EUROPEAN COMMISSION Brussels, 8.8.2022 COM(2022) 388 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 2015-2020 report on the financial situation of the unemployment insurance scheme for former members of the temporary or contract staff and parliamentary assistants who are unemployed after the termination of their service in a European Union institution



REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 2015-2020 report on the financial situation of the unemployment insurance scheme for former members of the temporary or contract staff and parliamentary assistants who are unemployed after the termination of their service in a European Union institution Summary In accordance with the Conditions of Employment of Other Servants (CEOS), the EU unemployment allowance is intended for former Temporary Agents (TAs), Contract Agents (CAs), or Accredited Parliamentary Assistants (APAs) who find themselves in a situation of involuntary unemployment (excluding, for example, staff who have resigned) following termination of their service with a European Union institution, within the meaning of Article 1 of the Staff Regulations of Officials of the European Union. This unemployment allowance is complementary to any national unemployment allowance received by the former staff member. These allowances are financed from the Unemployment Fund (‘the Fund’), which is itself financed by the contributions of staff covered by the CEOS (who are potential beneficiaries) and by their employer’s contributions. The conditions for granting the allowance, the beneficiary categories and the contribution rates were all changed significantly in the latest reforms of the Staff Regulations, affecting the Fund’s cash balance in particular. The reform of the Staff Regulations and the CEOS, which entered into force on 1 May 2004, introduced into the CEOS a new category of staff engaged under contract (CAs), along with new rules governing contributions to the Unemployment Fund. In accordance with Council Regulation No 160/2009 of 23 February 2009 amending the Conditions of Employment of Other Servants of the European Communities, APAs are also now covered by the Unemployment Fund. The reform of the Staff Regulations and the CEOS which entered into force on 1 January 2014 changed the maximum duration of contracts of employment for CAs employed under Article 3b of the CEOS from 3 to 6 years. Under Article 28a(11) and Article 96(11) of the CEOS, every 2 years the Commission must present a report on the financial situation of the unemployment insurance scheme. Moreover, independently of this report, the Commission may, by means of delegated acts in accordance with Articles 111 and 112 of the Staff Regulations, adjust the contributions provided for in Article 28a(7) and Article 96(7) of the CEOS if this is necessary in the interests of the balance of the scheme. To make it easier to trace the evolution of the Fund, the Commission always makes this bi-annual report with a five years reference period. The previous report covered the period 2013-2018 and the reference period for the present report is December 2015 to December 2020. Evolution of the Fund Although in 2015 the Unemployment Fund had an operating deficit of EUR 3 million, and its accumulated reserve fell from EUR 16.1 million at the start of 2009 to EUR 2 million at the end of 2015, the Fund’s reserve has been reconstituted and amounted to more than EUR 29 million by the end of 2020. Change in number of allowances paid

