REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the actuarial balance of the Pension Scheme for EU Officials (PSEO) and the budgetary implications of Annex XII to the Staff Regulations
Date: 2023-04-14
Institutions: Directorate-General for Human Resources and Security, European Commission
Subjects: European official, pension scheme, social-security contribution, staff regulations (EU)

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 14.4.2023  COM(2023) 188 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the actuarial balance of the Pension Scheme for EU Officials (PSEO) and the budgetary implications of Annex XII to the Staff Regulations  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND TO THE COUNCIL 

on the actuarial balance of the Pension Scheme for EU Officials and the budgetary 
implications of Annex XII to the Staff Regulations 

1.  LEGAL BASIS 

Pursuant  to  Article  14(1)  of  Annex  XII  to  the  Staff  Regulations,  in  2022  the  Commission 
shall submit a report to the European Parliament and the Council on the actuarial balance of 
the Pension Scheme for EU Officials (PSEO) and the budgetary implications of Annex XII to 
the Staff Regulations. 

This report implements the aforementioned provision by assessing the actuarial balance of the 
scheme  and  analysing  the  budgetary  implications  of  Annex  XII  in  the  period  2014  –  2021. 
Whenever possible and where relevant, this report also refers to developments from 2022. 

2.  BASIC FEATURES OF PSEO 

2.1. Legal basis of PSEO 

Pursuant to Article 83 of the Staff Regulations: 

  The benefits paid under the pension scheme1 are to be charged to the Union budget; 

  Member States are to jointly guarantee the payment of the benefits; and 

  Officials are to contribute one third of the cost of financing the scheme. 

Article 83a of the Staff Regulations provides that the balance of the pension scheme shall be 
ensured by the pensionable age and the rate of contribution to the scheme. It also lays down 
procedures  for  annual  and  five-yearly  updates  of  the  rate  of  contribution  to  the  pension 
scheme. 

Annex XII to the Staff Regulations sets out the actuarial rules for computing the contribution 
rate in order to ensure that the scheme is in balance. 

2.2. Notional (virtual) fund principle 

The  PSEO  is  a  notional  (virtual)  fund  with  defined  benefits,  in  which  staff’s  contributions 
serve  to  finance  their  future  pensions.  Although  there  is  no  actual  investment  fund,  the 
amount that would have been collected by such a fund is considered to have been invested in 
the Member States’ long-term bonds and is reflected in the pension liability that is registered 
in the annual accounts of the European Union. Member States jointly guarantee the payment 
of the benefits pursuant to Article 83 of the Staff Regulations and Article 4(3) of the Treaty 
on European Union. 

1  

The benefits to be paid under PSEO are laid down in Chapter 3 of Title V and Annex VIII to the Staff 
Regulations.  Benefits  under  the  PSEO  include  retirement  pensions,  transfers  of  pension  rights, 
severance grants, survivor's pensions and invalidity allowances. 

1 

 
 
 
 
 
                                                           
As  the  PSEO  is  designed  as  a  notional  fund,  staff  contributions  serve  to  finance  the  future 
pensions of those contributing. The contributions actually cover the cost of the pension rights 
acquired  in  a  given  year  and  are  in  no  way  linked  to  that  year’s  pension  expenditure.  EU 
case-law has confirmed that the PSEO is a notional fund, despite finding that it also displays 
some features of a solidarity scheme2.  

The  PSEO  is  different  from  most  Member  State  pension  schemes  for  public  officials,  in 
which  the  contribution  rate  or  benefits  are  adjusted  so  as  to  ensure  a  balance  each  year 
between contributions collected and pension expenditure. In this type of schemes which links 
the  contributions  to  the  pension  expenditure  of  the  same  period  (known  as  pay-as-you-go 
schemes), if it is not possible to achieve a balance, the difference is covered from the budget.  

The  notional  PSEO  fund  is  assessed  both  annually  and  every  five  years  as  if  a  real  fund 
existed, thus further guaranteeing its long-term sustainability. 

2.3. Actuarial balance principle  

The balance of the PSEO is ensured regularly through updates of the contribution rates and, 
where relevant, the pensionable age. 

The PSEO follows an actuarial balance principle whereby annual staff contributions have to 
cover one third of the rights acquired in the year in question3, which correspond to the future 
pensions  that  the  same  staff  will  receive  after  retirement,  plus  (under  certain  conditions) 
invalidity allowances and survivor’s and orphans’ pensions.  The future pension benefits are 
evaluated at each reference date4, which involves the calculation of their present value using 
an interest (discount) rate5. This computation is an actuarial valuation.  

The  Pension  Contribution  Rate  (PCR)  is  the  mechanism  that  keeps  the  scheme  in  balance 
from year to year. It is automatically updated if the actuarial assessment foreseen by Article 
83a of the Staff Regulations shows that this is necessary in order to fully cover the pension 
rights  acquired  in  a  given  year.  Consequently,  when  staff  members  pay  the  updated 
contribution  rate,  they  acquire  pension  rights  for  a  given  year  protected  by  the  principle  of 
acquired rights. 

3.  ACTUARIAL BALANCE OF THE PSEO 

The actuarial balance of the PSEO is ensured by the annual update of the PCR, and, where 
appropriate,  the  update  of  the  pensionable  age.  The  calculation  methodology  of  the  PCR  is 
validated by national experts of the EU Member States and external actuaries (3.1). The PCR 
corresponds  to  the  ratio  between  the  service  cost6  at  year  N  and  the  total  annual  basic 
salaries/allowances at 31 December of the previous year for the same population. In order to 
calculate the service cost, a number of parameters are employed and a full set of demographic 
and  financial  assumptions  is  evaluated  (chapter  3.2).  The  actuarial  balance  of  the  PSEO  is 
guaranteed by the PCR (chapter 3.3) and the pensionable age (chapter 3.4). 

2  

3  
4     
5  

6  

See,  for  example,  Case  F-105/05,  Wils  v  Parliament,  paragraph  85  and  Case  T-439/09,  Purvis  v 
Parliament, paragraph 45. 
Article 83(2) of the Staff Regulations. 
31 December of year n. 
The  PCR  is  computed  according  to  the  ‘projected  unit  credit’  method,  as  prescribed  by  the 
International  Public  Sector  Accounting  Standard  IPSAS  39  “Employee  benefits”.  The  sum  of  the 
actuarial values of rights acquired by the contributing members of staff (referred to in actuarial practice 
as  ‘service  cost’)  is  compared  with  the  annual  total  of  their  basic  salaries/allowances  in  order  to 
calculate the contribution rate. 
The sum of the actuarial values of rights acquired by the contributing members of staff (referred to in 
actuarial practice as ‘service cost’). 

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3.1. Technical implementation of the rules for keeping PSEO in balance  

Eurostat  is  the  authority  responsible  for  the  technical  implementation  of  Annex  XII  to  the 
Staff Regulations.  

Eurostat is assisted by: 

 

 

national  experts  from  the  Member  States  (the  “Article  83  Working  Group” 
which meets at least once a year) concerning methodology questions raised by 
the implementation of Annex XII, and  
one  or  more  qualified  independent  experts  in  carrying  out  the  actuarial 
assessments of the PSEO7.  

This  system  ensures  that  the  methodology  and  results  of  the  actuarial  assessments  of  the 
PSEO  are  properly  reviewed  and  validated.  This  is  a  key  aspect  for  the  robustness  of  the 
process. 

3.1.1.  Activity of the Article 83 Working Group in the period 2014-2022 

In  the  2014-2022  period,  the  Article  83  Working  Group  has  been  meeting  every  year  in 
compliance  with  the  relevant  provision  of  the  Staff  Regulations8.  The  Article  83  Working 
Group  has  examined,  discussed,  and  approved  the  methodological  documents  drawn  up  by 
Eurostat.  

The  annual  meetings  of  the  Article  83  Working  Group  are  also  attended  by  the  observers 
representing  international  organisations  such  as  the  ISRP  (International  Service  for 
Remunerations and Pensions of the Coordinated Organisations, including the OECD, NATO, 
ESA, the Council of Europe), the European Central Bank, the European Investment Bank, the 
European Investment Fund, the European Patent Office and Eurocontrol. Eurostat exchanges 
relevant information on actuarial issues with these organisations. 

