WG on Article 83 of the SR. Doc. 20140627 Art83_07 Actuarial assessment of the PSEO at 31.12.2013 - Provisional results - Item 6.2 of the agenda 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07

WG on Article 83 of the SR. Doc. 20140627 Art83_07 Elements to be considered for the 2014 pension contribution rate adjustment 2011 and 2013 salaries frozen+ 2012 salary adjusted by 0.8% (against 1.7% calculated): impact on the GSG computation The pension contribution rates should be adjusted to: 11.0% with effect from 1st July 2011, 10.0% with effect from 1st July 2012 and 10.6% with effect from 1st July 2013 according to the Commission proposal not yet adopted by the Council Art. 83.a (4): Is the calculated contribution rate 0.25 points higher or lower than the current applied rate (10.3 currently applied or 10.6% if Commission proposal is adopted)? 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07

WG on Article 83 of the SR. Doc. 20140627 Art83_07 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07

WG on Article 83 of the SR. Doc. 20140627 Art83_07 Computation of the pension contribution rate The contribution rate is computed as the actuarial value of the service cost (1 238 million €) divided by the staff annual basic salaries (4 065 million €) The total service cost is the sum of: Service cost for retirement (1 150 million €) Service cost for invalidity (51 million €) Service cost for death (37 million €) 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07

WG on Article 83 of the SR. Doc. 20140627 Art83_07 Change of the calculated pension contribution rate The 2014 calculated pension contribution rate (10.1%) is lower (-0.5%) than the 2013 calculated rate (10.6%), but not implemented This pension contribution rate decrease (-0.5%) is mainly due to: - the decrease of the General Salary Growth, - the life and invalidity tables update, - the turnover rates update, - changes on other assumptions like the assumed retirement age, - implementation of the SR in force from 1st January 2014 and - evolution of the population 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07

Contribution rate updates from 2004 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07

WG on Article 83 of the SR. Doc. 20140627 Art83_07       Summary of main inputs used in calculations This provisional assessment is based on a population of 58 725 contributing members at 31.12.2013 Real discount rate (RDR) = 2.7% (same as for the 2013 assessment) General salary growth (GSG) = -0.2% (-0.1% was used for the 2013 assessment) Individual Salary Progression (ISP) = “2014 ISP table” More explanations about assumptions used, provided in document «20140627 Art83_06» 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07

Population (contributing members) by institution 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07

Reference population by age and sex at 31.12.2013 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07

WG on Article 83 of the SR. Doc. 20140627 Art83_07 Technical implementation of the Annex XII Technical questions are dealt with by Eurostat in cooperation with national experts (Article 83 Working Group) Eurostat exchange relevant information with actuaries from ISRP, Eurocontrol and EPO Eurostat is assisted by Ernst & Young Actuaires-Conseils / Paris Ernst & Young checked this provisional calculation of the pension contribution rate and will examine any update implemented before the 1st September 2014. These updates will be implemented in case of justified reasons. 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07

The Working Group is asked to express its views on this document Thank you for your attention 27.06.2014 WG on Article 83 of the SR. Doc. 20140627 Art83_07