Commission staff working document - Articles 83 and 83a and annex XII of the staff regulations - Report on the 2008 actuarial assessment of the pension scheme for European Officials (PSEO) - Reference date: 31 December 2007 - Report : Eurostat, Unit D-5 Remuneration and Pensions Luxembourg, 1 September 2008 COM(2008) 787 final
Date: 2008-11-21
Institutions: European Commission
Subjects: European official, pension scheme, regulations for civil servants, servant (EU), social-security contribution

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 21.11.2008 
SEC(2008) 2873 

COMMISSION STAFF WORKING DOCUMENT 

Articles 83 and 83a and Annex XII of the Staff Regulations 

Report on the 2008 actuarial assessment of the 
Pension Scheme for European Officials (PSEO)  

Reference date: 31 December 2007 

REPORT 

Eurostat, Unit D-5 Remuneration and Pensions 
Luxembourg, 1 September 2008 

COM(2008) 787 final 

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CONTENTS 

1.  Contribution rate ................................................................................................................ 5 

2.  Update of the assessment of the actuarial balance ............................................................. 5 

3.  Analysis of the contribution rate change............................................................................ 6 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

3.6. 

3.7. 

3.8. 

3.9. 

Real Discount Rate (RDR) change effect .................................................................... 6 

General Salary Growth (GSG) change effect............................................................... 6 

ISP change effect.......................................................................................................... 6 

Invalidity table effect ................................................................................................... 6 

Life table effect (healthy persons)................................................................................ 6 

Life table effect (invalid persons) ................................................................................ 7 

Assumed retirement age............................................................................................... 7 

Average difference between men and women ............................................................. 8 

Probability of being married for men and women ....................................................... 8 

3.10. 

Loading factor for orphan’s and divorced spouse’s pension ....................................... 8 

3.11. 

Population change effect .............................................................................................. 8 

4.  Computation system........................................................................................................... 9 

4.1. 

4.2. 

Variables used in the assessment ................................................................................. 9 

Demographic parameters ............................................................................................. 9 

4.2.1.  The reference population.............................................................................................. 9 

4.3. 

4.4. 

4.5. 

Economic parameters ................................................................................................... 9 

Technical implementation of Annex XII to the Staff Regulations ............................ 10 

Independent examination ........................................................................................... 10 

5.  Annex I — Computation .................................................................................................. 11 

5.1. 

5.2. 

5.3. 

Relevant figures for calculating the contribution rate................................................ 11 

Summary of main variables ....................................................................................... 12 

Demographic parameters ........................................................................................... 14 

5.3.1.  Reference population ................................................................................................. 14 

5.3.2.  Assumed retirement age............................................................................................. 18 

5.3.3. 

Invalidity table ........................................................................................................... 19 

5.3.4.  Life table of healthy persons ...................................................................................... 20 

5.3.5.  Life table of invalids .................................................................................................. 21 

5.3.6.  Average age difference between men and women..................................................... 21 

5.3.7.  Probability of being married for men and women ..................................................... 21 

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5.4. 

Economic parameters ................................................................................................. 22 

5.4.1.  Real Discount Rate (RDR)......................................................................................... 22 

5.4.2.  General Salary Growth (GSG) ................................................................................... 24 

5.4.3. 

Individual Salary Progression (ISP)........................................................................... 24 

5.4.4.  Loading factor for orphan’s and divorced spouse’s pension ..................................... 25 

5.5. 

Annuities .................................................................................................................... 26 

6.  Annex II — Independent examination ............................................................................. 27 

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INTRODUCTION 

Article 83a and Annex XII of the Staff Regulations set out rules to guarantee the equilibrium 
of the PSEO (Pension Scheme of European Officials). 

Article  83a(3)  stipulates  that  on  the  occasion  of  the  five-yearly  actuarial  assessment  in 
accordance  with  Annex XII  and  in  order  to  ensure  the  balance  of  the  scheme,  the  Council 
shall decide on the rate of contribution and any change to the pensionable age. Article 83a(4) 
requires  the  Commission  to  present  to  the  Council  each  year  an  updated  version  of  the 
actuarial assessment, in accordance with Article 1(2) of Annex XII. 

Finally, Article 83a(5) stipulates that for the purposes of paragraphs 3 and 4 of that Article, 
the Council is to act by a qualified majority on a proposal from the Commission, as provided 
for in the first indent of Article 205(2) of the EC Treaty. For the purposes of paragraph 3, the 
Commission’s  proposal  is  to  be  presented  after  consultation  of  the  Staff  Regulations 
Committee. 

Annex  XII  lays  down  rules  for  implementing  Article  83a  of  the  Staff  Regulations.  In 
particular, it stipulates that: 

–  Eurostat  is  the  authority  responsible  for  the  technical  implementation  of  the 

Annex (see Article 13(1)), 

–  Eurostat will be assisted by one or more qualified independent experts in carrying 

out the actuarial assessments (see Article 13(2)), 

–  each  year  on  1  September,  Eurostat  is  to  submit  a  report  on  the  assessment  and 

updating referred to in Article 1 of the Annex (see Article 13(3)), 

–  any questions of methodology raised by the implementation of the Annex shall be 
dealt  with  by  Eurostat  in  cooperation  with  national  experts  from  the  relevant 
departments of the Member States and the qualified independent expert or experts 
(see Article 13(4)). 

Eurostat  has  drawn  up  the  present  report  in  accordance  with  the  above  legal  requirements. 
This report sets out the results of the 2008 actuarial assessment of the pension scheme of the 
European  civil  service,  based  on  the  population  of  European  officials  as  at  31  December 
2007. 

The  report  provides  the  information  needed  by  the  Commission  to  propose,  if  necessary, 
changes to the staff contribution rate and to the pensionable age in order to ensure the balance 
of the scheme. 

For any further information concerning this report, please contact Eurostat in Luxembourg: 

Eurostat, Unit D-5 Secretariat 
BECH - B3/304 
L-2920 Luxembourg 
Tel.: (352) 4301-34191 

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1. 

CONTRIBUTION RATE 

The 2008 actuarial assessment of the Pension Scheme for European Officials (PSEO) 
indicates that, in order to guarantee the equilibrium of the scheme, the contribution 
rate  necessary  to  finance  one  third  of  the  benefits  payable  would  be  10.9%  of  the 
basic salary (or invalidity allowance). This actuarial assessment was presented to the 
Article 83 Working Group at the 27 June 2008 meeting. 

According to Article 83a of the Staff Regulations, where it is shown that there is a 
gap  of  at  least  0.25  points  between  the  rate  of  contribution  currently  applied 
(10.25%)  and  the  rate  required  to  maintain  actuarial  balance  (10.9%),  the  Council 
shall consider whether the rate should be adapted, in accordance with arrangements 
laid  down  in  Annex  XII1.  This  Annex  also  stipulates  that  any  adjustment  shall  not 
lead to a contribution being more than one percentage point above or below the valid 
rate of the previous year2. 

Consequently,  as  the  gap  between  the  calculated  (10.9%)  and  the  current  (10.25%) 
contribution rates is more than 0.25 points, the contribution rate to be applied from 1 
July 2008 should be 10.9%. 