3.1.2.  Assessments by the qualified independent expert 

In accordance with Article 13, paragraph 2 of Annex XII to the Staff Regulations, Eurostat is 
assisted  by  one  or  more  qualified  independent  expert  with  regard  to  the  methodological 
implementation of that Annex and to the modelling and calculation of any involved actuarial 
assumptions. 

Following the outcomes of open call for tenders, Eurostat has been assisted by: 

-  EY Actuaires Conseils for the PSEO assessments 2014 to 2016; 
-  The  Consortium  of  Agilis  S.A.  and  Prudential  Ltd.  for  the  PSEO  assessments  from 

2017 to 2022. 

During  the  reference  period,  both  actuaries  reviewed  and  validated  the  methodology, 
calculations  and  reports  related  to  the  PSEO  assessment.  In  particular,  the  input  for 
calculations, such as the PSEO population and actuarial assumptions, were agreed with those 
external experts. 

Eurostat  has  implemented  in  its  final  assessment  reports  the  recommendations  made  by 
actuaries9. 

7  
8  
9  

Article 13, paragraph 2 of Annex XII to the Staff Regulations. 
Article 13, paragraph 4 of Annex XII to the Staff Regulations. 
The  actuaries  perform  independent  parallel  calculations  of  the  PSEO  PCR  and  deliver  an  actuarial 
opinion, which can be either "unqualified” or "qualified" (the latter happens when the actuaries’ results 
differ from Eurostat's results by more than the tolerated materiality threshold of 3%). In the case of all 

3 

 
 
                                                           
3.2. Parameters and actuarial assumptions 

The rules for the assessment of the actuarial balance of the PSEO are laid down in Annex XII 
to  the  Staff  Regulations.  It  sets  out  a  system  based  on  underlying  parameters  and 
assumptions, which ensure the actuarial balance of the PSEO. 

3.2.1.  Statutory parameters 

These are values mainly linked to the application of the Staff Regulations, including the rules 
on  calculating  pension  benefits.  Some  of  these  parameters  change  according  to  certain 
conditions related to the individual situation of each official. Annex 1 provides the list of the 
main statutory parameters used for the last pension assessment in 2022. 

3.2.2.  Actuarial assumptions 

Actuarial  assumptions  are  split  in  demographic  and  financial  /  economic  assumptions. 
Actuarial  assumptions  need  to  be  modelled  and  estimated  in  accordance  with  the  relevant 
provisions of the Staff Regulations and actuarial best practices. 

The  values  of  the  actuarial  assumptions  involved  are  agreed  by  national  experts  from  the 
relevant departments of the Member States at the yearly meetings of the Article 83 Working 
Group. 

In accordance with the provisions of Annex XII to the Staff Regulations and decisions taken 
by the Working Group, some of these assumptions (e.g. the mortality table) are updated on 
the occasion of the five-yearly assessment of the scheme while others are updated every year. 
The latest five-yearly assessment took place in 2018. 

3.2.2.1.  Demographic assumptions 

The  demographic  assumptions  are  an  essential  element  in  the  calculation  of  the  actuarial 
balance of the PSEO. With regard to the future pension benefits,  the actuarial demographic 
assumptions  are  fundamental  to  update  the  structure  of  the  population,  the  average  age  of 
retirement and the invalidity table, following the provisions of Article 9 of Annex XII to the 
Staff Regulations.  

The main demographic actuarial assumptions are: 

-  The  mortality  tables:  The  2018  EU  Life  Table  (EULT),  developed  by  Eurostat,  is  a 
prospective  table10  which  incorporates  a  trend  of  life  expectancies  over  a  20  years' 
time horizon (same time length as the PSEO duration as estimated at end 2017) based 
on the evolution of mortality of the PSEO population. The 2018 EULT is thus a life 
table built on a population entirely relevant to the PSEO. Annex 2 is an extract from 
the EULT. 

-  The invalidity tables developed by Eurostat based on past observations. 
-  The assumed retirement age; in accordance with Article 4, paragraph 3 of Annex XII 
to  the Staff Regulations,  it is  assumed that retirements will occur at  a fixed average 
rate that varies based on the date of entry into service of each staff member. 

-  The probability of being married at the retirement date.  

10  

the  PSEO  assessment  reports  issued  between  2014  and  2022,  the  actuaries  released  an  "unqualified" 
opinion.  
The prospective life tables used by Eurostat correspond to the actuarial best practices as they include 
future changes in mortality by taking into account observed and projected changes in mortality for the 
PSEO population through its lifetime. 

4 

 
 
                                                                                                                                                                                     
-  The coefficients for orphans and divorced spouses, etc.  

Actuarial demographic assumptions intervene into the calculation of the service cost based on 
which  the  PCR  is  calculated  so  as  to  ensure  the  actuarial  balance  of  the  PSEO.  Annex  3 
provides the list of demographic assumptions used for the last pension assessment in 2022. 

3.2.2.2. 

Financial assumptions11  

The  actuarial  financial  assumptions  such  as  the  real  discount  rate  and  the  general  salary 
growth have a significant impact on the functioning of the PSEO. 

The  real  discount  rate  reflects  the  real  average  interest  rates  of  long  term  public  debt  of 
Member  States,  while  the  general  salary  growth  looks  at  the  rate  of  annual  change  in  the 
salary scales. In both cases a 30-year moving average of the corresponding rates is used12. In 
the  2022  yearly  PSEO  assessment,  the  values  of  the  real  discount  rate  and  general  salary 
growth were respectively 2.7% and -0.1%. 

The  individual  salary  progression  table  is  another  key  actuarial  financial  assumption.  The 
individual  salary  progression  captures  the  effect  of  the  salary  increase  linked  to  the  career 
advancement of the EU staff due to promotions and seniority steps. The 2014 reform of the 
Staff Regulations reinforced the link between grade and function. For example, access to the 
highest  grades in function groups AD and AST  was severely restricted.  Additionally a new 
category  of  staff  was  introduced:  Secretary  and  Clerks  (AST/SC).  These  evolutions  have 
been reflected by the individual salary progression. 

Annex  4  provides  the  list  of  financial  assumptions  used  for  the  last  pension  assessment  in 
2022 as well as a sensitivity analysis of the variation of these assumptions. 

3.3. Implementation of the principle of actuarial balance  

The  balance  of  the  PSEO  is  ensured  through  the  updates  of  the  PCR  pursuant  to  the 
provisions under Annex XII to the Staff Regulations and, where appropriate, the pensionable 
age.  In  light  of  this,  the  PSEO  is  by  definition  always  in  actuarial  balance.  Whereas  the 
pensionable age may be updated every five years, the PCR is assessed every year by Eurostat. 

The Staff Regulations lay down a system for the update of the PCR based on two thresholds: 
a “floor” and a “ceiling” threshold. The floor threshold refers to the minimum gap between 
the  rate  in  place  and  the  rate  needed  to  keep  the  actuarial  balance  (0.25  points).  This 
provision, on the one hand significantly reduces administrative burden by updating the PCR 
only when its changes would significantly impact the actuarial balance of the PSEO, and on 
the other ensures that the PCR remains stable and predictable for staff. The ceiling threshold 
establishes  that  the  PCR  shall  not  be  updated  by  more  than  one  percentage  point  above  or 
below the valid rate of the previous year. This provision ensures that staff is protected from 
abrupt  changes  of  the  PCR  in  short  periods  and  that  the  contribution  to  the  EU  budget 
remains relatively stable.  

Annex 5 demonstrates that the PSEO has been kept in actuarial balance throughout the period 
2014-2022. The balance was ensured by the PSEO yearly assessments conducted by Eurostat 
and  the  resulting  PCR  change,  i.e.  the  PCR  value  corresponds  to  one  third  of  the  ratio 
between the total of the service cost and the total of the annual basic salaries/allowances. In 

11  
12  

Sometimes referred to as “economic actuarial assumptions”.  
Articles 10 and 11 of Annex XII to the Staff Regulations.  

5 

 
 
                                                           
addition, the difference between the calculated and applied PCR did not imply a significant 
material consequence and therefore the PSEO remained in actuarial balance. 

