A generous second pension scheme enjoyed by Members of the European Parliament is likely to be bailed out by the taxpayer after falling stock markets left it with a deficit of €120 million (£105 million).
Proving that the gravy train does not stop for MEPs when they leave Brussels, the European Parliament has guaranteed their full entitlements under the scheme — which for someone with ten years’ service pays out nearly £30,000 a year on top of their first pension of £15,000.
Critics are furious at a decision to underwrite the controversial second pension, for which the taxpayer already contributes €2 for every €1 paid by an MEP.
The scheme was already in disrepute because MEPs’ contributions are taken automatically from their office expense allowance of €4,202 (£3,700) a month rather than their salary. MEPs are supposed to reimburse this account but there are no checks and it is accepted widely that many do not repay the money, potentially making the pension an entirely taxpayer-funded perk.
Senior MEPs are proposing several changes to the second pension to reduce the deficit, such as increasing the retirement age from 60 to 63 and stopping early retirement at 50. But these are likely to be blocked after the fund chairman, the Conservative former MEP Richard Balfe — who now acts as David Cameron’s envoy to the trade unions — warned that such moves were “not permissible under European law”, in effect leaving the taxpayer with the entire bill.
The row has revived memories of the huge expenses and allowances taken by MEPs, which claimed the jobs of the Conservative leader and chief whip last year.
It comes less than two months before European Parliament elections that are already forecast to have a record-low turnout as a result of widespread apathy towards the Parliament across Europe.
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