2018 Eurostat Annual Report overview - A65 elements Ag.14 / 16.1 Doc.A6465/19/05b 2018 Eurostat Annual Report overview - A65 elements Working Group on Articles 64 & 65 of the Staff Regulations Meeting in Luxembourg 26 & 27 March 2019

Content of this presentation Reminder of timeline and report structure Reminder who is affected by Annual Adjustment Overview of A65 elements: GSI for sample Components of changes in nominal net salary Comparative and analytical data Do "moderation" and "exception" clauses apply? Closer examination of the figures Annex 2 report Link to other presentations

Similar production timeline to previous A year-long exercise! Legal requirements respected 1st Extra-EU report via Ares 24.4.18 (Aug-Jan) Interim report via Ares 3.5.18 (@ 1.January) 2nd Extra-EU report via Ares 10.10.18 (Feb-Jun) Annual report via Ares 31.10.18 (@ 1.July) Annex 2 report onto website 16.1.19 3

Only just achieved for 2018? Extra #1 = 2 wks late 24.04.18 (PY 12.04.17) Interim = 3 wks late 03.05.18 (PY 18.04.17) Extra #2 = 3 wks late 10.10.18 (PY 22.09.17) Annual = 1 wks late 31.10.18 (PY 24.10.17) Analytic = 5 wks late 16.01.19 (PY 06.12.17) Annex 2 = 5 wks late 16.01.19 (PY 06.12.17) Reason: 50% staff cut (delayed recruit/non-replacement) Competing (increased) workload

Subsequent steps also similar timeline Since 2013 reform, automatic adoption procedure: Interim report: as part of CC adjustment, only if % change exceeds threshold Annual report: applies (subject to moderation/exception) Eurostat calculation, followed by: DGHR budget impact report internal administrative processes Council WPSR for information Communication in Official Journal pay slips INTERIM ANNUAL April/May November [May] [June] December June (retro) December (retro) 5

Report structure and content 6

Intermediate Reports Extra-EU #1 (ref. Aug-Jan) Interim (ref. January) To DGHR 24.4.18 [social dialogue + administrative consultation] Interim (ref. January) To DGHR 3.5.18 Extra-EU #2 (ref. Feb-Jun) To DGHR 10.10.18

Intra-EU intermediate report structure and content 2018 = 5th Intra-EU interim report under Staff Regulations as amended October 2013 Similar transparent content as last year's report, some new tables MAIN TEXT 6 pages 0 tables Annex 1 - SI 5 pages 4 tables Annex 2 - JBLI 3 pages 6 tables Annex 3 - CC 9 pages 5 tables Annex 4 - CC+SI 1 page 24 15 + non sample + PPP change section 8 PY = 24 PY = 13

Extra-EU intermediate reports structure and content 2018 = 9th and 10th Extra-EU interim reports under Staff Regulations as amended October 2013 Similar transparent content as last year's reports, more explanatory text Period Main text Annex Aug-Jan 4 pages 13 pages 13 tables (6 months) Feb-Jun 11 pages 11 tables (5 months) Same structure as PY 9

Did 2018 Intermediate Reports result in CC changes? Duty stations Changes signalled Intra-EU staff 33 (ie.31) - Pensioners 28 (ie.26) Extra-EU (1st) 145 (ie. 144) 4* + 15 Extra-EU (2nd) 5* + 32 PY - 26 45 * CC > 100 Restart WestBank (1st) + South-Sudan (2nd). None stopped. 10

Annual Report structure and content 2018 = Fifth annual report under Staff Regs as amended October 2013 Similar transparency content to last year’s report. New workflow for 7 MS. 2x new table (non- sample). MAIN TEXT 26 pages 10 tables Appendix 1a - SI 34 pages 21 tables Appendix 1b - JBLI 6 pages 4 tables Appendix 1c - CC 53 pages 17 tables 119 pages 52 tables +2 = 2a’ + 2b’ PY = 100 PY = 55

Who/what is affected by the update Basic salary of permanent officials and other servants (all duty stations) Pensions of pensioners (all places of residence) Various values and ceilings, eg. Household allowance; Parental leave allowance; Child allowance; Education allowance Expatriation allowance (minimum); Foreign residence allowance (minimum) Travel allowance Installation allowance Unemployment allowance

Annual update 2018 (for Brussels/Luxembourg) Real GSI % Ann Adj DS % JBLI % 99.6 × 102.1 100 = +1.7% "Implicit index" = total price effect = JBLI x PPP change, but =never a PPP change in Brussels/Luxembourg because reference location

Annual update 2018 (outside Brussels/Luxembourg) = alternative presentation of formula on previous page Ann Adj BXL % PPP change % Ann Adj DS % 101.7 × ???.? 100 = ???.?

