Proposal for a COUNCIL REGULATION concerning transitional measures for the reform of the Staff Regulations, in particular with regard to pay and pension

(presented by the Commission)

EXPLANATORY MEMORANDUM

On 19 May 2003, and on 29 September 2003 following the results of the Consultation Committee, the Council reached agreement on the following:

Pay scales will be adjusted and applied only as of 1 January 2004 on the basis of the current salary adjustment method. The new special levy, as well as the new pension contribution rate, shall enter into force on 1 January 2004.

The remaining provisions of the new Staff Regulations will enter into force on 1 May 2004 except for the new nine-year multi-annual adjustment method which will take effect on 1 July 2004.

This regulation is intended to implement the political agreement with regard to the above-mentioned transitional measures as of 1 January 2004.

2003/0241 (CNS)

Proposal for a COUNCIL REGULATION concerning transitional measures for the reform of the Staff Regulations, in particular with regard to pay and pension

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 283 thereof,

Having regard to Article 13 of the Protocol on the Privileges and Immunities of the European Communities,

Having regard to the proposal by the Commission submitted after consulting the Staff Regulations Committee [1],

[1] OJ C [...], [...], p. [...].

Having regard to the conclusions, approved by the Council on 19 May 2003 [2], and the results of the Consultation Committee, approved by the Council on 29 September 2003 [3]

[2] Doc. 9522/03 STAT 34 FIN 201

[3] Doc. 12957/03 STAT 77 FIN 405

Having regard to the opinion of the European Parliament [4],

[4] OJ C [...], [...], p. [...].

Having regard to the opinion of the Court of Justice [5],

[5] OJ C [...], [...], p. [...].

Having regard to the opinion of the Court of Auditors [6],

[6] OJ C [...], [...], p. [...].

Whereas:

(1) The overhaul of the current Staff Regulations and Conditions of Employment, which were originally adopted in 1962, have led to the requirement to phase in certain reform measures: The adjustment of pay scales on the basis of the current method, a new special levy and a new pension contribution rate shall take effect as of 1 January 2004, by way of transitional measures, while the revised Regulation amending the Staff Regulations shall enter into force on 1 May 2004.

(2) The new special levy is introduced to reflect the costs of social policy, improved working conditions and the European Schools.

(3) Article 83 (4) of the Staff Regulations provides that a new rate of contribution is to be set where an actuarial assessment of the pension scheme has shown contributions by officials to be insufficient to finance one third of the benefits payable thereunder. Such an assessment [7] has shown that the present contributions by officials are insufficient to finance one third of the benefits payable.

[7] Doc. 13157/03 STAT 78 FIN 410 and Doc. 12957/03 STAT 77 FIN 405

(4) Pursuant to Article 65 of the Staff Regulations, the Council shall each year review, and if appropriate adjust, the remuneration of the officials and other servants of the Communities. According to the proposal adopted by the Council, pay scales will be adjusted on the basis of the current method. For this purpose, the period of validity of Annex XI to the Staff Regulations, which ceased to apply on 30 June 2003, shall accordingly be extended.

HAS ADOPTED THIS REGULATION:

Article 1

Paragraph 1 to 5 of Article 66a of the Staff Regulations are replaced by the following:

1. By way of derogation from Article 3 (1) of Regulation (EEC, Euratom, ECSC) No 260/68, [8] a temporary measure regarding remuneration paid by the Communities to staff in active employment, to be known as the 'special levy', shall be applied for a period running from 1 January 2004 until 30 April 2004.

[8] OJ L 56, 4.3.1968, p. 8 Regulation as last amended by Regulation (Euratom, ECSC, EEC) No 3736/90 (OJ L 360, 22.12.1990, p. 1).

2. The rate of this special levy, which shall apply to the base defined in paragraph 3, shall be 2.5%.

3. a) The base for the special levy shall be the basic salary for the grade and step used to calculate remuneration, minus:

- social security and pension contributions and the tax, before the special levy, payable by an official in the same grade and step without dependants within the meaning of Article 2 of Annex VII to the Staff Regulations, and

- an amount equal to the basic salary of an official in grade D4, step 1.

b) The components used to determine the base for the special levy shall be expressed in euro and weighted at 100.

4. The special levy shall be deducted monthly at source; the proceeds shall be entered as revenue in the general budget of the Communities.

Article 2

For the period from 1 January 2004 until 30 April 2004, the contribution rate laid down in Article 83 (2) of the Staff Regulations shall be set at 9,25%. The maximum rate for payments under Art. 42 of the Conditions of employment of other servants of the European Communities shall be set at 18,5%.

Article 3

1. Annex XI to the Staff Regulations shall continue to apply from 1 July 2003 until 30 June 2004.

2. For the purposes of the 2003 review of remuneration, the adjustment provided for by Article 65(1) of the Staff Regulations shall take effect as of 1 January 2004.

3. In accordance with Annex XI, the value of this adjustment shall be 3.4%.

Article 4

This Regulation shall enter into force on [...].

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, [...]

For the Council

The President

[...]

>TABLE POSITION>

Annex to the financial statement

>REFERENCE TO A GRAPHIC>

Observations :

The effects after 1.05.04 are included in the main reform proposal.

The baseline for the statement is the situation in June 2003 (a prolongation of the temporary contribution and the pay adjustment method)