The European Parliament does not have to guarantee a special pension fund from which former parliamentarians receive a supplementary pension, says MEP Lara Wolters (PvdA). The funding quota of this fund, which was closed in 2009, is very low, but so far Parliament has always said that it should compensate for differences. A study by the University of Utrecht now shows that there is no legal basis for this, says Wolters.
The parliamentary pension fund has been on the brink of collapse for years. The fund has major deficits: in 2018 it was 270 million euros, in the following year 326 million euros. According to the latest calculations, there will be no more money in the cash register in 2024. Participation was always voluntary, new members of parliament can no longer use it.
Not a pension fund, but an investment fund
Since 2009 MPs can no longer become members of the fund. At that time, the rules already raised doubts about the fund’s financial stability: even if there was nothing left in cash, MEPs who had invested money in the past could still receive an advantage.
“In fact, as in the Netherlands, it is not a real pension fund, but an investment fund,” says PvdA employee Wolters. “And this Luxembourg investment fund can never legally guarantee a certain return.”
With a pension fund, a positive return is required, otherwise the European taxpayer will have to make up the difference. In the Netherlands, a coverage ratio below 100 percent is worrying; a few years ago the European fund’s coverage ratio was around 37 percent.
End retirement pension
Today a committee of the European Parliament is discussing the matter. It will be brought up again next week when the budget is approved.
In the past, Dutch parliamentarians have also tried to end pension benefits. The board promised to hold individual interviews with members, but that never happened.
Former MEP Gerben-Jan Gerbrandy (D66) called the number “a corpse in the closet” years ago. “And every year when we open the closet, we look at the same body.”
According to Lara Wolters, MPs can now do short work with the fund with this new study.