European Parliament Implements Cuts to Lavish MEP Pension Fund

Aleksandar Srbinovski
Coins in glass money jar with pension label, financial concept. Vintage wooden background with dramatic light.

Belgium (Brussels Morning Newspaper) The EU Parliament has made the decision to reduce payouts from the heavily indebted ‘luxury’ MEP pension scheme by 50 percent, freeze automatic indexations, and increase the pension age from 65 to 67.

The move comes as a measure to prevent a potential bailout that could cost EU taxpayers millions. Over 900 former members, including ex-pro-Brexit MEPs and current EU commissioners, currently receive substantial monthly payouts from the additional pension fund.

However, the pension scheme, which operated for two decades before closing to new members in 2009, is projected to deplete its funds by early 2025, potentially leaving EU taxpayers with a burden of €310 million.

During a closed-door meeting, senior EU lawmakers in charge of the institution’s finances opted to cut payouts to beneficiaries by half, raise the eligible age, freeze annual inflation-linked increases, and offer beneficiaries a one-time option to leave the scheme.

The decision is expected to extend the fund’s lifespan until the second half of 2027 and reduce the funding deficit to approximately €86 million. The final resolution on whether to allow the scheme to collapse or use taxpayer money for a bailout is postponed until after the 2024 EU elections.

The Bureau rejected a less extensive option that would have only reduced payouts and frozen indexation. Potential legal action by beneficiaries has influenced the decision-making process of the Parliament. While the chosen solution carries a moderate level of legal risk, it aims to minimize negative consequences for European taxpayers.

The fate of the pension scheme may ultimately be tested in the courts, and some MEPs argue that winding it up entirely should be considered. Measures implemented now are seen as temporary solutions that will prolong the fund’s existence for a few more years.

The chosen course of action has prompted mixed reactions from MEPs, with some stating that the fund should have been closed earlier and calling for commissioners to voluntarily withdraw from the scheme. The decision-making process involved discussions and analysis of legal implications, aiming to strike a balance between reducing the deficit and protecting European taxpayers.

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Aleksandar Srbinovski is a journalist with over fifteen years of experience working in print and online media. He has worked for The National Interest, Sloboden Pecat, Nova Makedonija, Newsweek, Europa, Blic, Politika, ABC News, Vecher, TV Sitel, and Skok. He holds a BA in journalism from the Saints Cyril and Methodius University of Skopje and has pursued continued training with the University of Oklahoma. Aleksandar has been covering the developments in the Balkans, Eastern Europe, and South Caucasus, and writing articles for international media outlets.