Estimate 2018 budgetary impact (DGHR) – A65 element Ch. V Other Ch. Total Expenditure +108.9 mn € +28.5 mn € +137.4 mn € Revenue (tax, etc) +19.0 mn € +4.8 mn € +23.8 mn € Sub-total +127.9 mn € +33.3 mn € +161.2 mn € 15

Any constraints on implementation? Moderation clause (GSI >2%) Exception clause (GDP growth <0%) Was previous year exception clause correct?

Q: Moderation clause applies 2018 ? Calculated SI 1 July Year n 1 April Year n+1 1 -2% ≤ X ≤ +2% 100% - 2 OR ( X < -2% , X > +2% ) (100-a)% a% * a= the proportion of the calculated adjustment using X which exceeds a similar calculation substituting the -2% or +2% ceiling for X 2018 real GSI value is -0.4% ie. situation 1

Q: Exception clause applies 2018 ? Forecast GDP for Year n 1 July Year n 1 April Year n+1 Later* 1 0% ≤ X 100% - 2 -1.0% ≤ X < 0% 33% 67% 3 -3.0% ≤ X < -1.0% 4 X < -3.0% * ie. when cumulative GDP is again positive ECFIN spring forecast +2.3% ie. situation 1 ECFIN autumn forecast not yet published

Q: Exception clause 2017 confirmed ? 2017 Annual Report assessment: situation 1 Staff Regulations requires review against actual 2017 GDP evolution (Eurostat published data) Conclusion: yes, clause was correctly applied

Closer examination of the figures 20

Steps towards the definitive result… Spring forecast (04/18) Actual HICP (09/18) Diff Final report (10/18) [a] [b] [b]-[a] [c] [c]-[a] GSI nominal -0.6 -0.4 +0.2 Inflation +1.9 +2.1 GSI realterms +1.3 +1.5 +1.7 +0.4 21

Components of nominal country SI 2018 MS Gross SI comment Stat. ded. ► Net SI BE 0.0 Last 'spilindex' May 2017 +1.8 Tax thresholds DE +2.8 ▲ 2.9% Mar 2018 (retro) .. ES -1.1 Non repeat 2016 payment +0.1 -1.0 FR +0.8 Sample; PPCU reform Pension, CSG -0.2 IT +3.7 Collective agreement Mar 2018 +3.8 LU +1.1 ▲ 1.5% Jan 2018 -0.1 +1.0 NL +4.6 ▲ 1.4% Jan 2017; ▲ 3.0% Jul 2018 -1.6 Pension +3.0 AT +2.3 ▲ 2.3% Jan 2018 -0.4 +1.9 PL +0.6 Movements in median pay SE +2.6 multiple local agreements 0.1 +2.7 UK +1.2 Sample; 2017 agreements Wgt.avg. = +1.6

Comparative data Indicator Nominal Real 1 Net EU11 +1.6 -0.4 2 Tab. 1 2 Net EU 11 AD +1.5 +0.5 Tab. 1.1 3 Net EU 11 AST 4 Net EU 11 SC +2.2 +0.2 5 Net EU28 +2.5 +0.4 6 Gross EU11 +1.8 -0.3 7 Gross EU11 CI – CoE .. +0.9 Tab. 1.6 8 Gross EU11 CI – LCI +1.7 Tab. 1.7

Estimate of total 2018 impact (AA, PCR, etc) Component Nominal Impact 1 Change to Gross Remuneration (July 2018 Ann.Adj. in Brussels) =GSI+JBLI + 1.7 100% 2 Change to Pension Contribution Rate (July 2018 = 10.0%, July 2017 = 9.8%) -0.2 -0.14 70% 3 Change to Health insurance (= 1.7%) 0.0 4 Change to Accident insurance (= 0.1%) 5 Change to Personal Income Tax (scale) 6 Change to Special Levy (= 6.0%) 50% TOTAL + 1.5 + 1.56

Time series of nominal and real impact (2013=100) Period AA applied PCR change Levy change TOTAL nominal JBLI Real ►2014 - 0.8 @70% - 6.0 @50% - 2.4 + 0.9 - 3.3 ►2015 + 2.4 + 1.2 ►2016 + 3.3 - 0.3 @70% + 3.5 + 1.4 + 2.1 ►2017 + 1.5 + 1.1 + 0.4 ►2018 + 1.7 + 0.2 @70% + 1.6 - 0.5 Cumul. + 9.2 - 0.9 - 6.0 + 6.6 + 6.9 - 0.3