The  calculated  contribution  rate  indicated  above  (10.9%)  is  one  third  of  the  ratio 
between  the  total  of  the  service  cost  (1  002  million  euros)  and  the  total  of  annual 
basic salaries (3 056 million euros) (see Annex I, Tables I and II). This rate is higher 
(+0.6%)  than  the  one  calculated  in  2007  (10.3%).  This  considerable  increase  is 
mainly explained by the fall in the interest rate and the update of the life table (see 
point 3 for further explanations about this change). 

2. 

UPDATE OF THE ASSESSMENT OF THE ACTUARIAL BALANCE 

The PSEO was assessed on the basis of the computation method set out in Chapter 2 
of Annex XII of the Staff Regulations. 

Compared  to  the  2004  assessment,  a  few  minor  changes  were  introduced  in  the 
methodology  (some  formulae  were  adapted  to  take  some  new  categories  of  the 
population  into  account,  according  to  the  Staff  Regulations  in  force  since  1  May 
2004). These changes have been applied since the 2006 assessment. 

An updated document concerning the calculation methodology is  available and can 
be obtained from Eurostat on request. 

In addition, the following elements have been considered in the 2008 assessment: 

–  The population of contributing members at 31 December 2007, 

–  The update of the Real Discount Rate (RDR), General Salary Growth (GSG) rate, 
Individual  Salary  Progression  (ISP)  rate,  Life  table,  Invalidity  table  and 
probability of being married by sex. 

More details about these updates are given in Annex I. 

1 
2 

Article 83a(4) of the Staff Regulations. 
Article 2(1) of Annex XII to the Staff Regulations. 

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3. 

ANALYSIS OF THE CONTRIBUTION RATE CHANGE 

As  indicated  in  point  1,  the  official’s  pension  contribution  rate  calculated  this  year 
(10.9%)  is  higher  than  the  one  calculated  in  2007  (10.3%).  This  considerable 
increase  (+0.6%)  results  from  the  combined  effect  of  changes  in  the  population 
structure  and  the  main  actuarial  assumptions. The separate effects of these changes 
on  the  contribution  rate  is  not  easy  to  determine  due  to  their  interdependency, 
although  analysis  of  the  actuarial  assumptions  allows  a  better  understanding  of  the 
changes in contribution rate and its sensitivity to the various actuarial assumptions. 

Changes  in  actuarial  assumptions  and  their  impact  on  the  contribution  rate  were 
presented  at  the  27  June  2008  meeting  of  the  Article  83  Working  Group  (see 
document 20080627 Art83_06) 

3.1. 

Real Discount Rate (RDR) change effect 

The  RDR  decreases  (3.1%  as  against  3.4%  used  in  the  2007  calculation).  This 
decrease  (-0.3)  has  an  impact  of  around  +0.8  percentage  points  on  the  pension 
contribution  rate.  If  the  former  RDR  is  used,  10.1%  is  obtained  instead  of  10.9%. 
This test, this year, confirms that the official’s contribution rate sensitivity is about 
2.5 times the change in the RDR. 

3.2. 

General Salary Growth (GSG) change effect 

The GSG decreases (0.4% as against 0.5% in the 2007 calculation). This decrease (-
0.1) has an impact of around -0.3 percentage points on the pension contribution rate. 
If  the  former  GSG  rate  is  used,  11.2%  is  obtained  instead  of  10.9%.  This  test,  this 
year,  confirms  that  the  official’s  contribution  rate  sensitivity  is  about  2.5  times  the 
change in the GSG (similar to the RDR).  

3.3. 

ISP change effect 

The ISP decreased overall in the 2008 valuation (1.5%) compared to 2007 (1.6%). In 
practice,  a  different  ISP  rate  by  grade,  step  and  years  to  retirement  is  applicable  to 
officials and temporary agents of agencies and is used in the calculation. The overall 
decrease  has  a  negligible  impact,  close  to  0  percentage  points,  on  the  pension 
contribution rate compared with the one obtained with the former ISP table (10.9% is 
obtained in both cases).  

3.4. 

Invalidity table effect 

The  probability  of  becoming  invalid  decreases  if  the  most  recently  observed 
invalidity rates are taken into account. The invalidity table was consequently updated 
(2008 EU Invalidity table). The use of this updated table has an impact of around -
0.1 percentage points on the pension contribution rate. A contribution rate of 11.0% 
instead of 10.9% is obtained if the former 2007 EU Invalidity table was used.  

3.5. 

Life table effect (healthy persons) 

According  to  the  Staff  Regulations  the  life  table  must  relate  to  a  population  which 
has characteristics as close as possible to those of the population of members of the 
scheme.  It  is  to  be  updated  only  on  the  occasion  of  the  five-yearly  actuarial 
assessment3.  Consequently,  the  life  table  was updated  on  the  occasion  of  this  2008 
actuarial assessment. 

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Article 9(2) of Annex XII to the Staff Regulations. 

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The  former  EU-2004  Life  table  was  used  in  the  annual  assessments  of  the  PSEO 
from  2004  to  2007.  It  was  built  by  Eurostat  in  2003  to  take  into  account  the 
population  of  members  of  the  PSEO  and  was  presented  to  the  Article  83  Working 
Group at the April 2003 meeting. 

The  real  mortality  rate  in  the  period  2004-2007  was  analysed  and  compared  to  the 
expected mortality according to the EU-2004 Life table. The result of this analysis is 
that  mortality  in  ages  30  to  69  is  lower  and  mortality  for  ages  above  70  is  higher 
compared to the EU-2004 Life table. Further details about this analysis can be found 
in document 20080627 Art83_04. 

Eurostat  presented  a  pension  assessment  using  a  new  life  table  with  the  new 
mortality rates to the Article 83 Working Group in June 2008. This new life table, the 
2008 ICSLT (International Civil Servants Life Table), is the result of an ESTAT and 
JPAS4  joint  project  aimed  at  drawing  up  a  common  life  table  based  on  a  large 
population of civil servants posted in Europe.  The  methodology  used  to  set  up  this 
life table is fully explained in document 20080627 Art83_05. 

This  life  table  has  been  certified  by  an  external  actuarial  expert  who  also 
recommended  the  regular  updating  of  life  tables.  It  was  used  in  the  present 
calculation. 

The use of the 2008 ICSLT instead of the former 2004 EU Life table in the present 
assessment  has  an  impact  of  around  +0.2  percentage  points  on  the  pension 
contribution rate. If the former mortality rates were used, 10.7% is obtained instead 
of 10.9%. 

3.6. 

Life table effect (invalid persons) 

It  is  normal  actuarial  practice  to  consider  life  expectancy  of  invalids  as  slightly 
shorter  than  that  of  healthy  persons  (e.g.  Eurocontrol  applies  the  mortality  rate 
corresponding to a healthy person 3 years older than an invalid’s age). This approach 
cannot be confirmed in the case of European civil servants as the number of invalids 
is  too  small  for  this.  Eurostat  considers  this  approach  very  logical  and  applied  the 
same actuarial practice for the first time in this 2008 pension assessment. 

The  use  of  this  approach  makes  hardly  any  change  in  the  contribution  because  the 
probability of an active staff member becoming invalid is very small. 

The implementation of this approach has a negligible impact, close to 0 percentage 
points, on the pension contribution rate (10.9% is obtained in both cases). 