3.4. Assessment of pensionable age 

The system  of regular  assessments  of the pensionable age  laid down by the co-legislator in 
2014 also ensures the sustainability of the PSEO. By establishing a clear link between the EU 
staff life expectancy and the EU staff pensionable age, the Staff Regulations ensure that the 
PSEO is adequate in a context of general ageing population. 

The  normal  pensionable  age,  which  is  defined  as  the  age  allowing  staff  members  to  retire 
without  penalties,  is  set  at  66  years  by  the  Staff  Regulations.  Pursuant  to  Article  77, 
paragraph 7 of the Staff Regulations, the pensionable age shall be reviewed every five years 
on the basis of a Commission report assessing the evolution of the pensionable age for staff in 
the civil services of the Member States and the evolution of life expectancy of officials of the 
EU institutions.  
In its 2021 assessment of the pensionable age13 the Commission observed that life expectancy 
of the PSEO population, as assessed by Eurostat’s Life Tables, did not increase significantly. 
Moreover,  the  EU  officials’  pensionable  age  is  among  the  highest  compared  to  the 
pensionable ages applicable in the EU Member States’ public services. As a result, this report 
concluded  that  the  current  pensionable  age  of  66  years  for  EU  staff  was  appropriate  and 
corresponded to the highest standards applicable in the national civil services of the Member 
States.  

4.  BUDGETARY IMPLICATIONS OF THE PSEO  

4.1. Background 

4.1.1.  Historical context of the PSEO  

In the 1960s, the Council decided that staff contributions would not be set aside in an actual 
pension  fund,  but  would  instead  be  credited  to  the  EU  budget  at  the  time  when  they  are 
collected  and  spent  in  accordance  with  the  decisions  of  the  budgetary  authority,  i.e.  not 
assigned to any particular policy field.  

At the same time, the Council decided that the employer’s share of the contribution would not 
be  collected.  Instead,  the  EU  institutions  undertook  to  pay  future  pension  benefits  (to  be 
charged to the Union budget) when staff retire. Although there is no actual investment fund, 
the amount that would have been collected by such a fund is considered to have been invested 
in Member States’ long-term bonds and is reflected in the pension liability that is registered 
in the annual accounts of the European Union.  

As Member States jointly guarantee the payment of the benefits pursuant to Article 83 of the 
Staff Regulations and Article 4(3) of the Treaty on European Union, the budget is, in effect, 
borrowing  this  money  from  the  members  of  the  scheme,  in  return  for  a  guarantee  to  pay 
future benefits.  

13  

Report from the Commission to the European Parliament and the Council pursuant to Article 77 of the 
Staff Regulations – COM(2021) 94.  

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4.1.2.  Creation of an actual pension fund  

Four  possibilities  for  establishing  an  actual  pension  fund  for  the  EU  institutions  have  been 
explored by the Commission in 201214. Each option entailed various costs depending on the 
envisaged  transition.  However,  in  2013,  when  agreeing  on  the  2014  reform  of  the  Staff 
Regulations, the co-legislator decided to maintain the principle of a notional pension fund for 
EU institutions.  

In order to  create an  actual pension fund,  the EU budget  would have to  transfer  part of the 
PSEO liability into the fund. However, the current value of the liability, as calculated on the 
basis  of  the  latest  interest  rates,  is  very  unfavourable  for  such  a  move.  In  addition,  the 
creation of an actual pension fund would necessarily increase the yearly pension expenditure 
and  lower  the  revenues  to  the  EU  budget.  Therefore,  in  light  of  the  current  availabilities 
under  the  multiannual  financial  framework  (MFF),  such  an  approach  is  not  feasible. 
Moreover,  even  if  an  actual  pension  fund  would  have  been  created,  financial  markets’ 
volatility could question the opportunity of investing the reserve of such a fund.  

4.2. Population of the PSEO 

4.2.1.  Active staff 

4.2.1.1.  Evolution of staff 

In  the  Interinstitutional  Agreement  of  2  December  201315,  EU  Institutions  agreed  on  a  5% 
reduction  of  posts  in  the  respective  establishment  plans.  In  2017,  the  European  Court  of 
Auditors  (ECA)  confirmed  that  all  EU  Institutions  and  agencies  implemented  the  5%  staff 
reduction between 2013 and 2017, albeit with some delays16. 

At the same time, as already observed by the ECA in 2017, the budgetary authority granted 
new  posts  and  credits  for  the  recruitment  of  contract  agents  to  the  institutions,  bodies  and 
agencies  in  the  framework  of  the  annual  budgetary  procedure.  These  posts  were  made 
available mostly to cater for the additional tasks granted to EU institutions (this explains the 
significant increase in the number of posts granted to agencies), and the accession of Croatia. 

Hence,  whilst  the  Commission  staff  slightly  decreased  between  2014  and  2021,  the  overall 
active population of EU Institutions increased from 58.567 to 66.120 (Annex 6). The increase 
mainly  stems  from  the  executive  and  decentralised  agencies  and  Joint  Undertakings  as  a 
result  of  the  decisions  taken  by  the  budgetary  authority  to  extend  certain  fields  of  activity 
(e.g. Frontex) and to create new bodies and agencies, e.g. the Single Resolution Board17, the 
European  Public  Prosecutor  Office18,  the  European  Labour  Authority19  and  the  European 
Health and Digital Executive Agency20.  

14  

15  

16  

17  

18  

Report from the Commission to the European Parliament and the Council on the Pensions Scheme of 
Officials and Other Servants of the European Union, COM(2012)37 final.  
Interinstitutional  Agreement  of  2 December  2013  between  the  European  Parliament,  the  Council  and 
the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial 
management. 
European  Court  of  Auditors  Rapid  case  review  on  the  implementation  of  the  5  %  reduction  of  staff 
posts.  
Regulation  (EU)  No  806/2014  of  the  European  Parliament  and  of  the  Council  of  15  July  2014 
establishing uniform rules and a uniform procedure for the resolution of  credit institutions and certain 
investment  firms  in  the  framework  of  a  Single  Resolution  Mechanism  and  a  Single  Resolution  Fund 
and amending Regulation (EU) No 1093/2010. 
Council  Regulation  (EU)  2017/1939  of  12  October  2017  implementing  enhanced  cooperation  on  the 
establishment of the European Public Prosecutor’s Office (‘the EPPO’). 

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4.2.1.2.  Composition of staff 

The  staff  increase  observed  in  agencies  and  other  bodies  affects  the  overall  composition  of 
EU staff by increasing the share of temporary and contract agents. These agents, regardless of 
the nature of their contracts, have lower remuneration and/or slower career advancement than 
officials. In addition, contract agents fall under a different salary grid than officials21 and their 
pension entitlements are adjusted in case they would become officials22.  

Both,  the  2004  and  2014  reforms  of  the  Staff  Regulations  were  subject  to  transitional 
provisions given that pension rights are protected under the principle of acquired rights.  By 
laying  down  transition  rules  under  Annex  XIII  to  the  Staff  Regulations,  the  co-legislator 
provided  for  the  coexistence  of  three  cohorts  of  staff  members.  For  instance,  whilst  the 
default annual accrual rate is 1.8% for staff recruited from 1 January 2014, it is 1.9% for staff 
recruited between 1 May 2004 and 31 December 2013 and 2% for those recruited till 30 April 
2004.  

Since  the  2014  reform  of  the  Staff  Regulations,  the  share  of  active  staff  members  falling 
under  the  pre-2004  rules  decreased  from  36%  to  19%  whilst  active  staff  members  falling 
under the rules in place since 1 January 2014 represent almost 48% of active staff members 
(Annex 7).  

At the same time, and because staff members recruited after the 2004 and 2014 reforms of the 
Staff  Regulations  are  the  most  recent  active  members  of  the  PSEO,  the  share  of  the 
pensionable years they acquired – which will be subject to the stricter conditions defined in 
2004 and 2014 – is increasing progressively. It represents 60% of all pension rights acquired. 
When looking only at pension rights acquired under the post-2014 rules, it already represents 
a significant part (22%) of the overall share of pensionable years acquired by staff members 
(Annexes 8 and 9). This reflects the ever-increasing effects the 2004 and 2014 reforms of the 
Staff Regulations will have in the future.  