During the reference period, there was a 31% increase in the number of monthly unemployment allowances paid. This trend is related in particular to the following cyclical factors: -the extension of the duration of CA 3b contracts from 3 to 6 years as a result of the 2014 reform of the Staff Regulations, which had as a consequence that fewer CA contracts came to an end in 2015-16, -the end of APA contracts as a result of the end of the parliamentary term in 2019, -a significant increase in the number of allowances for TAs in 2020 (+56%), corresponding to the departure of TAs employed by the cabinets (March 2020). In 2020, with the end of the previous parliamentary term, almost 14 000 monthly allowances were paid out, more than double those paid in 2016. Change in the average monthly allowance (EUR) The average monthly allowance for TAs remains stable. Over the period 2017-2020, there was a slight increase in the average CA allocation and a slight decrease for the APA population, resulting in particular from an increase in the number of allowances paid. The average unemployment allowance is between EUR 1 900 and 2 500. The average duration for which the allowance is paid has been relatively stable since 2015, varying between 8 and 10 months (see table on page 11.1). Regulatory framework 1.1Description of the scheme The reform of the Staff Regulations and the CEOS which entered into force on 1 May 2004 amended the legal basis governing eligibility for the Unemployment Fund and the rules on the payment of contributions to the Fund that had applied since 1985. The changes can be summarised as follows: Before May 2004 After May 2004 Cover against the risk of unemployment solely for temporary agents (TAs) leaving the service. A new category of staff engaged under contract (i.e. contract agents (CAs)) benefitting from cover against the risk of unemployment. A 0.4% employee’s contribution and a 0.8% employer’s contribution. New rules on the payment of contributions to the Unemployment Fund (i.e. employee’s contribution increasing to 0.81% and employer’s contribution to 1.62%, and a lump-sum allowance of EUR 1 050.30 for 3b CAs and APAs, and EUR 1 400.41 for TAs). Entitlement to unemployment allowance limited to a maximum of 24 months. Entitlement to unemployment allowance limited to a third of the period spent in active employment as a member of the temporary agents (TA) or contract agents (CA) or as an accredited parliamentary assistant (APA), and to a maximum of 36 months. Allowance capped as of the seventh month of unemployment, and minimum allowance increased. The table below shows the maximum and minimum amounts payable to the different categories of staff: in EUR, as at 1 January 2021 TA CA APA Maximum (as from the seventh month) 3 080.90 2 310.64 2 391.63 Minimum 1 540.45 1 155.33 1 016.43

Standard allowance and maximum and minimum amounts payable are updated annually in the same way as remuneration and in line with Article 65 of the Staff Regulations. Any family allowances due are paid in addition to the unemployment allowance. The contribution to the Joint Sickness Insurance Scheme (JSIS) of the European Union (5.1% of the unemployed person’s reference basic salary) is paid by the Unemployment Fund. 1.2Legal framework -Article 28a of the CEOS as amended by Regulation No 1023/2013 of the European Parliament and of the Council of 22 October 2013. -Article 96 of the CEOS and Article 5 of the Annex to the CEOS as amended by Regulation No 1023/2013 of the European Parliament and of the Council of 22 October 2013. -Articles 135 and 136 of the CEOS as amended by Regulation No 1239/2010 of the European Parliament and of the Council of 20 December 2010 (OJ L338, 22.12.2010). -Article 65(1) of the Staff Regulations on the updating of remuneration and other amounts. -Commission Regulation No 91/88 of 13 January 1988 laying down provisions for implementing Article 28a(2) of the Conditions of Employment of Other Servants of the European Union (OJ L 11, 15.1.1989). -Commission Rules of 14 July 1988, common accord having been recorded by the President of the Court of Justice of the European Communities on 4 July 1989, laying down the detailed arrangements for applying the provisions relating to the grant of the unemployment allowance to members of the temporary staff, implementing Article 28a(10) of the Conditions of Employment of Other Servants of the European Union. 2Financial position and cash balance of the Unemployment Fund 2015-2020 This section presents developments in the financial position of the Unemployment Fund, in particular its revenue and expenditure. The amounts under ‘Unemployment allowances’ systematically include the basic unemployment allowance and any family allowances. Any social benefits received at national level (unemployment benefits, family allowances, sickness benefits, childbirth benefits, etc.) are deducted. Finally, as indicated above (1.1), the JSIS contribution is financed by the Unemployment Fund (5.1% of the reference basic salary of the unemployed person). The Unemployment Fund uses two management instruments for its revenue and expenditure: ·a current account for collecting revenue and paying allowances; ·term accounts for investing accumulated surpluses. 2.1Cash balance: operating results and accumulated balances 2015-2020 Under cash-based accounting, transactions are recorded only when there is money incoming or outgoing.

