Some loose wording in an agreement about who foots the bill of billions of pounds for Eurocrat pensions may blow up into a massive Brexit row.
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Since joining the European Union, Britain has seen nearly 2,000 public servants retire after working in Brussels – close to 8% of a total of 22,000 pensioners paid by the EU.
Around the same number of British officials are yet to draw their pensions.
The pension liability for these former bureaucrats is around 60 billion euros and grows with inflation each year.
The British government argues that paying the pensions is not a UK problem, but a bill the EU should pick up as the employer of the officials.
The EU points out that the UK should pay a fair share of the pension liability.
Brexit not considered
However, the Union Syndicale-Bruxelles, which is the largest trade union representing EU workers, agrees with Britain that the pensions are paid out of the EU budget and funding the budget is the responsibility of each member state.
But the provisions fail to deal with what happens to the share of a country that has since left the EU.
EU officials want the British government to calculate the country’s share of the pension liability and set up a fund to cover the amount so EU members are not paying pensions for British officials and former members of the European Parliament.
The average salary with expat allowance is £76,578 a year. Secretaries earn around £2,350 a month, while a commissioner is paid £16,820 a month. The pension pays no more than 70% of the official or MEP’s final salary.
One solution could derive from how the League of Nations dealt with finances when the organisation ceased after the Second World War and went on to become the United Nations.
Then, each member calculated their liability and put in cash to cover the pensions of their officials.
This may not happen without changes to the EU pension process, which the UK has argued loud and long is too generous.
The EU has no pension fund, but relies on state member contributions to cover outgoings each month.
Most officials pay around 9% of their salary towards their pension.
The EU also has a Qualifying Recognised Overseas Pension Scheme (QROPS) for officials who are now expats.
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