3.7. 

Assumed retirement age 

Assumed retirement ages by staff groups were estimated on the occasion of the 2004 
pension  assessment,  were  presented  at  the  June  2004  meeting  of  the  Article  83 
Working  Group  and  have  been  used  in  pension  assessments  since  2004.  These 
assumed  retirement  ages  have  been  checked  on  the  occasion  of  this  2008  pension 
assessment and no change was proposed at the June 2008 meeting of the Article 83 
Working Group (for further details, see document 20080627 Art83_06). 

4 

The  JPAS  (Joint  Pension  Administrative  Section)  is  a  section  working  for  the  six  Coordinated 
Organisations and attached to the OECD. 

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3.8. 

Average difference between men and women 

The average age difference between men and women (3 years) that has been applied 
from 2004 in actuarial calculations should be used in future assessments. The result 
of  a  test  based  on  population  from  2004  to  2007  confirms  that  this  actuarial 
assumption corresponds to reality. The test showed that on average married men are 
3.01 years older than their partners and married women 3.18 years younger than their 
partners. 

3.9. 

Probability of being married for men and women 

Eurostat  has  analysed  the  recent  (2004  to  2007)  population  of  46  418  officials  and 
ex-officials older than 59 years and calculated the probability of them being married. 
The following probabilities were used in this 2008 pension assessment:  

0.84 for men  

0.38 for women  

The change in probability of being married (0.84 instead of 0.90 in the past for men 
and  0.38  instead  of  0.60  in  the  past  for  women)  has  an  impact  of  around  -0.1 
percentage points on the pension contribution rate. If the former rates had been used, 
11.0% would have been obtained instead of 10.9%. 

3.10.  Loading factor for orphan’s and divorced spouse’s pension 

Current actuarial practice is to add 10% to a payable reversion pension to allow for 
the  pension  payable  to  orphans  after  the  death  of  the  surviving  spouse  (or  of  the 
official if there is no surviving spouse) and any pension payable to divorced spouses. 
Eurostat estimates that the impact of this factor on the contribution rate is minor and 
does not consider an update to this assumption necessary at the present time.  

3.11. 

Population change effect 

The  impact  of  the  population  change  on  the  pension  contribution  rate  in  the  2008 
pension  assessment  is  negligible.  A  contribution  rate  of  10.9%  is  obtained  if  the 
former population at 31 December 2006 were used in the calculation. 

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4. 

COMPUTATION SYSTEM  

4.1. 

Variables used in the assessment 

In general, two kinds of variables are used in the actuarial calculation: 

Parameters.  These  are  values  mainly  linked  to  the  application  of  the  Staff 
Regulations.  These  values  change  according  to  certain  conditions  related  to  the 
individual  situation  of  each  official  (e.g.  the  annual  accrual  rate  is  1.9%  for  staff 
recruited from 01.05.2004 and 2% for those recruited before this date). These values 
can be clearly established.  

Actuarial  assumptions.  These  are  values  that  are  not  known  and  cannot  be 
established  exactly,  such  as  the  invalidity  table,  the  ISP  (Individual  Salary 
Progression)  table,  the  probability  of  being  married  at  the  retirement  date,  the 
coefficients  for  orphans  and  divorced  spouses.  The  values  of  these  actuarial 
assumptions  were  estimated  in  accordance  with  general  actuarial  practices  and 
discussed with national experts from the relevant departments of the Member States 
at the annual meetings of the Article 83 Working Group. 

A  summary  of  the  main  variables  used  (parameters  and  actuarial  assumptions)  is 
given in Annex I, Tables III and IV. 

4.2. 

Demographic parameters 

4.2.1.  The reference population 

The observed population is made up of contributing members of the PSEO including: 

–  active officials,  

–  members  whose  pension  contribution  is  optional  (e.g.  officials  who  have  taken 

leave on personal grounds or parental leave), 

–  invalids  who  receive  an  invalidity  allowance  under  Article  78  of  the  Staff 

Regulations, 

–  beneficiaries of an allowance for termination of service. 

47  596  contributing  members  were  recorded  at  31.12.2007,  which  represents  a  net 
increase of 2 643 participants compared to the previous year (47 596 at 31.12.2006 
were used in the 2007 actuarial assessment). 

This significant increase in the population is mainly explained by the recruitment of 
“contract agents” (a new category of population defined in the Staff Regulations) and 
officials and temporary agents from the new Member States. 

There are 7 037 “contract agents” among the contributing members at 31.12.2007, as 
against  6  404  at  31.12.2006,  which  represents  an  increase  of  9.88%.  Most  of  these 
new contributing members are replacing “auxiliary staff” (a former non-contributing 
staff category). 

A  breakdown  of  the  reference  population  by  type  of  contributing  member  and  by 
Institution or Agency is included in Annex I, Tables VI to VIII. 

4.3. 

Economic parameters 

In  accordance  with  Articles  10  and  11  of  Annex  XII  to  the  Staff  Regulations,  the 
Real Discount Rate (RDR) and the General Salary Growth (GSG) are calculated (in 

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the 2007 update) as the average of the corresponding rates for the 12 preceding years 
(see Annex I, points 5.4.1 and 5.4.2 and Tables XIV and XV for more information). 

The  value  of  the  Real  Discount  Rate  is  3.1%  compared  to  3.4%  used  in  the  2007 
actuarial  assessment.  The  GSG  is  equal  to  0.4%  instead  of  0.5%  used  in  2007. 
Finally, an updated ISP table has been used, which globally represents a decrease in 
rates (1.5% instead of 1.6%) (See Annex I, point 5.4.3).  

4.4. 

Technical implementation of Annex XII to the Staff Regulations 

Technical  questions  raised  by  the  implementation  of  Annex  XII  are  dealt  with  by 
Eurostat  in  cooperation  with  national  experts  from  the  relevant  departments  of  the 
Member  States  participating  in  the  Working  Group  on  Article  83  of  the  Staff 
Regulations. The minutes of the meeting held in Luxembourg on 27 June 2008 (doc. 
20080627_Art83WG _13) are reproduced in Annex III. 

Eurostat  also  exchanges  relevant  information  on  actuarial  issues  with  international 
organisations  such  as  the  JPAS  (Joint  Pensions  Administrative  Section  of  the 
Coordinated Organisations), EPO (European Patent Office) and Eurocontrol. 

4.5. 

Independent examination 

In  accordance  with  Annex  XII,  Article  13,  of  the  Staff  Regulations,  Eurostat  was 
assisted  by  a  qualified  independent  expert  (Ernst  &  Young  Actuaires-Conseils,  11, 
allée de l’Arche, 92037 Paris La Défense cedex) with regard to the methodological 
implementation  and  the  definition  and  calculation  of  the  corresponding  actuarial 
assumptions. 

Ernst  &  Young  Actuaires-Conseils  then  conducted  an  actuarial  examination  of  the 
contribution  rate  calculated  by  Eurostat.  This  examination  consisted  in  confirming 
the  relevance  and  reliability  of  the  actuarial  processes  and  assumptions  used  in 
accordance with the methodology described in Annex XII to the Staff Regulations. 

