28th May 2023

European Parliament scales back luxury MEP pension fund

  • Over 900 MEPs had signed up to the luxury pension scheme, including Brexit architect Nigel Farage (Photo: Unsplash)
Listen to article

The European Parliament's leadership has decided to scale back a heavily-indebted MEP luxury pension scheme.

The parliament's Bureau, a political body composed of the president and its vice-presidents, on Monday (22 May) decided to slash payouts from the fund by 50 percent, freeze automatic indexations, and increase the pension age from 65 to 67.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"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.


MEP luxury pension held corporate assets in tax havens

While the European Parliament was demanding a clamp down on tax havens, many of its own MEPs were using their monthly office allowances to finance a luxury pension scheme that held corporate assets in the Cayman Islands, Bermuda and elsewhere.


MEP pension fund invested in cluster munition arms industry

The European Parliament's voluntary pension scheme held 14,900 shares in Raytheon in 2008 with a market value of $547,000, despite being blacklisted by Norway's sovereign wealth in 2005 for producing and selling cluster munitions.


Borrell gets pension from MEP fund set for taxpayer bailout

Josep Borrell, the EU's foreign policy chief, is currently drawing a pension from a European Parliament fund that is some €400m in debt and may require a taxpayer bailout at a time of rising inflation and high energy costs.

MEPs to urge block on Hungary taking EU presidency in 2024

"This will be the first time a member state that is under the Article 7 procedure will take over the rotating presidency of the council," French Green MEP Gwendoline Delbos-Corfield, the key lawmaker on Hungary, warned.

WhoisWho? Calls mount to bring back EU directory

NGOs and lobbyists slammed the EU commission for removing contact details of non-managerial staff from its public register, arguing that the institution is now less transparent.


What a Spanish novelist can teach us about communality

In a world where cultural clashes and sectarianism seems to be on the increase, Spanish novelist Javier Cercas (b.1962) takes the opposite approach. He cherishes both life in the big city and in the countryside.


Poland and Hungary's ugly divorce over Ukraine

What started in 2015 as a 'friends-with-benefits' relationship between Viktor Orbán and Jarosław Kaczyński, for Hungary and Poland, is ending in disgust and enmity — which will not be overcome until both leaders leave.

Latest News

  1. How the EU's money for waste went to waste in Lebanon
  2. EU criminal complicity in Libya needs recognition, says expert
  3. Europe's missing mails
  4. MEPs to urge block on Hungary taking EU presidency in 2024
  5. PFAS 'forever chemicals' cost society €16 trillion a year
  6. EU will 'react as appropriate' to Russian nukes in Belarus
  7. The EU needs to foster tech — not just regulate it
  8. EU: national energy price-spike measures should end this year

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Join EUobserver

Support quality EU news

Join us