But how can it be financed?

MB – 05/2023

The pension scheme for Members of the European Parliament (MEPs) is under criticism and the issue at stake is an entitlement to a supplementary pension from the pension fund. The problem: the fund is on the brink of bankruptcy.

Reforms everywhere - only the European Parliament is static

While everywhere in the EU the course for longer working lives is being discussed and implemented - we think of the current situation in France - the European Parliament (EP) and its members are not affected. Since 2009, there has been a uniform EU pension system for MEPs, and to date, the retirement age is 63 years of age. The costs of their pensions are paid from the EP's budget and thus, by European taxpayers.

The supplementary pension scheme is on the brink of bankruptcy

Before 2009, this did not exist and MEPs rather received a pension according to the regulations governing their states of origin. In 1989/1990, the EP had therefore established a voluntary pension fund because not all members had a pension entitlement through the national parliaments. MEPs were able to acquire old-age and survivors' pension rights through their own contributions and subsidies from the EP. The pension fund was closed in 2009 following a reform of the Statute for Members of the European Parliament. For those who were already members of the fund in 2009, it remained open unless they opted for the new system.

The pension fund is on the brink of bankruptcy: as early as summer 2018, the German media reported about the imminent bankruptcy of the fund in 2024. According to current reports, insolvency is imminent in the coming years because current and future obligations exceed the existing fund capital many times over.

The reason for this is, on the one hand, the difficult situation on the capital market and wrong decisions in the past. But the MEPs themselves have also contributed to this: Raising the retirement age from 63 to 65 did not gain majority support in 2018. In the current discussion, which EP President Roberta Metsola (EPP/ ML) wants to hold in the Steering Committee in the near future, other solutions are being sought. The options now being discussed are probably insolvency (cessation of payments to beneficiaries), liquidation of the fund (payment of the remaining funds to the fund members) or a transfer of the fund or, better, of the liabilities to the EU budget.

German MEPs only slightly affected

Currently, there are probably only a few former German MEPs with vested rights in the fund. All incumbent German MEPs are in the new pension system and thus, unaffected by a bankruptcy. Unlike Members of the German Parliament (Bundestag), for whom the retirement age is gradually being raised from 65 to 67, the age limit of 63 continues to apply to MEPs.