For  the  aspects  not  described  explicitly  in  this  Annex,  Ernst  &  Young  Actuaires-
Conseils  checked  their  compliance  with  generally  accepted  actuarial  practices. 
Concerning  actuarial  assumptions,  Ernst  &  Young  Actuaires-Conseils  carried  out 
investigations  to  ensure  that  the  underlying  data  provided  by  Eurostat  were  used 
correctly. 

The executive summary of the assessment by Ernst & Young Actuaires-Conseils is 
included in Annex II. 

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Annexes to the report on the 2007 update of the 2004 actuarial assessment 
of the Pension Scheme for European Officials (PSEO) 

Annex I 

Computation 

Annex II 

Independent examination 

5. 

ANNEX I — COMPUTATION 

5.1. 

Relevant figures for calculating the contribution rate 

Table I. 

Breakdown of the contribution rate 

Service cost

Total contribution rate 
(3/3)

Staff contribution rate 
(1/3)

Service cost for retirement

Service cost for invalidity

Service cost for death

Total service cost

29.6%

2.2%

1.0%

32.8%

9.9%

0.7%

0.3%

10.9%

Table II. 

Service cost and total amount of annual basic salaries 

Service cost

Total (EUR million)

%

- Service cost for retirement

- Service cost for invalidity

- Service cost for death

Total service cost

Total annual basic salaries and 
invalidity and termination 
allowances

 905

 65

 32

1 002

3 056

90.3%

6.5%

3.2%

100.0%

100.0%

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5.2. 

Summary of main variables 

The  following  tables  show  the  values  of  the  main  parameters  (see  Table  III)  and 
actuarial  assumptions  (see  Table  IV).  Please  note  that  the  tables  only  present  an 
overview  of  the  main  variables  and  are  not  exhaustive.  Please  refer  to  the  Staff 
Regulations and the annexes thereto for precise and complete information. 

Table III. 

Parameters used in the actuarial assessment 

Parameter

Legal source

Value
Staff Regulations in force from 
01.05.2004

Reference date for the population (Annex XII Article 1)

31.12.2007

Maximum official retirement age (Staff Regulations 
Article 52)

65

Minimum official retirement age (Staff Regulations Article 
52 and Annex XIII Article 22)

63 or before for officials in service 
before 01.05.2004

Minimum age for early retirement (Staff Regulations 
Article 52, Annex VIII Article 9 and Annex XIII Article 23)

55 or before for officials in service 
before 01.05.2004

Category and grade for the minimum subsistence figure 
(Annex VIII Article 6)

first step of grade 1

Maximum retirement pension (Staff Regulations Article 
77)

70% of the basic salary at the 
retirement date

Annual accrual rate (Article 77 of the Staff Regulations 
and Article 21 of Annex XIII)

1.9% or 2% for officials recruited before 
01.05.2004

Bonus for officials in service after the normal retirement 
age (Annex VIII Article 5 and Annex XIII Article 22)

Barcelona incentive

Minimum retirement pension (Staff Regulations Article 
77)

4% of the minimum subsistence figure 
per year of service

Invalidity allowance (Staff Regulations Article 78)

70% of the basic salary

Minimum invalidity allowance (Staff Regulations Article 
78)

100% of the minimum subsistence 
figure

Reversion pension (Staff Regulations Article 79 and 
Annex VIII Article 18)

Minimum reversionary pension (Staff Regulations Article 
79 and Annex VIII Article 18)

60% of the retirement pension

35% of the last basic salary

Survivor's pension (Staff Regulations Article 79 and 
Annex VIII Article 17)

60% of the retirement pension that 
would have been payable to the official 

Minimum survivor's pension (Staff Regulations Article 
79)

35% of the last basic salary or minimum 
subsistence figure

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Table IV. 

Actuarial assumptions 

Actuarial assumption

Average age difference between married men and 
women

Probability of being married for men

Probability of being married for women

Value

3 years

84%

38%

Marital status

status at evaluation date

Coefficient for orphan's and divorced spouse's pension

Annex VIII coefficient (correction coefficient)

Assumed retirement age

Real discount rate (RDR)

General salary growth (GSG)

10%

0.0%

63 to 64

3.1% (See point 2)

0.4% (See point 3)

General pension revaluation (GPR)

0.4% (equal to the GSG)

Individual salary progression (ISP)

Mortality table (healthy people)

Mortality table (Invalids)

2008 ISP table

2008 ICSLT

Mortality rate corresponding to a person 3 
years older than healthy person

Invalidity table

2008 EU Invalidity table

Many of these actuarial assumptions are explained in the following points. Some of 
them have changed compared to the 2007 actuarial assessment. The following table 
summarises these changes: 

Table V.  Changes in actuarial assumptions 

Variables

2007 assessment

2008 assessment

Remarks

Figures (1)

Remarks

Figures (1)

Real Discount Rate (RDR)

General Salary Growth (GSG)

Individual Salary Progr. (ISP)

Invalidity

1995 - 2006 average

1995 - 2006 average

2007 ISP table

2007 EU Inval.

3.4%

0.5%

1.6%

1996 - 2007 average

1996 - 2007 average

2008 ISP table

2008 EU Inval.

3.1%

0.4%

1.5%

Mortality of healthy persons

2004 Life table

2008 ICSLT

Mortality of invalids

2004 Life table

2008 ICSLT + 3 years

Marriage probability by sex

2004 Probability

90% M, 
60% F

2008 Probability

84% M, 
38% F

(1) A weighted average of rates has been included in some cases in this column when several rates 
from a table are used in computation

EN 

13 

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5.3. 

Demographic parameters 

5.3.1.  Reference population 

Annex XII, Article 1 of the Staff Regulations stipulates that the actuarial assessment 
shall be carried out in each year n, on the basis of the population of active members 
of the PSEO at 31 December of the previous year (n-1). On the other hand, Article 9 
of  this  Annex  provides  that  the  population  of  participants  in  the  scheme  is  to  be 
collected annually by the Commission using information received from the different 
institutions and agencies whose staff are members of the scheme. 

In accordance with these rules, the reference population is taken to be the staff at 31 
December  2007  of  the  37  institutions  and  agencies  (30  were  recorded  at  31 
December 2006) whose officials are members of the PSEO. 

Table VI. 

Institutions and Agencies in the PSEO 

Abbr.

