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

2. 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 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)?
WG on Article 83 of the SR. Doc Art83_07

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

4. 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 €)
WG on Article 83 of the SR. Doc Art83_07

5. 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
WG on Article 83 of the SR. Doc Art83_07

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

7. 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 contributing members at
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 « Art83_06»
WG on Article 83 of the SR. Doc Art83_07

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

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

10. 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 These updates will be implemented in case of justified reasons.
WG on Article 83 of the SR. Doc Art83_07

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