Table 2 shows the evolution of the Unemployment Fund's financial assets both in the current account incorporated in the European Commission’s accounting system (part I) and in the investment accounts managed by DG BUDG (before 2019, DG ECFIN) (part II). Part III shows the total accumulated surpluses for these two accounts. Table 3 shows the accumulated balance of the Fund. Between 2015 and 2018, the accumulated surplus increased significantly to reach a maximum in 2019 (EUR 30.7 million). It was down at the end of 2020 (EUR 29 million). This can be explained by the fact that expenditure was impacted by the change of parliamentary term. Expenditure on APAs fell significantly as of 2016 and then rose again significantly as of 2019 to reach a maximum in 2020. Revenue from contributions from the various institutions and agencies increased by almost EUR 10 million over the period concerned. 2.2Financial position: operating results 2015-20 In accruals accounting, transactions are recorded in the accounts at the moment when the contribution to the Unemployment Fund or the payment of unemployment benefit is due. This means that ·some contributions received at the start of year N cover periods of activity at the end of year N-1, ·some amounts paid at the start of year N cover periods of unemployment at the end of year N-1. In accordance with the relevant accounting standards, these transactions are charged to financial year N-1. Table 4 sets out the revenue and expenditure according to this principle and therefore reflects the Unemployment Fund’s annual financial position with regard to revenue and expenditure. There were significant increases in expenditure from 2013 to 2015, primarily owing to the new parliamentary term of the European Parliament and the payment of unemployment allowance to eligible APAs. Nevertheless, from 2016 this expenditure decreased because a majority of APAs ceased to be eligible for unemployment benefits and CA contracts were extended from 3 to 6 years (2014 reform of the Staff Regulations). This expenditure increased again significantly in 2019 and 2020 with the end of the European Parliament’s parliamentary term (in mid 2019) and the end of the Commission's term of office (end of 2019). The Fund’s current account balance was in deficit by more than EUR 3 million in 2015; however, the period 2016 to 2018 saw an annual surplus of around EUR 10 million. Following a smaller surplus in 2019, the Fund recorded a deficit of EUR 0.5 million in 2020, due to the end of the European Parliament’s parliamentary term and the end of the Commission’s term of office.

Operating results 2015 -2020 2.3Financial position: breakdown of expenditure and revenue by institution and for all the agencies 2015-2020 Table 5 provides a breakdown of expenditure and revenue by institution and for all the agencies. The first part of the table provides the absolute amounts, while the second part shows the amounts as percentages of total expenditure and revenue. The cyclical effect of the end of the European Parliament’s parliamentary term is particularly visible, with a sharp decrease in expenditure related to the European Parliament of EUR 6.5 million between 2015 and 2016, to reach some EUR 3 million in 2018. It rises again as of 2019 to reach a maximum in 2020, at more than EUR 13 million. The agencies contribute much more than their share of expenditure. This situation can be attributed to the fact that some of their staff members have open-ended contracts. However, it should be noted that expenditure on former staff of the agencies was falling up until 2018 and then started to rise again slightly (EUR 5 million) in 2020, a fall of almost 19% compared with 2015. 3Analysis of persons insured, beneficiaries and allowances paid 3.1Number of persons insured and average contribution Table 6 shows the number of TAs, CAs and APAs paying into the Unemployment Fund who were in active service on 31 December of each year.



3.2Number of persons receiving unemployment allowance in absolute terms and as a percentage of the number of persons insured: ‘unemployment rate’ at 31 December of the year in question Table 7 shows the number of unemployed persons who received an unemployment allowance in full or as a top-up to benefits received under the national system for the month of December each year. Note that the number of beneficiaries who received an allowance for at least one month of the year was strongly affected by the effects of the end of the previous parliamentary term. By combining the data on TAs, CAs and APAs in service on 31 December in Table 6 and the number of beneficiaries who received an unemployment allowance shown in Table 7, it is possible to calculate the ratio of beneficiaries of the Unemployment Fund to the number of persons insured under that Fund. The results are set out in Table 8.