CDCE
CEC
COJED
CONSIL
COR
CSC
EDPS
EO
EUROPARL

CDT

CEDEFOP

CEPOL
CFCA
CPVO

Name

Institutions or assimilated organisms

COURT OF AUDITORS
EUROPEAN COMMISSION
COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES
COUNCIL OF THE EUROPEAN UNION
COMMITTEE OF THE REGIONS
ECONOMIC AND SOCIAL COMMITTEE
EUROPEAN DATA PROTECTION SUPERVISOR
EUROPEAN OMBUDSMAN
EUROPEAN PARLIAMENT

Agencies

TRANSLATION CENTRE FOR BODIES OF THE EUROPEAN 
UNION
EUROPEAN CENTRE FOR THE DEVELOPMENT OF 
VOCATIONAL TRAINING
EUROPEAN POLICE COLLEGE
COMMUNITY FISHERIES CONTROL AGENCY
COMMUNITY PLANT VARIETIES OFFICE

EAA

EXECUTIVE AGENCY FOR THE PUBLIC HEALTH PROGRAMME

EACEA

EACI

EAR
EASA

ECDC

ECHA
EEA

EFRA

EFSA

EMCDDA

EMEA

EMSA

ENISA

ERA
ETF

EUROFOUND

EUROJUST

EDUCATION, AUDIOVISUAL AND CULTURE EXECUTIVE 
AGENCY
EXECUTIVE AGENCY FOR COMPETITIVENESS AND 
INNOVATION
EUROPEAN AGENCY FOR RECONSTRUCTION
EUROPEAN AVIATION SAFETY AGENCY
EUROPEAN CENTRE FOR DISEASE PREVENTION AND 
CONTROL
EUROPEAN CHEMICALS AGENCY
EUROPEAN ENVIRONMENT AGENCY
EUROPEAN MONITORING CENTRE FOR RACISM AND 
XENOPHOBIA
EUROPEAN FOOD SAFETY AUTHORITY
EUROPEAN MONITORING CENTRE FOR DRUGS AND DRUG-
ADDICTION
EUROPEAN AGENCY FOR THE EVALUATION OF MEDICAL 
PRODUCTS
EUROPEAN MARITIME SAFETY AGENCY
EUROPEAN NETWORK AND INFORMATION SECURITY 
AGENCY
EUROPEAN RAILWAYS AGENCY
EUROPEAN TRAINING FOUNDATION
EUROPEAN FOUNDATION FOR THE IMPROVEMENT OF LIVING 
AND WORKING CONDITIONS
JUDICIAL COOPERATION

FRONTEX

AGENCY FOR THE MANAGEMENT OF OPERATIONAL CO-
OPERATION AT EXTERNAL BORDERS OF MEMBER STATES

ITER

OHIM

OSHA

TNT-T

EUROPEAN JOINT UNDERTAKING FOR ITER AND THE 
DEVELOPMENT OF FUSION ENERGY
OFFICE FOR HARMONISATION IN THE INTERNAL MARKET

EUROPEAN AGENCY FOR SAFETY AND HEALTH AT WORK

TRANS-EUROPEAN TRANSPORT NETWORK EXECUTIVE 
AGENCY

EN 

14 

   EN 

 
 
As  approved  by  the  Article  83  Working  Group  at  its  meeting  of  7  June  2004,  the 
term  “active  members  of  the  PSEO”  is  considered  in  the  wide  sense  to  be 
synonymous with “contributing members of the PSEO”. Consequently, the reference 
population  includes  not  only  officials  in  “active  employment”  but  also  officials  in 
one of the other administrative statuses set out in Article 35 of the Staff Regulations, 
plus invalids who receive an invalidity allowance and beneficiaries of an allowance 
for termination of service. 
Personnel data were collected from the NAP5 (New Application for Pay), PMO6 and 
directly from institutions and agencies, and imported into the Eurostat database. The 
data were checked to  guarantee  a high level  of quality. The  actuarial assessment is 
based on the best output from the Eurostat database at the calculation date. 

Table VII. 

Reference population by administrative status 

Population as at 31.12.2007

Contributing members

Total

%

Active

- Officials

- Temporary staff

- Contract staff

Non-active staff (1)

33 370

70.1%

6 362

7 037

 827

13.4%

14.8%

1.7%

Total population

47 596

100.0%

(1).  Non-active status (Article 41), retirement in the interests of the service 

(Article 50), termination of service under special measures ("degagement"), 
invalids who receive an invalidity allowance under Article 78.

5 

6 

The NAP application is a centralised database that has been created to produce the monthly salary and 
pension forms for all institutions and agencies. This database contains a large part of the personnel data, 
particularly amounts paid and pension contributions. 
PMO use the Sysper database of the Commission to store data about transfers of pension rights of the 
staff of the Commission and agencies, and data about pensioners. 

EN 

15 

   EN 

 
 
                                                 
Table VIII.  Reference population by institution or agency 

Population as at 31.12.2007

Institution or Agency

Total

%

European Commission

European Parliament

Council of the European Union

30 213  

63.48%

6 130  

12.88%

3 300  

6.93%

Court of Justice of the European Communities

1 941  

4.08%

Court of Auditors

Economic and Social Committee

Committee of the Regions
Other small institutions and decentralised Community 
agencies

Total

 866  

 742  

 493  

1.82%

1.56%

1.04%

3 911  

8.22%

47 596  

100.00%

Figure I. 

Reference population by age 

>64

60 - 64

55 - 59

50 - 54

s
e
g
A

45 - 49

40 - 44

35 - 39

30 - 34

25 - 29

20 - 24

Men:      21878

Women: 25718

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500 0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Number of persons

EN 

16 

   EN 

 
 
 
Table IX. 

Change in the population of contributing members as at 31.12.2006  

compared to the population as at 31.12.2005 

Changes

Total

Reference population used in the 2007 assessment (contribuiting 
members as at 31.12.2006)

Contributing members who left the pension scheme or became 
pensioners 

New contributing members as at 31.12.2007

Reference population used in the 2008 assessment (contribuiting 
members as at 31.12.2007)

44 953  

-2 019  

4 662  

47 596  

Net change

2 643  

This  increase  in  the  population  is  mainly  explained  by  the  recruitment  of  “contract 
agents” (a new category of population defined in the Staff Regulations) and officials 
and temporary agents from the new Member States. 

EN 

17 

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5.3.2.  Assumed retirement age 

As stipulated in Article 4 of Annex XII to the Staff Regulations, it is assumed that all 
retirements will occur at a fixed average age (r). The average retirement age may be 
different by group of staff. 

Table X. 

Assumed retirement age and Barcelona incentive by age group of officials 

Staff group (age and years of 
service as at 30.04.2004)

Annual 
accrual rate

Barcelona 
incentive

(1)

Barcelona 
incentive 
maximum
(2)

Normal 
retirement 
age
(3)

Assumed retirement 
age (4)

Actives

Invalids

Group 1 Old Staff Regulations

2.00%

Group 2

>= 50 years old or    >= 
20 years of service

2.00%

(5)

Group 3

40 - 49 years old and < 
20 years of service

Group 4

35 - 39 years old and < 
20 years of service

Group 5

30 - 34 years old and < 
20 years of service

Group 6

< 30 years old and     < 
20 years of service

Group 7

New officials (after 
30.04.2004)

2.00%

3.00%

4.50%

2.00%

2.75%

4.00%

2.00%

2.50%

3.50%

2.00%

2.00%

1.90%

2.00%

-

-

60  

60  

61  

62  

63  

63  

63  

63  

63  

63  

63  

64  

64  

64  

65  

63  

63  

63  

64  

64  

64  

(1) The Barcelona incentive corresponds to an increase in pension expressed as a percentage of the last basic salary 
(Article 5 of Annex VIII and Article 22 of Annex XIII).

(2)  The Barcelona incentive maximum is a percentage of the total pension rights acquired by an official at the age of 
60 (Article 5 of Annex VIII and Article 22 of Annex XIII).
For example, the Barcelona incentive for officials aged between 40 and 49 is 3% of the last basic salary but not 
exceeding 4.5% of the pension rights acquired by those officials at the age of 60.

