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Tag ‘pensions’

Holiday season bumper Euromyths special

Friday, December 21st, 2012
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Rating: 5.0/5 (12 votes cast)

Seems it is the season to be jolly cavalier with the facts over EU stories, so we are posting this composite five-part myth-buster correcting misleading stories about films, cars, I-pods, insurance and pensions. There is perhaps merit in asking the question: how can there be a serious debate in the UK about EU issues amid this cacophony of misinformation?

First, the Sun claimed on Sunday 16 December that the EU was demanding £1.5 billion to subsidise “boring European films”. In fact, The King’s Speech, Tinker Tailor, Soldier Spy and The Woman in Black are just some of the non-boring and very British films supported with EU funding and – partly as a direct result of that – enjoyed by many film-goers around the world, thus bringing in cash to the UK.

The funding is mostly agreed before the film is released – when it’s far from clear that a particular film would have big box office potential. On the basis of the theme, no one could have predicted the global success of the Kings Speech, for instance. A very English film about a stuttering English king and his speech therapist – not an obvious hit on paper.

The idea that European audiovisual work is “boring” also may not be shared by Sun readers who are fans of The Killing, Untouchable and many more.

Second, the Telegraph claimed that only sterling work by Roads Minister Stephen Hammond had prevented “Brussels” introducing rules that would have “forced owners of classic cars to take them off the road if they had been modified in any way” and “forced more than a million caravans and trailers to undergo an MOT.”  But the Commission’s proposals on roadworthiness testing would not have forced any classic cars off the road, would not have made subject to testing any UK trailers or caravans not already subject to it….. and indeed would barely have affected the UK at all, as we already made clear here on this site in September.

Third, in a similar vein of trumpeting non-existent victories over a nefarious “Brussels” monster, a series of newspapers, led by the Evening Standard on 20 December, claimed the UK had “rebuffed plans to slap a £15 tax on i-Pods and other gadgets”. But there are no such plans to rebuff. And European officials were not “set to unveil plans for an EU-wide system of levies set by Brussels”.  Internal Market Commissioner Michel Barnier has indeed asked respected former Portuguese Commissioner and Minister Antonio Vitorino to make a report on the best way of achieving coherence in various rules across Europe on private copying of music, film, etc. But Mr Vitorino has not yet reported. When he does, it will then be for the  Commission to decide whether and how to make legislative proposals to act on what he suggests….and even if the Commission does make proposals, those rules would still only enter into force if a large majority of national Ministers – under the qualified majority voting system – and a majority of MEPs agreed. So no need to “go into battle against Europe” in the colourful but rather over-imaginative phrase used by the Standard. In fact what happens in Europe are discussions between partners, of which the UK is a very influential one, not least on single market issues like this.

Next, the new insurance rules based on the European Court of Justice verdict last year that gender discrimination in pricing was illegal. These rules enter into force today and many media reported this accurately. But many others did not, despite the Commission making a fact sheet available in advance of publication. The Daily Telegraph suggested wrongly that “Although young women tend to be safer drivers than men of the same age the new rules mean they will no longer be able to benefit from their care on the road.” The paper had the good grace to print our letter of correction – in full on this occasion: see earlier posts on this site for example of how they and other newspapers have edited our replies in order to soften them.

The letter reads: “The European Court verdict outlawing gender discrimination in insurance will not stop women drivers benefiting from “their care on the road” (report, December 20). The new rules are about fairer pricing. Male drivers will no longer pay more just because they are men. Instead, all safe drivers will pay less than drivers who are less safe, and the costs and benefits of a private pension will depend on individual circumstances and not just gender. The European Commission is insisting that price cuts be passed on to policy-holders as fairly as increases. Innovative and competitive insurance companies have every incentive to apply fairer pricing cost-effectively. Some are already doing so.”

Finally, and sticking with the insurance industry, several media including the Daily Telegraph, the Daily Mail and the Daily Express followed up previous inaccurate stories on this issue by claiming that “new EU pension rules” would cost 180 000 jobs and cost British business £350 billion. This was based on a press release from the CBI and an initial report from the Press Association (later corrected), neither of which made clear one very important fact – not only are there no new rules but the European Commission has not even put on the table any proposals for new legislation.

What is more, the Commissioner responsible, Michel Barnier, has given repeated assurances – some of which have featured on this site, see here – that many of the fears being expressed are based on misunderstandings.

The reports quoted a range of sources fulminating against the “reckless” – but as yet non-existent – plans. Only the Telegraph, to its credit, came to the Commission for a comment – but it then put it right at the end of its article.

The truth of the situation is that the Commission asked the European Insurance and Occupational Pensions Authority (EIOPA) – an EU advisory and implementing body with no power to make or even propose EU law – to perform an initial study on the issue. When that was submitted in February 2012, the Commission requested that EIOPA follow up with a full quantitative impact study, which is now in progress, based on a wide consultation.  The CBI report will be valuable input to the study and to the wider consultation process.

Only once that impact study is complete – and once the Commission is in a position to take full account of all of the evidence and of the views of all stakeholders  – will the Commission come forward with a proposal.  Even then, such a proposal would only become EU law if agreed by MEPs and Ministers.