4.2.2.  Pensioners 

Since 2014, the number of pensioners increased. This results from the progressive expansion 
of  the  EU  workforce  resulting  from  the  successive  enlargements  of  the  EU  and  the 
broadening of its tasks. In the longer term, as active staff move into retirement, the headcount 
of  pensioners  will  necessarily  increase.  The  increase  will  continue  until  the  time  when  the 
number of retirees in a given year balances the number of actives23.  

19  

20  

21  
22  

23  

Regulation  (EU)  2019/1149  of  the  European  Parliament  and  of  the  Council  of  20  June  2019 
establishing  a  European  Labour  Authority,  amending  Regulations  (EC)  No  883/2004,  (EU)  No 
492/2011, and (EU) 2016/589 and repealing Decision (EU) 2016/344. 
Most decentralised agencies are either created by the Council on the basis of Article 352 of the Treaty 
on  the  Functioning  of  the  European  Union,  or  by  the  Parliament  and  the  Council  on  the  basis  of  a 
specific Treaty provision. Currently, 35 decentralised agencies have been established on this basis, over 
a period of 40 years.  
Article 93 of the CEOS.  
Article 3(d) of Annex VIII  to the Staff Regulations establishes that the pensionable years of Contract 
Agents  who later become officials must be calculated on the basis of the ratio between the last basic 
salary received as a  member of the contract  staff and the  first basic salary received as an official. In 
other  words,  pension  rights  acquired  by  Contract  Agents  who  become  officials  are  lower  than  staff 
recruited as officials from the first day. 
This corresponds to one of the definitions of maturity for a pension scheme.  

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Annex 10 shows that currently the pre-2004 cohort represents almost 90% of all pensioners, 
whereas  pensioners  falling  under  pre-2014  rules  represent  9%,  and  those  falling  under  the 
post-2014 rules represent only 1% of all pensioners. For the latter, this is only normal as – as 
a general rule – 10 years of service are required to be entitled to a PSEO pension 24. It follows 
that  progressively  staff  members  falling  under  the  post-2004  and  post-2014  rules  will 
represent the majority of retired staff, the effects of the two successive reforms introduced by 
the co-legislator in 2004 and 2014 will be further significantly reinforced.  

4.3. Revenues from the PSEO 

Since  2014,  the  PSEO  generated  EUR  5.8  billion  revenues  for  the  EU  budget.  These  are 
composed  of  staff  members’  pension  contributions,  staff  members’  transfers  of  pension 
rights, contributions paid by the United Kingdom on the basis of the Withdrawal Agreement25 
and contributions by decentralised agencies and international organisations taking part to EU 
programmes.  

4.3.1.  Proceeds of the pension contribution rate 

Pension  contributions  are  based  on  actuarial  calculations  done  by  Eurostat  to  ensure  the 
actuarial  balance  and  the  sustainability  of  the  PSEO.  Whilst  in  certain  Member  States, 
national  civil  servants  do  not  pay  any  pension  contribution  rate,  the  PCR  paid  by  EU  staff 
represents one of the highest rates compared to pension schemes in the public services of the 
Member States (Annexes 17 to 20). 

The calculated contribution makes that staff members finance one third of the pension rights 
acquired  every  year.  The proceeds from  such  contributions  are not  assigned to  any specific 
budget line and are used to finance EU policies, limiting contributions required from Member 
States  for  supporting  the  EU  Institutions  to  deliver  on  the  many  tasks  they  have  been 
entrusted with. Since 2014, this amounts to EUR 4.2 billion euros that were used to finance 
the budget. In 2022 alone, it represented more that EUR 500 million.  

4.3.2.  Revenues from staff members’ transfers of pension rights 

Staff  members  have  the  possibility  to  transfer  under  the  PSEO  the  pension  rights  they 
acquired  under  national  pension  schemes  or  pension  funds26.  This  involves  the  transfer  of 
capital representing the rights which they have acquired through their professional activities 
performed before entering into the service of the EU.  The capital  equivalent  to  the pension 
rights is transferred by the original pension scheme and converted into the PSEO as years of 
pensionable  service.  These  years  of  pensionable  service  are  taken  into  account  in  the 
calculation of the retirement pension under the PSEO. These transfers represent the entirety 
of  the  capital  (3/3),  corresponding  to  the  actuarial  equivalent  of  the  pension  rights 
acknowledged under the PSEO. They brought to the EU budget EUR 950 million euros since 
2014  and  bring  on  average  more  than  EUR  100  million  per  year  to  the  EU  budget  (Annex 
12).  

24  

25  

26  

The 1% of pensioners covered by the post-2014 rules represent those who either reached pensionable 
age whilst having less than 10 years of service or those who, whilst having completed at least ten years 
of service, changed contract and – as a result – fell under the post-2014 rules.  
Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the 
European Union and the European Atomic Energy Community 2019/C 384 I/01. 
Articles 11 and 12 of Annex VIII to the Staff Regulation. 

9 

 
 
                                                           
4.3.3.  Contributions from the United Kingdom  

The  Withdrawal  Agreement27  provides  that  the  contracting  parties  agreed  that  the  United 
Kingdom shall be liable for its share of the Union's liability for pension rights and rights to 
other employment-related benefits accrued on or before the end of the transition period on 31 
December 2020. This liability covers pension rights of all staff members regardless of their 
nationality. 

The  Withdrawal  Agreement  further  provides  that  the  United  Kingdom  shall  contribute 
annually to the net payments made from the Union budget to each beneficiary. Alternatively, 
under  the  last  paragraph  of  Article  142(6),  the  United  Kingdom  may  request  to  pay  the 
outstanding liability at 31 December of a given year.  

Regarding  staff  pensions,  the  United  Kingdom  has  chosen  the  option  of  the  annual 
instalments. In 2022, the United Kingdom contributed EUR 235 million to the net payments 
made from the Union budget for pensions of former EU staff. In the coming years, the United 
Kingdom  will  continue  financing  its  share  of  the  pension  expenditure  calculated  as  a  fixed 
percentage of the evolving pension expenditure. 

By ensuring the United Kingdom’s recognition of its liability for the pension rights acquired 
by all EU staff before the end of the transition period, the Withdrawal Agreement guarantees 
the  continued  contribution  of  the  United  Kingdom  to  the  PSEO  notional  fund.  Thus,  the 
United Kingdom’s decision to withdraw from the EU would not entail any additional cost for 
the EU budget.  

4.3.4.  Contributions from non-subsidised agencies and third parties taking part 

to EU programmes  

In line with Article 83a, paragraph 2 of the Staff Regulations, agencies which do not receive a 
subsidy from the general budget of the European Union shall pay into that budget the entire 
amount of the contributions needed to finance the scheme.  

In addition, EU programmes and actions sometimes involve the participation of third parties 
(e.g.  third  countries).  Because  their  participation  may  require  the  recruitment  of  additional 
staff  members  for  the  implementation  of  programmes,  the  Commission  ensures  that  third 
parties’  contributions  to  the  budget  also  cover  the  employer  share  of  staff  future  pension 
entitlements.  

These contributions generate revenues for the budget whilst ensuring that future pension costs 
have been covered. Since 2014, this represents almost EUR 400 million of revenues for the 
budget (Annex 13). 

4.4. Expenditure from the PSEO 

During  the  first  years  of  its  implementation,  the  EU  pension  scheme  has  produced  –  in 
budgetary terms – net revenue, i.e. the contributions from active staff acquiring pension rights 
have outweighed the benefits drawn by a limited number of retirees. Pension scheme revenue 
has  consisted  of  staff  and  employer  contributions;  the  latter  were  not  paid  into  a  fund,  but 
only  reflected  in  the  pension  liability.  In  this  way,  the  EU  budget  was  actually  borrowing 
money from scheme members in return for a guarantee to pay future benefits.  

27  

See Articles 142(2) and 142(6)  of the Agreement on the withdrawal of the United Kingdom of Great 
Britain and Northern Ireland from the European Union and the European Atomic Energy Community 
2019/C 384 I/01. 

10 

 
 
                                                           
Annex  14  shows  the  evolution  of  the  pension  expenditure  between  2014  and  2022.  It 
increased  at  an  average  of  6.2%  per  year.  This  includes  the  effects  of  the  update  of 
remuneration and pensions.  