(3)  The age in this column is the simple average of ages from the table detailed in Article 22 of Annex XII, rounded to 
entire year. This average is calculated only to facilitate the presentation in this table.
In practice, institutions apply the table detailed in Article 22 of Annex XIII when calculating individual rights. Eurostat 
does not use this column when calculating the contribution rate for pension; assumed retirement ages detailed in 
columns (4) are used instead.

(4)  In accordance with to Article 3 of Annex XII, it is assumed that all retirements (except for invalidity) will occur at a 
fixed average age.

This column shows these average ages by staff group, which have been deducted from the observations in 
accordance with Article 9 of Annex XII.

(5)  Officials, aged 50 years or over or with 20 or more years service as at 30/04/2004, who remain in service after the 
normal retirement age are entitled, for each year worked after that age, to an increase in 
their pension equal to 5% of the amount of the pension rights acquired at the age of 60 (the same premise was 
applied in the past under the former Staff Regulations)..

EN 

18 

   EN 

 
 
5.3.3. 

Invalidity table  

A  first  invalidity  table  (2004-EU  Invalidity  table)  was  used  in  the  2004,  2005  and 
2006 assessments of the PSEO. This invalidity table was presented to the Article 83 
Working Group at its 7 June 2004 meeting. 

The  table  was  updated  on  the  occasion  of  the  2007  actuarial  assessment  to  take 
account of the evolution of beneficiaries of invalidity allowance (a new category of 
population  under  the  new  Staff  Regulation  in  force  from  1  May  2004).  This  new 
table  was  presented  to  the  Article  83  Working  Group  at  its  26  June  2007  meeting 
(see document 20070623 Art83 WG 07 Assumptions EN, available on CIRCA) and 
it  was  decided  to  update  the  table  each  year  using  as  input  a  moving  average  of  5 
years of invalidity observation. 

The following table shows the number of invalids from 2004 to 2007. 

Table XI. Invalids by year 

Year
2004
2005
2006
2007
Total

Invalids
103
122
108
88
421

The  following  graph  shows  the  distribution  of  the  invalids  above  by  age.  A 
considerable  increase  in  invalidity  occurs  between  ages  44  and  60.  Invalidity  is 
practically nil before the age of 35.  

Figure II.  New invalids by age — 2004 to 2007 total  

New invalids by age
(2004 to 2007 total)

30

25

20

15

10

5

0

s
d
i
l
a
v
n
i

f
o

r
e
b
m
u
N

20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66

Invalid's age s

These  invalidity  observations  have  been  used  to  update  the  invalidity  table  by  sex 
(2008-EU Invalidity table). The following table is an extract from the unisex version 

EN 

19 

   EN 

 
 
 
 
 
of  the  table.  The  unisex  version  is  only  used  for  presentation,  while  the  complete 
table by sex is used in computation. 

Table XII. 2008-EU Invalidity table — Unisex version 

Age

x
20
25
30
35
40
45
50
55
60
65

Invalidity (probability of 
becoming an invalid)

q'x
0.000059
0.000075
0.000256
0.000752
0.001486
0.002885
0.004345
0.006015
0.006520
0.003737

5.3.4.  Life table of healthy persons 

The  EU-2004  Life  table  was  built  by  Eurostat  in  2003  to  take  into  account  the 
population  of  members  of  the  PSEO  and  was  presented  to  the  Article  83  working 
group at the April 2003 meeting. As indicated in document Art83 20030411_057, this 
table was based on an average of some national life tables from Member States and 
adjusted to take account of the population of EU civil servants. 

This table was used in the annual assessments of the PSEO from 2004 to 2007. 

The  real  mortality  rate  in  the  period  2004-2007  was  analysed  and  compared  to  the 
expected mortality according to the EU-2004 Life table. The result of this analysis is 
that  mortality  in  ages  30  to  69  is  lower  and  mortality  for  ages  above  70  is  higher 
compared to the EU-2004 Life table. 

In  addition,  Eurostat  (European  Commission)  and  the  Joint  Pension  Administrative 
Section  (the  JPAS  is  a  section  working  for  the  six  Coordinated  Organisations  and 
attached to the OECD) have launched a joint project aimed at drawing up a common 
life  table  based  on  a  large  population  of  civil  servants  posted  in  Europe:  the  2008 
ICSLT  (International  Civil  Servants  Life  Table).  This  life  table  should  be  used  in 
actuarial  calculations  related  to  the  pension  schemes  of  these  civil  servants.  Both 
institutions started the project in 2005. The methodology used to set up this life table 
was  presented  to  the  Article  83  Working  Group  at  the  27 August 2008  meeting 
(document 20080627 Art83_05, available from Eurostat). 

The  analysis  of  mortality  mentioned  above  and  the  result  of  the  Eurostat-JPAS 
project lead to the following conclusions:  

–  The  2004  EU  Life  table  should  not  be  used  in  future  owing  to  the  gap  between 
expected deaths according to the life table and observed deaths in the period 2004 
to 2007, which is large, particularly for men. 

–  The 2008 ICSLT is the result of an in-depth statistical analysis and mathematical 
modelling process, whereas the former 2004 EU Life table was based on national 
life  tables  from  Member  States.  The  probability  of  dying  according  to  this  new 

7 

Documents Art83 20030411_05 (concerning actuarial assumptions) and Art83 20030411_07 (minutes 
of the 14.04.2003 Art83 WG meeting) are available from Eurostat. 

EN 

20 

   EN 

 
 
                                                 
life  table  seems  to  be  more  realistic  than  the  former  2004  EU  Life  table.  In 
addition, it represents a qualitative improvement in the field  of harmonisation at 
international and EU levels. 

Consequently, the 2008 ICSLT has been used in the 2008 pension assessment. 

The following table is an extract from this table: 

Table XIII. 

2008 ICSLT 

Men

Women

Age

Dying probability Dying probability

x, y
40
45
50
55
60
65
70
75
80
85
90

qx

0.00063370
0.00106107
0.00176523
0.00282667
0.00481751
0.00838934
0.01458993
0.02531453
0.04374552
0.07506895
0.12727809

qy

0.00054775
0.00092086
0.00152344
0.00242203
0.00372321
0.00605132
0.01074871
0.01863843
0.03307728
0.05836406
0.10193574  

5.3.5.  Life table of invalids 

It  is  normal  actuarial  practice  to  consider  life  expectancy  of  invalids  as  slightly 
shorter  than  that  of  healthy  persons  (e.g.  Eurocontrol  applies  the  mortality  rate 
corresponding to a healthy person 3 years older than an invalid’s age). This approach 
cannot be confirmed in the case of European civil servants as the number of invalids 
is too small. Eurostat considers this approach very logical and suggests applying the 
same actuarial practice in its own actuarial calculations. 

The  use  of  this  approach  makes  hardly  any  change  in  the  contribution  because  the 
probability of an active staff member becoming invalid is very small. 

The implementation of this approach in the 2008 pension assessment had a negligible 
impact,  close  to  0  percentage  points,  on  the  pension  contribution  rate  (10.9%  is 
obtained whether this assumption is used or not). 

