Pensioenfonds Europees Parlement in het brandpunt van de belangstelling (en)
EUOBSERVER / BRUSSELS - Pressure is increasing to overhaul a private-sector pension fund for MEPs under which citizens foot the bill for poor investments, as parliament's 2008 budget discharge procedure enters the final stages.
A decision last April by the legislature's bureau, the body made up of parliament's president and vice-presidents, indicated the EU institution would assume its "legal responsibilities" to ensure members received their full pension entitlements by stepping in to pick up the tab when investments did poorly.
A report by Green MEP Bart Staes has recently drawn attention to the fund's 2008 deficit of €121 million - the difference between the fund's asset values and future pay-outs - with all eyes now on the 2009 figures.
Although the deficit jumped from €30 million to €121 million over the course of 2008, Mr Staes rejects the claim that the fund's history of poor investments is merely linked to the financial crisis, and is amongst those calling for change.
"In the 10 years that i've been on this file, I never saw a diminishing of the actuarial deficit," he told EUobserver.
Started in 1989, the voluntary scheme, which comes atop the pensions MEPs receive from their national governments, has attracted criticisms on a number of accounts, not least the bureau's decision to bail out the fund twice in the past with extra money in deficit years.
The pension's generous terms mean that for every one euro contributed by fund members, a further two come from the parliament's budget, a situation that Mr Staes decribes as "strange."
Another is the fact the private fund has its office inside the parliament building, with lighting and phone bills all paid for out of the legislature's administration budget.
Image clean-up
In a bid to lessen the ongoing controversy, 2009 reforms closed the fund to new members, although existing re-elected members can continue to contribute for another five years.
Other changes include raising the age at which MEPs can benefit from the scheme from 60 to 63 years, although a group of roughly 60 MEPs is currently engaged in a legal battle in the European Court of Justice to fight these measures.
Anger and suspicions of mismanagement will lead a number of parliamentary officials to suggest this month that parliament take over the running of the Luxembourg-based fund, a source told this website. A rise in the deficit for 2009 would provide these individuals with further ammunition.
A parliamentary official, with close contacts to the fund, said the deficit was set to fall in 2009 however, although they refused to say by how much. The source also strongly denied accusations of overly-risky investments, including in the Ponzi scheme run by Bernard Madoff that lost $50 billion of investors' money when it was exposed last year.
"That's completely and utterly incorrect ...As a fund, we have never invested in Lehman Brothers, Madoff, hedge funds or any other highly speculative investments," the contact said.
The official, who wished to remain anonymous, added that parliament was doing the correct thing by honoring its agreement to ensure members received their full pensions, despite decreases in investment values, and defended the decision to keep members' name secret.
"There are people in the scheme who have retired on ill-health grounds or are the survivors of deceased members - I don't think that this sort of personnel and private information should be made public," the source said.