The  current  level  of  pension  expenditure  reflects  to  a  very  large  extent  the  payment  of  the 
pension  rights  acquired  under  the  pre-2004  rules,  which  apply  to  90%  of  the  pensioners. 
These rules provided notably for a 2% yearly pension accrual rate, the application of pension 
correction coefficients, higher entry salaries, lower pensionable age and a staff composed of 
officials  and  temporary  agents  only.  Annex  15 shows the evolution  of the costs attached to 
the payment of pension correction coefficients.  

The  share  of  pensioners  falling  under  the  scope  of  post-2004  rules  has  increased  steadily. 
Whilst staff members recruited after 1st of May 2004 but before 1st of January 2014 currently 
represent  9% of the pensioners, all active staff  members falling under these rules will have 
lower  pension  entitlements  as  a  result  of  lower  entry  grades,  lower  accrual  rate  and  the 
absence of pension coefficients. This will be fully reflected in the pension expenditure once 
these staff members will reach pensionable age. In the longer term, savings resulting from the 
2004 reform will continue increasing, up to one billion per year in the long term28.  

Given that only 1%  of  current  pensioners fall under post-2014  rules, the  structural  changes 
introduced by the co-legislator in 2014 (i.e. increased retirement age, reduced yearly pension 
accrual  rate, reduced career progression, creation of a lower salary scale  for  secretarial  and 
clerical  jobs)  will  fully  materialise  only  when  staff  members  falling  under  the  post-2014 
pension rules will take their pensions. This means that the effects on the pension expenditure 
of the most recent  structural  changes introduced  by the  co-legislator in  2014 will gradually 
increase  as  an  increasing  share  of  staff  members  recruited  after  2014  will  become 
pensioners29.  

In light of the above, the pension expenditure will continue growing reflecting the increase of 
the  workforce  of  the  EU  institutions,  especially  in  agencies  or  through  the  creation  of  new 
bodies. At the same time, the two successive reforms of the Staff Regulations  have already 
generated  significant  savings.  These  savings  will  keep  increasing  as  staff  members  falling 
under the 2004 and 2014 stricter rules will start receiving a pension.  

4.5. PSEO liability 

The  PSEO  is  a  notional  (virtual)  fund  with  defined  benefits.  Because  there  is  no  actual 
investment fund, the amount that would have been collected by such a fund is considered to 
have  been  invested  in  the  Member  States’  long-term  bonds  and  is  reflected  in  the  pension 
liability that is registered in the annual accounts of the European Union.  

The EU annual accounts are prepared according to accounting rules based on Internationally 
Accepted Accounting Standards (IPSAS 39), the highest available standards. The figure for 
pension and other post-employment liabilities presented on the EU balance sheet represents 
the  actuarial  valuation,  at  current  monetary  values,  of  the  EU  obligation  to  pay  the  future 
pensions and other rights, acquired by its staff (actives, invalids and retirees). This valuation 
is based on the forecasted payments to be made by the EU budget to  the current and future 
retirees over a time horizon of several decades. 

28  
29  

2010 Eurostat study on the long-term budgetary implications of pension costs. 
In order to draw a pension under the Staff Regulations, staff members should be affiliated at least ten 
years or reach pensionable age whilst in service. 

11 

 
 
                                                           
One of the key variables required for the calculations is the Real Discount Rate. This rate is 
necessary to calculate the present value of the expected  future benefits. That interest rate is 
obtained  from  the  nominal  interest  rates  and  the  inflation  rates30,  thus  involving  a  double 
source of volatility. In that respect, the recent increases of the liability resulted almost entirely 
from  the  sharp  decline  of  the  long-term  interest  rate  used  to  value  employee  benefit 
obligations:  the  real  discount  rate  became  recently  even  negative,  meaning  that  any  given 
amount is worth more today than in the future. For instance, in 2021, the real discount rate 
passed  from  -0.2%  to  -0.8%.  This  change  led  to  an  increase  of  the  liability  of  almost  
EUR 14 billion (+14.5%) to EUR 126 billion31.  

The  figure  for  pension  and  other  post-employment  liabilities  presented  on  the  EU  balance 
sheet  has clear  accounting purposes.  However,  it  is  a very volatile  figure subject  to market 
conditions  and  macroeconomic  fluctuations.  Therefore,  it  has  limited  value  in  terms  of 
assessing the real budgetary implications of PSEO.  

The above conclusion is further illustrated with the following two considerations: 

First, it should be noted that while the rate of interest significantly impacts the current value 
of the EU’s future pension obligations as presented on the balance sheet at a particular point 
in time, it does not change the amount of pensions that will have to be actually paid – it only 
reflects the current value of those amounts at a particular moment in time.  

Second, an estimation of the same liability calculated by using the interest rate applicable for 
the calculation of the PCR under the Staff Regulations would reduce drastically the amount 
and the volatility of the liability as calculated according to IPSAS 39 standards. For example, 
by applying the interest  rate used for the calculation of the PCR (+2.7% in 2021), which is 
calculated in line with the Staff Regulations32 and along the best actuarial standards on a long 
term  moving  average  over  30  years  of  interest  rates  of  long  term  public  debt  of  Member 
States,  the  hypothetical  value  of  the  pension  liability  with  the  actuarial  assumptions  of  the 
pension assessment would decrease from EUR 126 billion to EUR 62.6 billion, a reduction of 
more than a half (Annex 16). 

5.  THE 2004 AND 2014 REFORMS OF THE STAFF REGULATIONS AND THEIR EFFECTS 

5.1. THE 2004 AND 2014 REFORMS OF THE STAFF REGULATIONS  

With the 2004 reform of the Staff Regulations, the co-legislator decided to make significant 
structural changes to statutory rules affecting directly pension entitlements. In particular, this 
involved: 

increased pensionable age from 60 to 63 years,  
lower entry salary levels – in particular for administrators,  
lower yearly pension accrual rate (1.9%), 
a new staff category with a lower salary scale (contract agents), 

- 
- 
- 
- 
-  phasing out of correction coefficients applicable to pensions.  

With  the  2014  reform  of  the  Staff  Regulations,  the  co-legislator  decided  to  introduce 
additional changes affecting significantly pension entitlements of the staff members recruited 
after 2014. This involved in particular: 

30  

31  

32  

Market  expectations  in  terms  of  yield  of  the  government  bonds,  plus  expectations  as  regards  the 
inflation. 
Chapter 2.9 “Liabilities – Pensions and other employee benefits” of the Consolidated annual accounts 
of the European Union. 
Article 10 of Annex XII to the Staff Regulations. 

12 

 
 
                                                           
- 
- 
- 

- 

increased pensionable age to 66 years,  
lower yearly pension accrual rate (1.8%),  
reduced career perspectives to ensure a stronger correlation between the grade and the 
function,  
a new staff category with a lower salary scale (secretarial and clerical jobs).  

At  the  same  time,  the  co-legislator  provided  for  a  more  favourable  salary  scale  for  staff 
members recruited before 2014, as a compensation to the limitations of careers introduced at 
the  occasion  of  the  2014  reform  of  the  Staff  Regulations33.  Finally,  in  addition  to  these 
structural changes, the co-legislator provided for freezes (2011, 2013 and 2014) and a lower 
adjustment (2012) of pay and pensions. 

5.2. EFFECTS OF THE 2004 AND 2014 REFORMS OF THE STAFF REGULATIONS 

5.2.1.  EFFECTS ON THE FUNCTIONING OF THE SCHEME 

The two successive reforms of the Staff Regulations generated and will continue to generate 
significant  savings.  These  reforms  have  put  the  PSEO  at  the  forefront  when  compared  to 
national  pension  schemes.  At  the  same  time  the  reforms  of  the  PSEO  impacted  the 
attractiveness  of  the  EU  institutions,  as  the  PSEO  remains  an  essential  feature  of  the 
remuneration package of the EU civil servants34.  

5.2.1.1.  THE REGULAR UPDATE OF KEY PARAMETERS 

The PSEO is a very flexible scheme continuously monitored, as key assumptions such as the 
PCR and the pensionable age are regularly assessed and updated if necessary. 

The PCR is assessed every year and updated if necessary. As shown in Annex 17, only one 
Member State has a system based on an automatic update of the PCR as it is the case under 
the  PSEO.  Other  Member  States  update  it  only  occasionally,  based  on  political  decisions, 
rather than actuarial calculations or do not update it at all. 