The aim of reviewing the relevant EU laws is to make sure that pension schemes are sustainable and that members are not left high and dry with no pay out – as has happened in some cases in the past.

Merry Christmas and a Happy New Year to all
The EC in London team

Barnier writes to correct Express on Pensions scare story

Friday, August 3rd, 2012
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On August 1st, The Daily Express published a front page article with the banner headline “Euro Rules to Ruin Pensions”. European Commissioner for the Internal Market, Michel Barnier wrote directly to The Express with clarifications of  factual errors and assurances that the Commission would not undermine the national occupational pension system. The letter was published in the letters page of the Express on August 3rd.

01/08/2012

Dear Sir,

I take issue with your article “Brussels threat to pension and jobs” (1 August). It contains a number of factual errors and misunderstandings.

As I have stated publicly on numerous occasions, the European Commission does not intend to copy the so-called Solvency 2-rules from the insurance sector to pension funds. Neither does the Commission intend to undermine or penalise national occupational pension systems by making them more expensive for employers.

What the Commission will do is review the current EU rules on pension funds which date from 2003, well before the outbreak of the financial crisis. The aim is to ensure that all pension funds are safe, solid and able to deliver on their promised guarantees to employees so that proper pensions will be paid not only to those who retire today but also to future pensioners. No final decisions have been taken and I have asked the European Insurance and Occupational Pensions Authority to conduct a quantitative impact study on possible future changes, in order to test the real impact of possible new measures and give all stakeholders an opportunity to participate in the process.

Michel Barnier

European Commissioner for the Internal Market and Services

EU pensioners don’t “dodge” taxes

Tuesday, July 10th, 2012
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Re: Eurocrats told: keep dodging taxes (Daily Express, 10th July 2012)

Whilst the Daily Express (10 July) correctly points out EU officials pay an EU community tax which starts at “just eight per cent” rather than paying national taxes, the paper fails to put this into perspective by adding that the EU tax is levied progressively, reaching 45% for the highest earners.  National tax systems, including the UK’s, are also progressive and start at low or zero levels for lower earners.

Also, EU staff pay 11.6% of their basic salaries in contributions to the pension scheme which is considerable higher than those paid by other national civil servants. 

In addition, staff pay a “special levy” of 5.5% on their basic salary.  Alongside EU community tax contributions, the levy is paid into the EU’s budget which in turn could be argued benefits all member states by reducing their contributions.

The EU is not pressing for higher taxes for EU citizens and to claim that the proposed tax on financial transactions does, is disingenuous.  The Commission wants good tax policies that not only promote employment, investment and growth, but are also fair on EU citizens and the FTT was prepared precisely to address all these.

Letter to the Daily Mail re your article on the rising cost of EU pensions, 26th April 2011

Tuesday, April 26th, 2011
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Sir,

With reference to your article today on the rising cost of EU pensions, any increases in the EU’s pensions bill are due to rising numbers of pensioners – an issue faced by all pension systems – and not to increased pensions for individuals. In addition, recent reform to the pension system has meant that the rate of increase to 2059 will be substantially less than it would have been without the reform (83% rather than 168%), saving billions of euros. Average pensions for EU officials will decline by 12.5% by 2059.

Jonathan Scheele
Head of European Commission Representation in the UK

Standard attack

Wednesday, September 22nd, 2010
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The Evening Standard claims that EU officials demand rise in pay and pensions, 21 September

There is no planned increase in pensions – in fact, average EU civil servant pensions are declining. Recently, Eurostat prepared a report with projections for the future costs of the pensions system in the next half century. This report shows that a reform of the EU civil service introduced in 2004 will result in huge savings on pensions. Without it, the bill would have been a lot higher. Finally, the projections show an increase until 2046, followed by a decrease both in the number of pensioners and in the total bill.

EU staff retire early with huge pensions

Sunday, August 21st, 2005
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Rating: 5.0/5 (2 votes cast)

EU PENSION GETS DODDERY DISSECTION

EU officials retire at 50… and you pay for it
TAXPAYERS in Britain are having to fund a new Brussels gravy train which will see unelected Eurocrats retiring on massive pensions at 50. Under the crazy plan they will be able to leave on 65 per cent of their salaries – or up to £6,000 a month. Those who hang on until they are 55 can retire on a full salary… Shadow Foreign Secretary Liam Fox said taxpayers would be “appalled” at having to pay for this “Euro gravy train”. As Britain puts more into the EU than it takes out, it will be one of the small number of nations having to bear the brunt of the scheme. Under a European statute, officials older than 45 on May 1, 2004, or those who have been in office 20 years can opt to take early retirement 50. Those who simply cannot wait until their 50th birthday to retire can give up work at any time.
(Daily Express 17 August 2005)

Scandal of EU parasites
The pensions industry is in crisis. Millions of us are living in fear of a poverty-stricken old age. And what is the reaction of the European Union officials, those self-selected, self-important meddlers who would seek to intrude into every aspect of our lives? They grant themselves massive pensions at 50 – an age when they are young enough to begin a second career. If ever there was an example of what a bloated and corrupt institution the EU has become, this is it. These people are leeches: gorging themselves on EU money and ensuring they will have a steady stream of the stuff for life. And who pays for this bonanza? The taxpayer – the same taxpayer who may have to work longer to fund someone else’s retirement. This grotesque scheme must be dropped now.
(Daily Express leader column 17 August 2005)

