Commission Staff Working Document accompanying the Proposal for a Council Regulation adjusting, from 1 July 2011, 1 July 2012 and 1 July 2013, the rate of contribution to the pension scheme of officials and other servants of the European Union - 2013 actuarial assessment of the Pension Scheme for European Officials (PSEO) - Addendum to the 1st September 2013 Eurostat report due to the salary adjustment in accordance with Regulation (EU) Nº 423/2014 of the European Parliament and of the Council of 16 April 2014
Date: 2014-07-16
Institutions: European Commission
Subjects: European official, interest, pension scheme, servant (EU), social-security contribution, transfer of pension rights













EUR-Lex - 52014SC0240 - EN











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52014SC0240

Commission Staff Working Document accompanying the Proposal for a Council Regulation adjusting, from 1 July 2011, 1 July 2012 and 1 July 2013, the rate of contribution to the pension scheme of officials and other servants of the European Union - 2013 actuarial assessment of the Pension Scheme for European Officials (PSEO) - Addendum to the 1st September 2013 Eurostat report due to the salary adjustment in accordance with Regulation (EU) Nº 423/2014 of the European Parliament and of the Council of 16 April 2014 /* SWD/2014/240 final */









 || EUROPEAN COMMISSION ||   
Brussels, 16/7/2014 
SWD(2014) 240 final
COMMISSION STAFF WORKING
DOCUMENT
{COM(2014)
462 final}
{SWD(2014)
237 final}
{SWD(2014)
238 final}
{SWD(2014)
239 final}
Articles 83 and
83a and Annex XII of the Staff Regulations
2013 actuarial assessment of the
Pension Scheme for European Officials (PSEO)
Reference date: 31 December 2012
Addendum to the
1st September 2013 Eurostat report 
due to the salary adjustment in accordance with 
Regulation (EU) Nº 423/2014 of the European
Parliament and of the Council of 16 April 2014
Luxembourg, 15 May 2014
TABLE OF CONTENTS
1.       Introduction. 2
2.       Contribution rate. 3
3.       Analysis of the
contribution rate change. 3
APPENDIX
I – COMPUTATION.. 4
4.       Relevant figures for
calculating the contribution rate. 4
5.       Summary of main variables. 5
6.       Economic parameters. 6
6.1.        General Salary Growth (GSG) 6
7.       Impact of changes in
demographic and economic parameters in the calculation of the pension
contribution rate  7

Introduction
In May 2014 the remuneration and
pensions of officials and other servants of the European Union have been increased  0.8% effective from 1
July 2012 in accordance with Regulation (EU) Nº
423/2014 of the European Parliament and of the Council of 16 April 2014. 
As a consequence the 2012 global Specific
Indicator (SI) value, passed from -2.7% to -1.9%, which made the General Salary
Growth (GSG) rise from -0.2% to -0.1%.
Being the GSG a key parameter for the
calculation of the pension contribution rate, this last one needs also to be
updated. 
Eurostat has drawn up the present Addendum to its
1st September 2013 report, to set out the impact of the modified GSG
on the results of the 2013 assessment, based on the population of European
officials as at 31 December 2012, salaries and pensions used in the 1st
September 2013 report being increased conformably. 
Furthermore, the present addendum provides the required
information for the eventual propose of change to the staff contribution rate,
in order to maintain the pension scheme in equilibrium. 
For any further information concerning this
report, please contact Eurostat in Luxembourg: 
Eurostat, Unit C-3 Secretariat
BECH – A2/003
L-2920 Luxembourg
Tel.: (352) 4301-34821

1.      
Contribution rate

As a result of the modified GSG parameter the
calculated pension contribution rate for 2013 is 10.6% instead of the 10.3%
indicated in Eurostat's September 2013 report.
The modified 2013 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 10.6% of the basic
salary (or invalidity or termination of service allowance). This actuarial
assessment has been made in accordance with the agreed methodology.
The 10.6% calculated contribution rate is one
third of the ratio between the total of the service cost (1 204.9 million
Euros) and the total of annual basic salaries (3 785.4 million Euros). This
rate is 0.7 % higher than the one calculated in 2012 (9.9%) but not
implemented, and 0.3% higher than the one (10.3%) applied from 1st
July 2012. The 0.7% change is analysed in point 3.

2.      
Analysis of the contribution rate change

Changes to the
pension contribution rate result from the combined effect of changes in the
population structure and in actuarial assumptions. The separate impact of these
changes in the officials' contribution rate change 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. 
As indicated in point 2, the official’s pension
contribution rate calculated this year (10.6%) is higher than the one
calculated in 2012 (9.9%) but not implemented. 
This 0.7% increase is mainly explained by the
combined effect of the population evolution and actuarial assumptions update,
the most important of which being the RDR increase (2.6% in 2012 to 2.7% in
2013), the GSG increase (-0.2% in 2012 to 
-0.1% in 2013), and the Life Table update. 
Changes in
actuarial assumptions and their impact on the contribution rate were presented
in detail at the 28 June 2013 meeting of the Article 83 Working Group (see
document 20120628 Art83_05). 
APPENDIX I – COMPUTATION

Due to the new calculation, some tables from the 1st
September Eurostat report have been updated as follows: 

3.      
Relevant figures for calculating the contribution
rate

Table I.           Breakdown
of the contribution rate
Table II.          Service
cost and total amount of annual basic salaries

4.      
Summary of main variables

Table IV.         Actuarial assumptions 

5.       Economic parameters
5.1.                
General Salary Growth (GSG) 

The GSG (-0.1%) presented in this addendum, is
higher than the one used in the Eurostat report of the 1st September
2013, due to the 0.8% salary increase effective from 1
July 2012 provided for by Regulation (EU) Nº 423/2014
of the European Parliament and of the Council of 16 April 2014.
The 2012 net SI used in the moving average to
calculate the GSG as presented in the Eurostat report of the 1st
September 2013, -2.7%, has been replaced by -1.9%. 
As a consequence of the change above, the
16-year moving geometric average from 1997 to 2012 (GSG) became -0.1%, as shown
in the Table XIII below replacing the corresponding Table of the Eurostat
report at 1st September.
Table XIII.     General Salary Growth 
The effect on the
contribution rate for pension is an increase of 0.3 percentage points.

6.      
Impact of changes in demographic and economic
parameters in the calculation of the pension contribution rate

The yearly change in the calculated
contribution rate is explained by the combined effect of changes in population,
methodology, assumptions and other variables used. The calculated change +0.7% (10.6%
obtained in the present assessment against 9.9% in the assessment at 31.12.2011)
is mainly explained by the GSG increase, RDR increase, and Life Table update. 
The following table summarises the impact of
these changes.
Table XVIII. Explanation of the change in calculated
pension contribution rates
at 31.12.2012 and 31.12.2013