This automatic update mechanism ensures that the level of contribution paid by EU staff (i.e. 
10.1%  in  2022)  is  the  one  required  to  finance  their  accrued  pension  entitlements,  which 
ensures  the  actuarial  balance  of  the  PSEO.  The  level  of  contributions  is  among  the  highest 
when  compared  to  that  paid  by  national  civil  servants  (Annex  18).  Moreover,  in  several 
Member  States,  civil  servants  are  not  subject  to  any  contribution  to  finance  their  pension 
benefits.  

In line with Article 77 of the Staff Regulations, the EU staff pensionable age can be adjusted. 
As shown in Annex 19, only one Member State has a pensionable age higher than the EU. In 
most  of  the  EU  Member  States,  the  pensionable  age  is  updated  either  regularly  or 
occasionally, to reflect the evolving life expectancy. At the same time, for one third of the EU 
Member States, such a link does not exist. Annex 20 shows that the PSEO not only has such 
link  in  place,  but  also  that  the  rules  governing  the  PSEO  envisage  regular  updates  of  the 
pensionable  age,  as  underlined  in  chapter  3.4.  Such  updates  are  based  on  mortality  tables, 
thereby linking pensionable age to life expectancy35. 

33  
34  

35  

Article 30 of Annex XIII to the Staff Regulations. 
Court of Auditor’s Special report no 15/2019: Implementation of the 2014 staff reform package at the 
Commission - Big savings but not without consequences for staff. 
Eurostat  used  prospective  life  tables.  The  prospective  EU  Life  Tables  developed  by  Eurostat 
incorporate a trend of continuous increase of life expectancies over 20 years. 

13 

 
 
                                                           
These  adaptations  ensure  that  the  PSEO  remains  sustainable  whilst  corresponding  to  the 
highest standards when compared to pension schemes from the Member States.  

5.2.1.2.  ROLE OF THE PSEO IN THE ATTRACTIVENESS OF EU INSTITUTIONS 

When  being  offered  a  job,  highly  qualified  experienced  professionals  seeking  employment 
are likely to give more consideration to the role of pensions in the reward package than are 
younger  candidates.  Also,  candidates  who  have  previously  worked  in  the  private  or  public 
sector  have  acquired  some  experience  and  sensitivity  in  dealing  with  retirement  issues. 
Candidates  who  leave  the  system  with  which  they  are  familiar  to  enter  a  new,  unfamiliar 
system are likely to pay particular attention to this new system. Lastly, candidates who favour 
(job)  security  and  a  predictable  career  over  top  salaries  in  less  stable  employment  will  pay 
greater attention to the pension scheme. The typical staff member newly recruited by the EU 
Institutions is likely to fall into one of these categories. As the institutions typically employ 
persons who started their career elsewhere and who are therefore 36 years old on average, the 
importance  of  the  pension  system  in  the  overall  attractiveness  of  the  reward  package  is 
believed  to  be  higher  than,  for  example,  for  public  employees  in  Member  States  who  start 
their  careers  in  public  administration  immediately  after  graduating.  The  fact  that  almost  all 
new recruits have previously worked elsewhere is also proved by the number of transfers of 
pension rights acquired outside the EU institutions to the PSEO.  

5.2.2.  SAVINGS  RESULTING  FROM  THE  2004  AND  2014  REFORMS  OF  THE  STAFF 

REGULATIONS 

Both  reforms  of  the  Staff  Regulations  introduced  structural  changes  affecting  pension 
entitlements such as the increases of the retirement age, the reductions of the accrual rate, the 
limitations  of  the  remuneration  levels  by  reducing  career  perspectives  and  introducing  new 
salary scales (e.g. contract agents and secretaries and clerks), and the suppression of pension 
coefficients. These changes  were subject to transitional provisions given that pension rights 
are protected under the principle of acquired rights. The 2014 reform of the Staff Regulations 
also imposed freezes that affected directly the level of pensions.  

The  structural  effects  of  the  2004  and  2014  reform  of  the  Staff  Regulations  can  be  better 
appreciated  if  one  looks  at  the  active  population,  given  that  only  9%  of  the  current 
beneficiaries  fall  under  the  post-2004  rules  and  just  1%  is  covered  by  the  post-2014  rules 
(Annex 10).  

Since 2004, the average pension rights accrued by beneficiaries of a pension decreased from 
64.6% in 2004 to 61.7% at the end of 2021 (Annex 21). This resulted both from: 

 
 

the lower accrual rates introduced in 2004 and 2014 and  
the ever increasing average age of entry into the EU civil service.  

Given that the share of pensioners falling under post-2004 and post-2014 rules will increase 
in  the  future,  the  observed  sharp  decrease  of  the  average  pension  rights  acquired  by 
beneficiaries  will  continue  decreasing  over  the  next  years.  In  addition,  the  progressive 
phasing  out  of  pension  correction  coefficients  will  also  result  in  considerable  savings36 
(Annex 15). 

36  

Since  2014,  correction  coefficients  applied  to  pensions  had  a  cost  of  EUR  400  million.  Their 
progressive phasing out will represent significant savings in the future.  

14 

 
 
                                                           
These structural changes are also reflected by the evolution of the average basic salary when 
entering  the  service  (-15%)  and  when  leaving  the  service  (-11%).  This  confirms  the  far 
reaching  effects  of  the  two  reforms  of  the  Staff  Regulations  on  the  level  of  remuneration, 
which directly affect the level of ensuing pension benefits. 

In addition to these structural changes, the 2014 reform of the Staff Regulations alone already 
generated  around  EUR  1.5  billion  savings  in  pension  expenditure  as  compared  to  the 
budgetary estimates preceding the 2014 reform of the Staff Regulations (Annex 22).  

Finally,  going  beyond  the  actuarial  logic  on  which  the  PSEO  is  based,  from  budgetary 
perspective  it is  interesting to  note that the current  level  of the service cost  (i.e.  EUR  1700 
million  representing  the  sum  of  the  actuarial  values  of  rights  acquired  by  contributing 
members of staff in a given year) is lower than the current level of the pension expenditure 
(EUR  2400  million).  In  other  words,  if  the  entirety  of  the  pension  rights  acquired  by  staff 
members in 2022 were put aside in a funded pension fund, it would be a lower amount than 
that of pension expenditure in current prices. This is another illustration of the effectiveness 
of  the  two  successive  reforms  of  the  Staff  Regulations.  As  a  result,  though  more  staff 
members are acquiring pension rights, they acquire significantly lower pension entitlements.  

6.  Conclusions 

The  system  put  in  place  by  Annex  XII  of  the  Staff  Regulations  has  ensured  the  correct 
implementation of the rules by keeping the PSEO in actuarial balance, providing stability for 
staff and ensuring a continuous progressive pension contributions flow into the EU budget. 

While PSEO has not reached maturity  yet, both the 2004 and the 2014 reforms of the Staff 
Regulations  are  already  generating  significant  savings  on  the  current  pension  expenditures. 
Key indicators such as the average level of pension rights acquired as well as average basic 
salaries, confirm that the structural changes introduced by the 2004 and 2014 reforms of the 
Staff Regulations will progressively generate increasing savings and thus considerably slow-
down the evolution of the impact of PSEO on the EU budget. 

Compared to the pension systems applicable to the civil servants of the Member States, the 
PSEO remains at the forefront in most of the key indicators such as pensionable age, level of 
pension contributions, adjustment to the evolution of actuarial parameters. At the same time, 
the effects of the 2004 and 2014 reforms of the Staff Regulations on PSEO pose a challenge 
to the attractiveness of the EU public service.  

In  view  of  the  assessment  of  the  actuarial  balance  and  the  budgetary  implications  of  the 
PSEO by the present report, the Commission, in line with Article 14(1) of Annex XII to the 
Staff Regulations, does not deem it appropriate at this stage to propose to amend Annex XII 
to the Staff Regulations.  

