Proposal for a Council Regulation (EC, Euratom) adjusting, from 1 July 2005, the rate of contribution to the pension scheme of officials and other servants of the European Communities
Date: 2005-10-12
Institutions: European Commission
Subjects: European official, pension scheme, regulations for civil servants, servant (EU), transfer of pension rights

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.10.2005 
COM(2005) 487 final 

Proposal for a 

COUNCIL REGULATION (EC, EURATOM) 

adjusting, from 1 July 2005, the rate of contribution to the pension scheme of officials 
and other servants of the European Communities 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

The  Council  has  to  decide  each  year,  on  a  proposal  from  the  Commission,  on  the 
adjustment of the rate of contribution to the pension scheme effective from 1 July. 

•  General context 

Under  Article  83a(4)  of  the  Staff  Regulations  the  Commission  has  to  present  to  the 
Council  each  year  an  updated  version  of  the  five-yearly  actuarial  assessment,  in 
accordance with Annex XII to the Staff Regulations. 

Under  Article  13  of  Annex  XII  to  the  Staff  Regulations,  Eurostat  has  submitted  the 
annual report on this assessment, which determines the rate of contribution required to 
maintain actuarial balance of the pension scheme. 

•  Existing provisions in the area of the proposal 

A  proposal  is  to  be  presented  each  year  for  adjusting  the  rate  of  contribution  to  the 
pension scheme. 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Methods of consultation used, main sectors covered and general profile of respondents 

The  elements  of  the  proposal  have  been  discussed  with  the  staff  representatives  in 
accordance with the appropriate procedures. 

Summary of replies received and the way in which they have been taken into account 

The proposal takes account of the opinions of the parties consulted. 

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•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

- The purpose of the proposal is to adjust the rate of contribution to the pension scheme 
in accordance with the rules in force. 

- The rules in force permit no alternative. 

3)  LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

In accordance with Annex XII to the Staff Regulations, Eurostat has submitted a report 
on the actuarial assessment of the  pension  scheme.  According  to  this  assessment,  the 
rate  of  contribution  required  to  maintain  actuarial  balance  of  the  pension  scheme  is 
10.3 % of basic salary. 

Under Article 2(1) of Annex XII, the adjustment cannot lead to a contribution that is 
more than one percentage point above or below the valid rate of the previous year. 

However, under Article 2(2) of Annex XII, the adjustment taking effect on 1 July 2005 
may not lead to a contribution higher than 10.25%. 

The  Commission  is  therefore  proposing  to  adjust  the  rate  of  contribution  to  10.25% 
with effect from 1 July. 

•  Legal basis 

Staff  Regulations  of  officials  of  the  European  Communities,  and  in  particular  Article 
83a thereof and Annex XII thereto. 

•  Subsidiarity principle 

The  proposal  concerns  an  area  that  falls  within  the  exclusive  competence  of  the 
Community. The principle of subsidiarity does not therefore apply. 

•  Proportionality principle 

The  proposal  is  consistent  with  the  principle  of  proportionality  for  the  following 
reasons: 

- Article 83a of the Staff Regulations provides for a Council regulation. 

- The proposal has no financial impact on expenditure. The impact on revenue results 
directly  from  the  application  of  the  adjustment  method  provided  for  in  the  Staff 
Regulations. 

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•  Choice of instruments 

Proposed instrument: regulation. 

Other instruments would have been inappropriate for the following reasons: 

- Article 83a of the Staff Regulations provides for a Council regulation. 

4)  BUDGETARY IMPLICATIONS 

The  impact  on  revenue  of  the  adjustment  to  the  rate  of  contribution  to  the  pension 
scheme is detailed in the financial statement annexed hereto. 

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Proposal for a 

COUNCIL REGULATION (EC, EURATOM) 

adjusting, from 1 July 2005, the rate of contribution to the pension scheme of 
officials and other servants of the European Communities 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having regard to the Staff Regulations of officials of the European Communities and the 
conditions of employment of other servants of the Communities laid down by Regulation 
(EEC, Euratom, ECSC) No 259/681, and in particular Article 83a of and Annex XII to the 
Staff Regulations. 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

)2(

)3(

In  accordance  with  Article  13  of  Annex  XII  to  the  Staff  Regulations,  on 
1 September Eurostat submitted a report on the 2005 actuarial assessment of the 
pension scheme updating the parameters referred to in that Annex. According to 
this assessment, the rate of contribution required to maintain actuarial balance of 
the pension scheme is 10.3 % of basic salary. 

However,  under  Article  2(2)  of  Annex  XII  to  the  Staff  Regulations,  the 
adjustment taking effect on 1 July 2005 cannot lead to a contribution higher than 
10.25%. 

In  the  interests  of  actuarial  balance of  the  pension  scheme  of  officials and  other 
servants  of  the  European  Communities, the  rate  of  contribution  should  therefore 
be adjusted to the maximum permitted, i.e. 10.25% of the basic salary, 

1 

OJ L 56, 4.3.1968, p. 1. Regulation as last amended by Regulation (EC, Euratom) No ….   
(OJ …, …, p..). 

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HAS ADOPTED THIS REGULATION: 

Article 1 

With effect from 1 July 2005, the rate of the contribution referred to in Article 83(2) of 
the Staff Regulations shall be 10.25%. 

Article 2 

This Regulation shall enter into force on the day following that of its publication in the 
Official Journal of the European Union. 

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

Done at Brussels,  

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS HAVING A 
BUDGETARY IMPACT EXCLUSIVELY LIMITED TO THE REVENUE SIDE 

1. 

NAME OF THE PROPOSAL : 

Proposal for a Regulation adjusting, from 1 July 2005, the rate of contribution to 
the pension scheme of officials and other servants of the European Communities 

2. 

BUDGET LINES : 

Chapter and Article : 

400 Tax on salaries of officials and other servants 

410 Staff contributions to the pension scheme 

Amount budgeted for the year concerned : 

EUR 466.7 million 

EUR 239.8 million 

3. 

FINANCIAL CONSEQUENCES: 

(cid:133) Proposal has no financial implications 

X  Proposal has no financial impact on expenditure but has a financial impact on 
revenue - the effect is as follows: 

Budget line 

Revenue2 

(EUR million to one decimal place) 

12-month period 
from 1 July 2005 

[Year n= 2005] 

Article 400  Impact on own resources 

-2.6 

Article 410  Impact on own resources 

+12.4 

-1.3 

+6.2 

2 

Regarding traditional own resources (agricultural duties, sugar levies, customs duties) the amounts 
indicated must be net amounts, i.e. gross amounts after deduction of 25% of collection costs. 

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Situation following action 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

[n+5] 

Article 400 

-2.6 

-2.6 

-2.6 

-2.6 

-2.6 

Article 410 

+12.4 

+12.4 

+12.4 

+12.4 

+12.4 

4. 

5. 

ANTI-FRAUD MEASURES 

OTHER REMARKS 

Method of calculation: 

Pension contribution = new contribution – implementation current year 
New contribution = implementation x new rate/rate in force 

Effect of tax cut = 21% of the increase in the pension contribution. 

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