Did the European Commission officially mention that pensions should obey some sort of contribution-related principle?

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Jul 18, 2021 07:07 AM 0 Answers
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Context

I have watched an interview with a financial expert arguing about the big impact of so-called "special pensions" in Romania (1-2% of GDP). This is confirmed by some politicians that argued about pensions that might be bigger than the salary.

The same person argued that the European Commission considers "special" pensions the ones not obeying some sort of contribution-related principle (i.e. there is a proportionality between contributions to the pension fund during the active professional life and the pension amount). As a consequence having "special" pensions is something that should be avoided.

Research

I have tried finding an official text related to those above and found this article, but I am not sure the "special" pensions topic is touched in any way. What seems to be related to the contribution related principle:

The PSEO follows the actuarial balance principle. The annual
contribution paid by the staff has to cover one third of the rights
that the staff have acquired during a given year. The acquired rights
of EU civil servants during that given year correspond to the future
pensions that the staff will receive after retirement, as well as to
the entitlement (under certain conditions) to an invalidity allowance,
a survivor's pension, and an orphan's pension. In other words, the
annual contribution is designed to finance one third of the service
cost under the pension scheme, i.e. a series of payments that will
arise in the future. In order to make this computation possible, the
series of payments for European civil servants has to be evaluated at
its present value (using an interest rate "discount rate"). The
computation is thus an actuarial valuation.

Question: Did the European Commission officially mention that pensions should obey some sort of contribution-related principle?

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  • July 18, 2021