15 

 
 
 
 
ANNEXES 

Annex 1: Main statutory parameters used in the 2022 actuarial assessment 

Parameter 

Legal source 
Reference date for the population (Annex 
XII Article 1) 
Maximum retirement age (Staff 
Regulations Article 52) 

Normal retirement age (Staff Regulations 
Article 52 and Annex XIII Article 22) 
Minimum retirement age (Staff 
Regulations Article 52(b), Annex VIII 
Article 9 and Annex XIII Article 23) 
Category and grade for the minimum 
subsistence figure (Annex VIII Article 6) 
Maximum retirement pension (Staff 
Regulations Article 77) 
Annual accrual rate (Article 77 of the 
Staff Regulations and Article 21 of 
Annex XIII) 

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

Penalty for early retirement (Annex VIII, 
Article 9 and Annex XIII, Article 22, 
point 3) 
Minimum retirement pension (Staff 
Regulations Article 77) 
Invalidity allowance (Staff Regulations 
Article 78) 
Minimum invalidity allowance (Staff 
Regulations Article 78) 
Reversion pension (Staff Regulations 
Article 79 and Annex VIII Article 18) 
Minimum reversionary pension (Staff 
Regulations Article 79 and Annex VIII 
Article 18) 
Survivor's pension (Staff Regulations 
Article 79 and Annex VIII Article 17) 
Minimum survivor's pension (Staff 
Regulations Article 79) 

Value 
Staff Regulations in force from 01.01.2014 
31.12.2021 

65 (automatically officials in service before 
01.01.2014), 66 (automatically new officials) or 
67 (at staff' request) or until 70 (exceptionally) 
60 to 66 depending on years of service, age and 
entry date in service 

58 

Grade AST 1 Step 1 

70% of the basic salary at the retirement date 

1.8% (officials in service from 01.01.2014)  
1.9% (officials in service from 01.05.2004), or 
2% (officials in service before 01.05.2004), of 
basic salary 
1.5% (new officials) or 2.5% of the basic salary, 
or 5% of the amount of pension rights acquired at 
60, depending on the entry date in service, the 
years of service at 1st May 2004 and the age of 
the official on 1st May 2004  
3.5% (new officials) or 1.75% (former officials) 
of the pension, for every year before the normal 
retirement age 
4% of the minimum subsistence figure per year 
of service 
70% of the basic salary 

100% of the minimum subsistence figure 

60% of the retirement pension 

35% of the last basic salary 

60% of the retirement pension that would have 
been payable to the official 
35% of the last basic salary or minimum 
subsistence figure 

16 

 
 
 
 
 
Annex 2: Extract from the EU Life Tables  

Men 

Women 

Age   

Probability 
to die at 
age x 

Life 
expectancy 

Probability 
to die at 
age x 

Life 
expectancy 

40 
45 
50 
55 
60 
65 
70 
75 
80 
85 
90 

0,00048544 

0,00083219 

0,00140284 

0,00236193 

0,00398328 

0,00643074 

0,01187197 

0,02186383 

0,04016587 

0,07362888 

0,12980921 

44 

39 

34 

30 

25 

21 

16 

13 

9 

6 

4 

0,00037417 

0,00064198 

0,00110248 

0,00189106 

0,00324918 

0,00558535 

0,00864211 

0,01470951 

0,02826935 

0,05429701 

0,10494797 

46 

42 

37 

32 

27 

23 

19 

14 

11 

8 

5 

Annex 3: Demographic assumptions for the 2022 actuarial assessment 

Demographic assumptions 
Life Table (healthy members) 

2022 assessment 
2018 EULT 

Life Table (disabled 
members) 

Invalidity Table 

Current Marital Status 

Probability of being married 
at retirement age, for men 

Probability of being married 
at retirement age, for women 

Average age difference 
between an official and 
his/her partner 

2018 EULT + 3 years 

2018 EU Invalidity 
Table 
Marital Status at 
evaluation date 

82,0% 

52,0% 

1 year 

Assumed Retirement Age 
Turnover 

63 to 66  
2018 Turnover 

Loading Coefficient for 
orphan's and divorced 
spouse's pension 

9,6% 

17 

 
 
 
 
 
 
 
 
 
 
 
Annex 4: Financial assumptions for the 2022 actuarial assessment 

Financial assumptions 

Salary Grid 

Duration 
Nominal Discount Rate (NDR) 
Inflation Rate (IR) 
Real Discount Rate (RDR) 
General Salary Growth (GSG) 

General Pension Revaluation 
(GPR)  

Individual Salary Progression 
(ISP) 

Correction Coefficients      (art. 
3.5 of Annex XI & art. 20 of 
Annex XIII)  

2022 assessment 
In force from 
01.07.2021 
23 years 
4,6% 
1,8% 
2,7% 
-0,1% 

-0,1% 

2018 ISP Table 

0,0% 

R
C
P

11,0%
10,8%
10,6%
10,4%
10,2%
10,0%
9,8%
9,6%
9,4%
9,2%

R
C
P

11,0%

10,8%

10,6%

10,4%

10,2%

10,0%

9,8%

9,6%

9,4%

9,2%

PCR over real discount rate scenarios
10,8%

10,6%

10,3%

10,1%

9,8%

2,50%

2,6%

2,7%

RDR

2,8%

2,9%

PCR over general salary growth scenarios

10,8%

10,6%

10,3%

10,1%

9,8%

-0,30%

-0,2%

-0,1%

GSG

0,0%

0,1%

18 

 
 
 
 
 
Annex 5: Pension contribution by year between 2014 and 2022 

Service cost for retirement 
/Basic salaries 
Service cost for invalidity / 
Basic salaries  
Service cost for death / 
Basic salaries 
Service Cost / Basic 
salaries 
Calculated PCR (staff 
share) 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

2021 

2022 

28,3%  28,2%  27,2%  27,1%  27,4%  26,9%  27,8%  27,5%  28,6% 

1,2% 

1,3% 

1,3% 

1,3% 

1,6% 

1,7% 

1,7% 

1,7% 

1,7% 

0,9% 

0,9% 

0,9% 

0,9% 

0,9% 

0,6% 

0,6% 

0,6% 

0,6% 

30,4%  30,5%  29,5%  29,3%  30,0%  29,2%  30,2%  29,8%  30,9% 

10,1%  10,2% 

9,8% 

9,8% 

10,0% 

9,7% 

10,1% 

9,9% 

10,3% 

Applied PCR (staff share) 

10,1%  10,1% 

9,8% 

9,8% 

10,0% 

9,7% 

10,1%  10,1%  10,1% 

Calculated vs applied PCR

11,0%

10,5%

10,0%

9,5%

9,0%

2014

2015

2016

2017

2018

2019

2020

2021

2022

Calculated PCR

Applied PCR

Annex 6: Evolution of active staff at the EU Institutions 

Active population  
Parliament 
Council 
Commission 
CJEU 
ECA 
EESC 
CoR 
Ombudsman 
EDPS 
EEAS 
Other institutions  
and decentralised agencies  9.088 
Total 

2020 

2017 

2016 

2019 

2021  Change 
2015 
2018 
2014 
14,1% 
9.464  9.872  9.959  10.305  9.895  9.987  10.357 
9.074 
8,7% 
3.026  3.162  3.162  3.111  3.160  3.206  3.246 
2.985 
0,0% 
31.015  31.359  30.889  30.448  30.765  31.248  31.115  31.005 
9,9% 
2.244  2.273  2.311  2.293  2.327  2.303  2.309 
2.101 
5,3% 
950 
943 
902 
-1,9% 
727 
737 
741 
5,9% 
574 
560 
542 
1,4% 
74 
78 
73 
128  120,7% 
58 
96 
17,0% 
1.988 

1.983  2.035  2.016  2.095  2.149  2.234  2.326 

931 
739 
558 
73 
62 

938 
738 
552 
82 
72 

943 
737 
569 
75 
96 

945 
730 
560 
73 
114 

934 
739 
548 
76 
63 

58,7% 
9.595  10.337  11.007  11.646  12.272  13.093  14.424 
58.567  60.034  60.928  61.285  62.629  63.471  64.360  66.120  12,9% 

19 

 
 
  
 
 
 
Annex 7: Active population of PSEO by cohorts of accrual  

Accrual 
Rate 
1,8% 
1,9% 
2,0% 
Totals 

2013 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

2021 

0 
36.985 
20.989 
57.974 

6.438 
32.226 
19.903 
58.567 

11.280 
29.827 
18.928 
60.034 

14.972 
27.978 
17.978 
60.928 

18.250 
25.998 
17.037 
61.285 

21.618 
24.896 
16.115 
62.629 

25.280 
23.217 
14.974 
63.471 

27.815 
22.576 
13.969 
64.360 

31.671 
21.653 
12.796 
66.120 

PSEO actives by accrual rate

s
e
v
i
t
c
a
f
o
%

100%

80%

60%

40%

20%

0%

2014

2015

2016

2017

2018

Year

2019

2020

2021

2022

1.8%

1.9%

2.0%

Annex 8: Number of pensionable years performed by various cohorts of active staff 

