EUROPE - The Bureau of the European Parliament has confirmed three measures to shore up the struggling additional voluntary pension scheme for MEPs, following mounting concerns the bill could be passed on to taxpayers.
It said the fund's liquidity would be maintained and taxpayers would not be asked to cover the fund's actuarial deficit.
Brussels sources confirmed to Global Pensions the actuarial deficit measured at 31 December 2008 allowed the fund could afford to pay pensions only until 2023, as opposed to the previous actuarial valuation dated 20 June 2007, which said pension payments could be made until 2053.
In addition, sources said assets under management declined from €202m at the end of 2006 to €160m at the end of €2008.
With this decision, the Bureau confirmed its position not to make provisions for covering any losses.
However, it said the European Parliament had a legal obligation to guarantee the pension rights of the current members of the fund and it therefore took the above-mentioned measures to improve the fund's liquidity.
It also said, with these measures taken, it hoped the fund would be able to continue to honor pension payments for as long as it was necessary, taking into account the fund would be phased out with the application of the single Statute for Members in July 2009 and therefore no future commitments would accrue.
The chairman of the additional voluntary pension scheme Richard Balfe was not immediately available for comment.
Last week, the EP Budgetary Committee voted against a bailout of the voluntary scheme (www.globalpensions.com: 17/04/09).
In a statement, the Committee said it voted the EP should "under no circumstances provide extra money out of the budget to cover the fund's deficit".
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
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