EUROPE - Up to 65 members of the European Parliament (MEPs) are set to take legal action to block the reforms on the Additional Voluntary Pension Scheme for MEPs recently adopted by the European Parliament (EP) Bureau.
In particular, it decided the age at which MEPs benefit from the pension would be raised to 63 from 60, to suspend contribution from existing members and to eliminate lump sum pension payments.
UK Liberal Democrat MEP Chris Davies, who is a member of the scheme and who is opposing the legal action, told GP: "I think it would inappropriate for parliamentarians to challenge these reforms. The alternative would be a bailout of the scheme, which would ultimately mean seeking assistance from the taxpayer."
The latest available figures placed the actuarial deficit at €30.92m (US$40.35m) at the end of 2007, but it is understood the deficit has increased since then. Recent media reports have placed the figure at closer to €100m.
Davies added the legal action would be taken on an individual basis by the MEPs, but it was being organised collectively by the pension fund trustees.
The voluntary scheme - which is one-third funded by the members and two-thirds by the taxpayer - has always been considered a controversial perk, especially in the UK.
Open Europe analyst Sarah Gaskell said: "This pension scheme has already been shown to be an unacceptable waste of taxpayers' money and now some MEPs are trying to protect their golden payouts through a legal challenge shrouded in secrecy.
"This is further evidence that the scheme should be completely shut down immediately, rather than subject to secretive challenges."
Last April, the EP Budgetary Committee voted against a bailout of the troubled pension scheme. (Global Pensions; 17/04/09)
In a statement published at the time, the Committee said it voted the EP should "under no circumstances provide extra money out of the budget to cover the fund's deficit".
Former conservative MEP and chairman of the fund Richard Balfe has not returned emails and phone calls for comment.
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