Accrual 
Rate 

1,8% 
1,9% 
2,0% 
Total 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

2021 

2022 

19.476 

39.805 

0 
107.914  139.360  161.680  198.108 
81.336 
209.337  221.645  238.790  253.246  300.615  320.554  326.371  343.688  354.837 
464.097  453.572  440.828  436.240  433.162  424.344  403.373  387.626  365.418 
673.435  694.693  719.423  746.564  815.113  852.812  869.105  892.995  918.363 

57.077 

Annex 9: Share of pensionable years performed by various cohorts of active staff 

Accrual 
Rate 

1,8% 

1,9% 

2,0% 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

2021 

2022 

0,00%  2,8% 

5,5% 

7,7% 

10,0%  12,7%  16,0%  18,1%  21,6% 

31,1%  31,9%  33,2%  34,0%  36,9%  37,6%  37,6%  38,5%  38,6% 

68,9%  65,3%  61,3%  58,4%  53,1%  49,8%  46,4%  43,4%  39,8% 

20 

 
 
 
 
 
 
 
 
 
Pensionable Years by accrual rate 

)

%

(
R
A
y
b
s
r
a
e
Y
s
n
e
P

100%

80%

60%

40%

20%

0%

2014

2015

2016

2017

2018

2019

2020

2021

2022

Years

1,8%

1,9%

2,0%

Annex 10: Number of pensioners per cohort of recruitment (pre-2004, post-2004 and post -
2014) 

Date of 
recruitment 

Number of 
pensioners  

Share of 
pensioners 

Until 
30.04.2004 
As from 
01.05.2004 
As from 
01.01.2014 

18 291 

89.6% 

1.883 

236 

9.2% 

1.2% 

Old-Age Pensioners at 31/12/2021

100

90

80

70

60

50

40

30

20

10

0

2%

1,90%

Accrual rate

1,80%

21 

 
 
 
 
 
 
 
 
 
 
Annex 11: Proceeds from staff members’ pension contributions  

Year 

2014 
2015 
2016 
2017 
2018 
2019 
2020 
2021 
2022 
Total  

Proceeds from staff 
members’ pension 
contributions  
(in million EUR) 
348.7 
425.6 
441.8 
449.2 
473.6 
485.7 
504.4 
535.2 
553.4 
4217.6 

Annex 12: Contributions from transfers-in of pension rights 

Year 

Contributions from 
transfers-in of pension rights 
(in million EUR) 
109.4 
108.6 
139.5 
127.6 
107.3 
89.1 
82.3 
89.8 
95.5 
949.1 

2014 
2015 
2016 
2017 
2018 
2019 
2020 
2021 
2022 
Total  
Annex 13: Contributions by decentralised agencies and international organisations 

Year 

2014 
2015 
2016 
2017 
2018 
2019 
2020 
2021 
2022 
Total  

Contributions by 
decentralised agencies and 
international organisations 
(in million EUR) 
 17.6  
 22.5  
 40.3  
 42.4  
 52.6  
 50.6 
 52.1  
 56.4 
 58.2 
392.7 

22 

 
 
 
 
Annex 14: Total pension expenditure  

Year 

2014 
2015 
2016 
2017 
2018 
2019 
2020 
2021 
2022 
Average 
increase 

Pension expenditure  
(in million EUR) 
1.485.1 
1.541.2 
1.660.5 
1.774.5 
1.854.6 
1.964.5 
2.064.4 
2.173.2 
2.398.1 

+6.2% 

Annex 15: Pension expenditure resulting from pension correction coefficients 

Year 

2014 
2015 
2016 
2017 
2018 
2019 
2020 
2021 
2022 
Total  

Part of the pension 
expenditure corresponding to 
correction coefficients  
(in million EUR) 
39.3 
37.8 
42.5 
45.4 
47.2 
48.4 
50.7 
56.6 
57.6 
425.7 

Annex 16: Pension liability with the actuarial assumptions of the pension assessment at 31 
December 2021 

PCR 
assumption 

PSEO Liability  
(in million EUR) 

Impact  
(in million 
EUR) 

Impact 

Liability 
actuarial 
assumptions 

Assessment 
actuarial 
assumptions 

126 068 

62 613 

-63 455 

-50.3% 

23 

 
 
 
 
  
  
 
Annex 17: Update of the pension contribution rate in EU Member States37 

Conditions under which pension contribution 
rates are updated 

Member States  

Regular updates based on actuarial calculations 

NL, EU 

Occasional updates based on actuarial 
calculations 

AT, BE, HU, LU, PT, SI 

Regular updates based on political decisions 

FI, PL 

Occasional updates based on political decisions 

BG, FR, HR, IE, LT, LV, MT, RO, SE 

No updates 

CY, CZ, DE, ES, EE, DK, IT, SK 

Annex 18: Pension contribution rates applicable in Member States in 202138  

Pension contribution rate - 2021

16

14

12

10

8

6

4

2

0

BG DE DK SE EE ES CY CZ EL BE LU NL PL

IE

FI

LT IT HU FR MT EU AT PT HR LV RO SI

37  
38  

The data in this table are provided by Member States’ representatives in the Article 83 Working Group. 
The tables of Annex 18 refers to data submitted by Member States in the form of country fiches for the 
2021 Commission report on the ageing population (The 2021 Ageing Report: Economic and Budgetary 
Projections for the EU Member States (2019-2070) prepared by DG ECFIN). In addition, every year, 
the EU Member States provide Eurostat with data on their respective pension contribution rate: as those 
data are collected in ranges of values, the table reports the median value of the range where necessary. 

24 

 
 
 
 
 
 
                                                           
Annex 19: Normal pensionable age applicable to public servants in 202139 

Normal pensionable age - 2021

68

66

64

62

60

58

56

54

CZ HR LU PL BG MT EL

FR LV SI

EE

FI AT BE CY

ES

SE DE

IE NL PT EU IT

Annex 20: Update of the pensionable age in light of life expectancy40 

Link between the pensionable age and   life 
expectancy 

Member States 

No link 

AT, BG, DE, EE, ES, HU, LU, RO, SE 

Weak link: occasional updates 

BE, CZ, FR, HR, IE, LT, LV, MT, PL, SI 

Strong link: Regular update 

CY, DK, EL, FI, IT, NL, PT, SK, EU 

Annex 21: Evolution of the average pension rights accrued by pensioners  

65%

64%

63%

62%

61%

4
0
-
1
0
-
1
0

5
0
-
1
0
-
1
0

6
0
-
1
0
-
1
0

7
0
-
1
0
-
1
0

8
0
-
1
0
-
1
0

9
0
-
1
0
-
1
0

0
1
-
1
0
-
1
0

1
1
-
1
0
-
1
0

2
1
-
1
0
-
1
0

3
1
-
1
0
-
1
0

4
1
-
1
0
-
1
0

5
1
-
1
0
-
1
0

6
1
-
1
0
-
1
0

7
1
-
1
0
-
1
0

8
1
-
1
0
-
1
0

9
1
-
1
0
-
1
0

0
2
-
1
0
-
1
0

1
2
-
1
0
-
1
0

2
2
-
1
0
-
1
0

39  
40  

The data in this table are provided by Member States’ representatives in the Article 83 Working Group.  
The data in this table are provided by Member States’ representatives in the Article 83 Working Group.  

25 

 
 
 
 
 
 
                                                           
Annex 22: Savings on the pension expenditure resulting from the measures of the 2014 
measures affecting the salary grid  

Year 

2011 
2012 
2013 
2014 
2015 
2016 
2017 
2018 
2019 
2020 
2021 
2022 
Total 

Savings resulting from the 
measures of the 2014 reform 
of the Staff Regulations 
affecting the salary grid 
(million) 
24.9  
34.2  
59.6  
95.1  
116.6  
129.2  
141.4  
150.1  
162.0 
172.5  
184.0  
214.7  
1.484.4 

26