Structure and content of "Annex 2“ report (…from SRQ to CSI) Doc. A6465/19/03 Structure and content of "Annex 2“ report (…from SRQ to CSI) PY published 16.1.2019 on dedicated section [PY 6.12.2017] 2018 = 5th such report under Staff Regs as amended Oct.2013 Similar transparency content to last year’s report Annex 2c (34p) Summary tables with information for EU28 Annex 2a (107p) Detailed tables for 14 countries (BE to LV) Annex 2b (118p) Detailed tables for 14 countries (LT to UK)

Disclaimers – Reminder 1) Aim of MS pay information in Annex 2 report: Compiled under specific conditions Calculation of indicator that measures PAY EVOLUTION of national civil servants… … not the comparison of national PAY LEVELS 2) Article 65 methodology is basis for calculations: Outcome of pay evolution may therefore differ from other calculations at national level. 29

Practical lessons from this exercise 30

Content of this part of presentation Changes to workflow for compiling A65 data Punctuality of transmission; validation process Use of eDAMIS for SRQ transmission Steps and grades Sample coverage + ESA2010 Coverage of categories AD/AST/SC + ratios Overview of lessons and remarks Organisation of 2019 data transmission

New in 2018: changes to workflow Approved at WG 2018 meeting, immediately applied 7 countries concerned: BE, DE, ES, FR, IT, LU, NL Main reason: both ISRP and ESTAT need identical data for these countries Big advantages: - lower response burden for the country - more rapid validation Effective, efficient and economic

Deadlines for transmission: Group 1: 7 countries  deadline 31.05.2018 Group 2: other 21 countries (including sample country UK)  deadline 31.07.2018 (= no change) Remark: SRQ same for both data collections

Punctual transmission – Group 1 31st May target date achieved for 6 out of 7 countries LU sent the complete data file later

Punctual transmission – Group 2 31st July target date for SRQ submission was largely achieved… …except for 5 countries (i.e. EI (new delegate), LV (change in data provider), SK, FI (long-term leave), UK (request extension delay) …in 2017: EE, SK Data was received for EL (did not supply in 2017) No data at all for MT (change in data provider) and RO (nor in previous years)  other solutions found

Use of eDAMIS by national delegates eDAMIS is the approved tool for the SRQ transmission to Eurostat Decrease in number of countries which used eDamis for the 2018 annual exercise… … IE, LU and UK transmitted by email (for comparison: 2017 not used by LU, 2016: no use for 4) Valid reason for non-use: change in delegate (delay in permission)

Validation process By 15th October 2018 calculations explicitly validated for all countries, except for 6 MS: …DK22.10, HR22.10, IT22.10, CY16.10, LU17.10, SK11.10 ….2017: late validation for 5xMS (FR5.10,IT4.10,MT3.10,AT2.10,UK11.10) No data to validate for MT  ESTAT calculations using 2017 REM file No 2017-18 calculation possible for HR, though method agreed  ESTAT calculations based on available data No data to validate for RO  forecast SI used (2018 visit)  Still allowed Eurostat report to be launched in time 37

Exceptional validation work 2018 for… DE – late retrospective adjustment (legal process) IE (no SRQ) – constructed by ESTAT FR – sample reform HR (partial SRQ) MT (no SRQ) – constructed by ESTAT RO (partial SRQ) – deductions by ESTAT SK – sample reform UK (SRQ content) – constructed by ESTAT

Supplied data – steps and grades No changes: Remuneration data supplied for upper/median/lower steps in grade, for 21 countries For remaining 4 countries, the non-supply is linked to specific national circumstances: No data for upper and lower steps for DK and SE No data for median step in grade for IT and LU

Sample coverage (of population) Sample for which data supplied represents 100% of central government population, except for : Threshold of 75% coverage should normally be applied (see SRQ guidelines). % =100 18 countries 90-100 5: CZ, CY, LV, HU, PT 75-90 1: ES (88.6%) 50-75 2: HR (35.9%), UK (53.7%) < 50 2: SK (21.3%), FI (10.4%)