For TAs, the number of recipients of unemployment allowance as a ratio of members of the scheme remains stable (3%). As far as CAs are concerned, beneficiaries as a ratio of members increased significantly, almost doubling from 1.83% to 3.56%. For 2019 and 2020, because of the end of the parliamentary term, a high number of former APAs were drawing the allowance (400 in 2019 and 291 in 2020). The ratio of beneficiaries to members was therefore significant in those years (22% and 15% respectively), whilst it is normally around 2 or 3%. This is consistent with the observations made at the end of the previous parliamentary term. 3.3Number of monthly unemployment allowances paid, average amount, beneficiaries, and country of residence of beneficiaries Pursuant to Articles 28(4) and 96(4) of the CEOS, unemployment allowance is paid for a period corresponding to one third of the period of service but not exceeding 36 months. Table 9 shows the number of monthly unemployment allowances paid to all beneficiaries each year. The table shows the impact on APAs of the change of parliamentary term, and the impact on TAs of the change of Commission (impact in 2015 and 2020). Table 10 below shows the average amount of unemployment allowance by beneficiary category. This amount corresponds to the total annual expenditure for each type of beneficiary (TA, CA and APA), divided by the number of monthly payments made. It should be noted that in any given month the allowance paid may be the full amount or a pro-rata amount based on the number of days on which the person was actually entitled to the unemployment allowance. Whilst the amounts paid to the various beneficiaries in 2020 are relatively stable compared to the previous year, a slight decrease among APAs can be seen, resulting from the degressive nature of the unemployment allowance. Table 11.1 sets out the average duration in months of unemployment allowance paid during one year, including any earlier benefits owed. This duration corresponds to the total number of days for which the allowance was paid up to 31 December of the year in question, divided by the number of recipients of the unemployment allowance. The result obtained is divided by 30 to obtain the average period in months for which the unemployment allowance was paid. The average duration in months of unemployment allowance has been stable over the past 6 years (between 8 and 10 months). The following tables show the duration of payments by staff category (TAs, CAs and APAs).

CA/TA: APA: Although expenditure relating to APAs as a share of overall expenditure is high in 2015, 2019 and 2020 (31%, 33% and 31% respectively) this is due both to the number of staff in this category and to the high average amount of the monthly allowance. The average duration of the period of benefit cover in 2015 and 2016 (13 months) was significantly greater than for CAs and TAs, a direct consequence of the increase in the number of APAs eligible for the unemployment allowance. This period then decreases substantially to reach a minimum in 2019 (5 months), before doubling the following year to 10 months. Having regard to the principle of complementarity as applied to the unemployment insurance scheme, the country of residence of the recipient of the unemployment allowance is significant, particularly in view of the different eligibility criteria for national unemployment benefit in the different Member States. Table 12 shows the countries of residence of beneficiaries who received at least one monthly allowance during the year. It should be noted that, until the end of the transition period on 31 December 2020, the UK was considered to be a Member State, allowing former staff to receive unemployment allowance while living in the UK. Moreover, after the end of the transition period and pursuant to Article 115 of the Withdrawal Agreement, Articles 28a, 96 and 136 of the CEOS will apply to other servants of the Union of any nationality, including former servants who contributed to the EU unemployment scheme before the end of the transition period if they reside in the United Kingdom and are registered with the UK unemployment services. In 2015, almost half of beneficiaries were registered as jobseekers in Belgium. This proportion remained stable during the reference period, varying between 42.86% and 49.47%. 4CONCLUSIONS 4.1Period 2015 -2020 A succession of positive financial years between 2016 and 2019 allowed the reserve to remain at more than EUR 29 million despite a deficit of EUR 1.3 million in 2020. In accordance with the conclusions of the previous report on the financial position of the unemployment insurance scheme, the Commission carried out regular monitoring of the scheme’s financial position. In particular, the Commission continued to assess whether the balance of the scheme required adjustment of the rates of contribution to the scheme’s financing, which it did not up to the end of 2020. 4.2Prospects of the Unemployment Fund in the short and medium term On the basis of past observations, it seems that the substantial reserve achieved at the end of 2020 will further grow until the end of the current parliamentary term and the transition to the new mandate of the College of Commissioners in 2024-2025. It should also be stressed that there are other factors that could increase expenditure, such as the use of temporary agents in the Commission, inflation as well as the current uncertain economic context.