5.3.6.  Average age difference between men and women  

The average age difference between men and women (3 years) that has been applied 
from 2004 in actuarial calculations should be used in future assessments. The result 
of  a  test  based  on  population  from  2004  to  2007  confirms  that  this  actuarial 
assumption corresponds to reality. The test showed that on average married men are 
3.01 years older than their partners and married women 3.18 years younger than their 
partners. 

5.3.7.  Probability of being married for men and women 

The probabilities for each sex of being married at retirement age used in the actuarial 
calculations  up  to  the  2007  assessment  were  calculated  in  2004  on  the  basis  of  the 
information then available. The probabilities were:  

EN 

0.90 for men 

21 

   EN 

 
0.60 for women 

Eurostat  analysed  the  recent  (2004  to  2007)  population  of  46  418  officials  and  ex-
officials  older  than  59  years  and  calculated  the  probability  of  them  being  married. 
The probabilities found for men and women are:  

0.84 for men (0.8 to one decimal place) 

0.38 for women (0.4 to one decimal place) 

These updated probabilities were used in this 2008 pension assessment. 

5.4. 

Economic parameters 

5.4.1.  Real Discount Rate (RDR) 

Annex XII, Article 10 of the Staff Regulations provides that:  

1.  The  interest  rates  to  be  taken  into  consideration  for  the  actuarial  calculations 
shall be based on the observed average annual interest rates on the long-term public 
debt  of  Member  States  as  published  by  the  Commission.  An  appropriate  consumer 
price index shall be used to calculate the corresponding interest rate net of inflation 
as needed for the actuarial calculations.  

2.  The  effective  annual  rate  to  be  taken  into  consideration  for  the  actuarial 
calculations shall be the average of the real average interest rates for the 12 years 
preceding the current year.  

Consequently, Real Discount Rates (RDRs) from 1996 until 2007 have to be used in 
the 2008 assessment of the PSEO.  

Nominal  discount  rate  (average  of  1996  to  2007  nominal  yields  of  Euro  area  zero-
coupon government bonds with a maturity of 21 years, 21 years being the duration of 
the scheme, the rate in 2007 as produced by the ECB being 4.5%): 5.3%  

Inflation rate (average of 1996 to 2007 appropriate consumer price indices, the HICP 
of the EU area in 2007 being 2.3%): 2.1% 

Real  Discount  Rate  (average  of  1996  to  2007  Real  Discount  Rates,  the  last  being 
calculated as 100*(100+NDR)/(100+IR)-100)): 3.1% (it was 3.4% in the assessment 
at 31.12.2006). 

The 12-year moving average of Real Discount Rates (RDRs) that has been calculated 
this time (3.1%) has been used in the present assessment of the PSEO. 

Table XIV. Real Discount Rate (RDR)  

EN 

22 

   EN 

 
Year

Nominal rate
(1)

1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005 (04)
2006 (04)
2007
Aver. 1995 - 2006
Aver. 1996 - 2007

8.3
7.2
6.1
4.9
5.6
5.9
5.7
5.5
5.1
5.0
4.0
4.2
4.5
5.6
5.3

Deflator index
(2)
3.0
2.6
2.1
1.7
1.1
2.4
2.5
2.2
2.0
2.1
2.2
2.2
2.3
2.2
2.1

Real discount rate 
(3)

5.1
4.5
3.9
3.1
4.5
3.4
3.1
3.2
3.0
2.8
1.8
2.0
2.2
3.4
3.1

(1) 

(2) 

(3) 

Till 1998: long-term government borrowing rates. Since 1999: Euro zero-coupon 
government bond curve with a maturity of 21 years.

Till 1998: National Accounts private consumption deflator. Since 1999: Harmonised 
Index of Consumer Prices (HICP).

The values in column 3 are obtained using the common formula for deflation i.e.: 
col.3 = 100 * (100 + col.1) / (100 + col.2) - 100

(4) 

Nominal rate estimated by Eurostat (data not available at ECB)

EN 

23 

   EN 

 
 
5.4.2.  General Salary Growth (GSG) 

As  for  the  discount  rate,  Annex  XII  contains  specific  rules  for  calculating  General 
Salary Growth. Article 11 stipulates on the one hand that the annual change in salary 
scales to be used for the actuarial calculations must be based on the specific indicator 
(SI) and, on the other hand, that the effective annual rate is to be the average of the 
net SIs for the 12 years preceding the current year.  

As the net specific indicator obtained in 2007 is -0.4%, the 12-year moving average 
from  1996  to  2007  is  0.4%  (see  Table  IV).  The  estimate  of  the  GSG  consequently 
decreases between 2006 and 2007 from 0.5% to 0.4%. 

Table XV. General Salary Growth  

Year
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Aver. 1995 - 2006
Aver. 1996 - 2007

Specific Indicator
0.2
-0.1
0.7
0.5
1.8
-0.1
0.6
1.7
1.1
-1.2
0.0
0.2
-0.4
0.5
0.4

5.4.3. 

Individual Salary Progression (ISP) 

Individual  Salary  Progression  (ISP)  refers  to  the  salary  increase  due  to  the  career 
advancement of EU officials, i.e. promotions and seniority steps.  

The  ISP  has  a  significant  impact  on  the  contribution  rate,  but  not  as  much  as  the 
RDR and GSG.  

Furthermore,  with  the  introduction  of  the  new  Staff  Regulations  on  1.5.2004,  the 
career  progression  of  EU  officials  has  been  completely  reviewed.  Annex  XIII  to 
these Staff Regulations includes transitional measures which made the determination 
of this assumption quite complicated.  

2007  ISP  rates  to  be  applied  to  officials  and  temporary  staff  from  agencies  (ISP 
groups 1 and 2) have been updated to take account of the observed promotion rates 
from 2005 to 2007 (methodology agreed at the June 2006 Art83WG meeting). 

The  2007  fixed  ISP  rate  of  0.4%  to  be  applied  to  temporary  staff  from  institutions 
(ISP groups 3 and 5) remains unchanged. 

The ISP for  group  5 was first estimated in May 2004 for the then new category of 
contract  agent.  No  actual  information  on  salary  progressions  was  available  at  the 
time.  

Contract  agents  working  in  institutions  are  limited  to  contracts  of  3  years,  while 
those working in agencies may have contracts of longer duration. The proportion of 

EN 

24 

   EN 

 
 
 
contract  agents  working  in  institutions,  and  therefore  being  limited  to  3-year 
contracts,  on  31.12.2007  was  89.4%.  The  possibilities  for  promotion  to  a  higher 
function group during an average contract period are therefore rather limited. Within 
a  function  group,  the  average  salary  increase  for  advancement  between  steps  is 
2.08%. 

These factors together suggest that the value of 1% for the ISP for group 5 was too 
high. A new estimation was carried out based on observation of the real population 
of contract agents on 31.12.2007. 

7 037 contract agents were recorded at 31.12.2007, which represent 14.8% of active 
population. 

The 2007 ISP table (rates by grade and step and number of years to retirement) has 
been  updated  and  used  in  the  2008  assessment  of  the  PSEO.  This  update  concerns 
exclusively ISP groups 1, 2 and 5. The fixed ISP concerning groups 3 and 4 (0.4%) 
that was decided at the June 2006 meeting of the Article 83 Working Group remains 
unchanged. The following table shows weighted ISP rates for publication purposes. 

