European Parliament scales back luxury MEP pension fund

"So if somebody was going to get €4000 (per month) they get €2,000," said one EU official.

"There was a very clear majority for this," he said, speaking of the Bureau.

The political decision still needs to go through the formal procedural steps before the payments are cut amid speculation some beneficiaries may now take legal action against European Parliament.

First set up in 1990, and open to MEPs until 2009, the voluntary pension fund was bleeding large amounts of cash from the parliament's budget given, in part, a sharp increase in the number of people reaching an early retirement age.

MEPs at the time used their monthly office allowance expenses to pay into a so-called voluntary pension fund. Up until the cutoff point, for every €1,000 paid into the scheme, the EU parliament contributed €2,000.

They were then guaranteed a pension after having only paid two years into a Luxembourg-based fund, which invested in everything from mining , arms, and big tobacco industries and held assets in tax havens.

But Monday's decision also follows intense pressure given a possible tax payer bailout of a scheme, that is over €300m in debt.

Its assets totalled only €55m as of the end of 2022, while its future pension payment obligations hovered around €363m. It means the fund is set to run out of money by 2025 at the latest, requiring a possible bailout.

The EU official said the Bureau's decision also means that the deficit will now be reduced to €86m.

They are also demanding beneficiaries of the scheme to leave the fund voluntarily with a one-off payment. "They would basically get the one-third share that they have put in themselves," he said.

As an incentive to leave, the parliament would offer them 20 percent on top of their one-third share, he said.

Around 20 current MEPs are members of the fund. Others have already left, including Margaritis Schinas, who is now European Commission vice-president in charge of "Promoting our European Way of Life".

The scheme had 964 current and future pensioners in 2021, including Brexit architect Nigel Farage, French-far right politician Marine Le Pen, as well as the EU's current foreign policy chief, Josep Borrell.

"The Bureau will come back to this before the end of 2024 in order to do a new assessment of where we stand," said the official.