GSG (Aver. 1998 - 2009) 0.5