Table XVI. Weighted ISP rates by group of active population and grade 

Grades

18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
Average

1
x
x
0.1%
0.8%
1.0%
0.9%
1.1%
1.3%
1.7%
1.8%
1.9%
2.2%
2.1%
1.7%
2.2%
2.3%
2.4%
2.1%
1.7%

Population groups for ISP calculation (1)
3
x
x
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%

4
x
x
x
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%
0.4%

2
x
x
x
0.9%
1.3%
0.7%
1.2%
1.5%
1.8%
1.9%
2.1%
2.3%
2.1%
2.0%
1.9%
2.0%
2.2%
2.1%
2.0%

5
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%
0.2%

Average

1.0%
1.0%
0.7%
0.8%
0.9%
0.9%
1.0%
1.2%
1.4%
1.6%
1.4%
1.8%
1.9%
1.4%
1.7%
1.8%
1.5%
1.4%
1.5%

(x)  No weighted average for ISP is calculated (grey cells in the table) where

   nobody is present in the reference population for the corresponding grade and ISP
   group. In particular, grades 17 and 18 concern only contract staff.

(1)  Population groups for ISP calculation:

  1. Officials, together with temporary staff of agencies, recruited before 01.05.2004
  2. Officials, together with temporary staff of agencies, recruited from 01.05.2004 onwards
  3. Temporary staff of institutions recruited before 01.05.2004
  4. Temporary staff of institutions recruited from 01.05.2004 onwards
  5. Contract staff recruited from 01.05.2004 onwards

ISP rates in the table above are the average of ISP rates weighted by the population 
in each grade. These average rates are calculated for publication purposes only, the 
detailed rates by grade and years to retire being used in computation. 

5.4.4.  Loading factor for orphan’s and divorced spouse’s pension  

Current actuarial practice is to add 10% to a payable reversion pension to allow for 
the  pension  payable  to  orphans  after  the  death  of  the  surviving  spouse  (or  of  the 
official if there is no surviving spouse) and any pension payable to divorced spouses. 

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Eurostat estimates that the impact of this factor on the contribution rate is minor and 
the same assumption has been used in the 2008 actuarial assessment.  

5.5. 

Annuities 

Articles 6 to 8 of Annex XII to the Staff Regulations refer to the annuities used in the 
calculation. The values of these annuities according to age are presented below. 

In  order  to  comply  with  Commission  policy  on  equal  opportunities,  values  are  not 
presented  by  sex.  However,  Eurostat  conducted  its  analyses  taking  into  account  all 
relevant  features  of  the  population,  including  sex.  The  figures  are  aggregated  by 
weighted averages only for presentation in this report. 

The table below was calculated using: 

–  the Real Discount Rate (RDR) from Table XIV, 

–  the General Salary Growth (GSG) from Table XV, 

–  an assumed retirement age (r) equal to 64 years of age for officials younger than 
35 on the reference date (31.12.2003) and equal to 63 years of age for the others, 

where: 

x is the age of the official, 

y is the age of the official’s spouse, 

m  =  r  –  x  (number  of  years  between  the  official’s  age  and  the  assumed  retirement 
age), 

y = x ± 3 according to the sex of the official. 

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Table XVII.  Some annuities in accordance with Articles 6 to 8 of Annex XII to the Staff 
Regulations 

Immediate deferred 

Immediate temporary 

annuity at 
age x
m|ax
4.077145
4.667679
5.420817
6.698698
7.797944
9.101766
10.613837
12.487924
14.710368
16.291496

reversionary annuity at 
ages x and y
m|axy
0.939091
0.938329
1.139633
1.451006
1.729317
2.028546
2.440535
2.772258
3.241113
3.541697

annuity at 
age x
ax
25.371470
24.026901
22.118410
19.497368
16.959862
14.080749
10.814064
7.102896
2.856729
0.000000

reversionary annuity at 
ages x and y
axy
0.198593
0.195879
0.205743
0.252718
0.247324
0.223312
0.175803
0.102601
0.026595
0.000000

Age

y

21
25
30
35
40
45
50
55
60
63

Immediate
 annuity at age 
y
ay
30.212143
29.480909
28.327258
26.988274
25.507685
23.860605
21.993263
19.996073
17.744328
16.291496

Age

x

21
25
30
35
40
45
50
55
60
63

 is described in Annex XII of the Staff Regulations, Article 6 § 3a

  m|ax
  m|axy
 is described in Annex XII of the Staff Regulations, Article 6 § 3b
 is described in Annex XII of the Staff Regulations, Article 7 § 2a
      ax
      axy  is described in Annex XII of the Staff Regulations, Article 7 § 2b
 is described in Annex XII of the Staff Regulations, Article 8 § 2
      ay

6. 

ANNEX II — INDEPENDENT EXAMINATION 

Ernst  &  Young  Actuaires-Conseils  conducted  an  actuarial  examination  of  the 
contribution  rate  calculated  by  Eurostat.  This  examination  consisted  in  confirming 
the  relevance  and  reliability  of  the  actuarial  processes  and  assumptions  used  in 
accordance with the methodology described in Annex XII to the Staff Regulations. 
For  the  elements  not  described  explicitly  in  this  Annex,  Ernst  &  Young  Actuaires-
Conseils  checked  their  compliance  with  generally  accepted  actuarial  practices. 
Regarding the actuarial assumptions, Ernst & Young Actuaires-Conseils carried out 
investigations  to  ensure  that  the  underlying  data  provided  by  Eurostat  were  used 
correctly. 

The executive summary from the Ernst & Young report on the actuarial examination 
is reproduced below: 

In  accordance  with  its  assignment  entrusted  by  Eurostat,  Ernst  &  Young  Actuaires-
Conseils,  as  an  independent  expert,  has  conducted  an  actuarial  examination  of  the 
2008 update of the  2004  actuarial assessment of the  pension scheme referred to in 
Article  83a  (3)  of  the  new  Staff  Regulations  for  which  Eurostat  endorsed  the 
technical responsibility towards the Commission according to the Annex XII “Rules 
for implementing Article 83a of the Staff Regulations”. This examination consisted in 
confirming  the  relevance  and  the  reliability  of  the  actuarial  processes  and 
assumptions  used  in  accordance  with  the  methodology  described  in  Annex  XII  to 
evaluate the contribution rate of officials. 

For the aspects explicitly mentioned in Annex XII, we did not detect any elements likely to 
cast doubt that the calculations determined by Eurostat are not compliant with the rules of 
Annex XII. 

For the aspects not described explicitly in Annex XII, we have checked their compliance with 
the  generally  accepted  actuarial  practices  and  we  did  not  detect  any  significant  difference 
with the methodology and the assumptions we would have chosen ourselves to perform the 
calculations. 

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Ernst  &  Young  Actuaires-Conseils  has  no  reasons  to  doubt  that  the  official’s 
contribution rate (10.9%) calculated by Eurostat and presented at the 27th June 2008 
meeting  of  the  Article  83  Working  Group  is  a  sufficiently  accurate  estimate  of  the 
reality.  However,  we  note  that  a  progressive  table  could  be  used  in  the  future  to 
better reflect the life improvement (See 6.2.2). 

The complete Ernst & Young report on the actuarial examination of the contribution 
rate is available from Eurostat. 

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