ESA 2010 staff data requested Since SRQ 2014 SRQ Guidelines: "permanent statutory staff of the central government (sub-sector S.1311 of the ESA 2010 - European System of Accounts)". Table 1. Staff Central government staff broken down by category and by grade   Reference period ……………………………………………………………………. Category Grade Sample Reference population ** ESA 2010 central govt. + [1] [2] [3] [4] [5] AD * AD-total AST * AST-total SC * SC-total Total

Is ESA 2010 staff data received? NB. voluntary transmission variable per ESA2010, but mandatory requirement per Staff Regulations Annex XI  This year 13 Member States provided the figure: BG, CZ, EE, ES, CY, LV, LT, HU, AT, PT, SI, SK, UK  Newcomers are EE and ES  Not supplied by 15 countries: BE, DK, DE, IE, EL, FR, HR, IT, LU, MT, NL, PL, RO, FI, SE The time-limited derogations for ESA 2010 will soon come to an end!

Coverage of categories AD/AST/SC Equivalent national civil servants for all categories found in most Member States, except:  No changes for 2018 Changes in previous years: >2017: EE - split between AD and AST, no SC >2017: UK - 1st time all categories provided >2016: LU - no longer SC >2014: ES – introduced SC figures No AD .. No AST PL No SC BE, BG, DK, EE, EL, FR, LT, LU, AT, FI

Ratio AD:AST:SC MS July 2018 BE 43 : 57 : - DE 48 : 42 : 10 ES 43 : 57 : - DE 48 : 42 : 10 ES 44 : 34 : 22 FR 17 : 83 : - IT 31 : 62 : 7 LU 45 : 55 : - NL 51 : 46 : 3 AT 19 : 81 : - PL 89 : - : 11 SE 83 : 12 : 5 UK 11 : 24 : 65 July 2017 AD AST SC 45 : 55 : - 48 : 42 : 10 44 : 34 : 22 36 : 64 : - 31 : 62 : 7 44 : 56 : - 52 : 46 : 2 19 : 81 : - 89 : - : 11 82 : 13 : 5 11 : 24 : 65 July 2016 AD AST SC 46 : 54 : - 48 : 41 : 11 43 : 35 : 22 33 : 67 : - 31 : 62 : 7 47 : 53 : - 50 : 47 : 3 18 : 82 : - 88 : - : 12 82 : 13 : 5 6 : 94 : - July 2015 AD AST SC 46 : 54 : - 47 : 41 : 12 43 : 35 : 22 33 : 67 : - 31 : 62 : 7 41 : 52 : 7 48 : 49 : 3 18 : 82 : - 86 : - : 14 81 : 14 : 5 7 : 93 : - 44

2018 exercise: lessons and remarks 1/4 No change to core sample (or whole-EU) No change to A65 methodology Reduction in Eurostat resources reduced capacity to develop descriptive manuals 45

2018 exercise: Lessons and remarks 2/4 Result of closer collaboration with ISRP: split between transmission time limits of data sets: 31st May transmission date mainly respected for 7 countries 31st July transmission date mainly respected for the other countries This closer cooperation with ISRP worked well  15 October validation target date mainly reached  Still no 100% transmission via eDamis  Incomplete datasets for HR, MT, RO

2018 exercise: Lessons and remarks 3/4 Staff numbers (=Table 1) were mainly updated with most recent figures However, column 'ESA 2010' staff total in CPA (= Table 1) was still poorly completed ... therefore, Control Indicator "Compensation of Employees" is less accurate Sample coverage threshold 75% mainly respected Remuneration figures (=Table 2) were completed according to bilateral agreements (where applicable) Components of salary (=Table 3) were mainly filled Example calculation (=Table 4) were mainly filled Working time (=Table 5) was mainly updated References to legislative texts (=Table 6) could be better filled – even in national language 47

2018 exercise: Lessons and remarks 4/4 Eurostat Annual Report transmitted within deadline Annex 2 Report published as quickly as possible thereafter  Control Indicator "Labour Cost Index"  still not available for France  Still some large differences between forecast SI (supplied in January) and actual SI (supplied in July) 48

Organisation of 2019 data transmission Forecast for all countries – via email (=closed) Transmission of SRQ for the group of 7 sample countries – via eDamis (Art65_final1_a)  deadline 31.05.2019 Transmission of SRQ for other countries - via eDamis (Art65_final2_a)  deadline 31.07.2019

Thank you for your attention!

Links to other presentations in A6465WG agenda Agenda point 5 - A64 content Agenda point 15.1 – dissemination Agenda point 18 – manuals and assessments Agenda point 7 - international collaboration Agenda point 22 - documents for public 51