50: NEW EUROPEAN AGE OF HYPOCRISY
William Hague column
The latest total misuse of your money by the unelected European Commission is to let bureaucrats retire at 50 on 65 per cent of their salaries. .Not surprisingly, hundreds of them are jumping at the chance to do so. Meanwhile, millions across Europe are told they will have to work much longer for their pension. It does not inspire confidence in the EU that it is run by such a bunch of hypocritical wasters.
(News of the World 21 August)

EU officials enjoying a luxurious lifestyle replete with inexplicable benefits, elaborate perks and gargantuan entitlements obviously had the press and some politicians frothing at the mouth. Yet if the officials mentioned in these stories were indeed to “hang on” until they are 55 to “retire on a full salary” then, under the pension formula worked out for European Commission staff, they would have had to have begun working at the age of five. For most employees who started out a little later in life, retiring early results in a substantial loss of income. A typical official retiring at 55 loses 28% of their pension entitlement.

While the European Commission does allow early retirement without loss of pension rights, it is offered only on a very limited basis – just 40 officials have been allowed to retire early in 2005 (out of a workforce of 22,000), and all had to be 55 or over – not 50.
This early retirement scheme is used by the Commission to make savings elsewhere. For example, the entry into the EU of 10 additional member states in 2004 meant that new staff had to be recruited to ensure that European institutions could continue to function effectively. Translation services, for instance, needed people who could speak the nine extra official languages that EU enlargement entailed. To keep a lid on budgets and staffing levels, 530 officials were given the option to retire without loss of rights. But only half of the vacant posts that arose were subsequently filled – this was a one-off exercise, not a one in, one out exercise. As a result, the taxpayer did not have pay a single extra penny.

EU staff retire early with huge pensions

Wednesday, August 17th, 2005
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Rating: 3.7/5 (3 votes cast)

EU officials retire at 50… and you pay for it
TAXPAYERS in Britain are having to fund a new Brussels gravy train which will see unelected Eurocrats retiring on massive pensions at 50. Under the crazy plan they will be able to leave on 65 per cent of their salaries – or up to £6,000 a month. Those who hang on until they are 55 can retire on a full salary… Shadow Foreign Secretary Liam Fox said taxpayers would be “appalled” at having to pay for this “Euro gravy train”. As Britain puts more into the EU than it takes out, it will be one of the small number of nations having to bear the brunt of the scheme. Under a European statute, officials older than 45 on May 1, 2004, or those who have been in office 20 years can opt to take early retirement 50. Those who simply cannot wait until their 50th birthday to retire can give up work at any time.
(Daily Express 17 August 2005)

Scandal of EU parasites
The pensions industry is in crisis. Millions of us are living in fear of a poverty-stricken old age. And what is the reaction of the European Union officials, those self-selected, self-important meddlers who would seek to intrude into every aspect of our lives? They grant themselves massive pensions at 50 – an age when they are young enough to begin a second career. If ever there was an example of what a bloated and corrupt institution the EU has become, this is it. These people are leeches: gorging themselves on EU money and ensuring they will have a steady stream of the stuff for life. And who pays for this bonanza? The taxpayer – the same taxpayer who may have to work longer to fund someone else’s retirement. This grotesque scheme must be dropped now.
(Daily Express leader column 17 August 2005)

50: NEW EUROPEAN AGE OF HYPOCRISY
William Hague column
The latest total misuse of your money by the unelected European Commission is to let bureaucrats retire at 50 on 65 per cent of their salaries. Not surprisingly, hundreds of them are jumping at the chance to do so. Meanwhile, millions across Europe are told they will have to work much longer for their pension. It does not inspire confidence in the EU that it is run by such a bunch of hypocritical wasters.
(News of the World 21 August)

 
EU officials enjoying a luxurious lifestyle replete with inexplicable benefits, elaborate perks and gargantuan entitlements obviously had the press and some politicians frothing at the mouth. Yet if the officials mentioned in these stories were indeed to “hang on” until they are 55 to “retire on a full salary” then, under the pension formula worked out for European Commission staff, they would have had to have begun working at the age of five. For most employees who started out a little later in life, retiring early results in a substantial loss of income. A typical official retiring at 55 loses 28% of their pension entitlement.
While the European Commission does allow early retirement without loss of pension rights, it is offered only on a very limited basis – just 40 officials have been allowed to retire early in 2005 (out of a workforce of 22,000), and all had to be 55 or over – not
This early retirement scheme is used by the Commission to make savings elsewhere. For example, the entry into the EU of 10 additional member states in 2004 meant that new staff had to be recruited to ensure that European institutions could continue to function effectively. Translation services, for instance, needed people who could speak the nine extra official languages that EU enlargement entailed. To keep a lid on budgets and staffing levels, 530 officials were given the option to retire without loss of rights. But only half of the vacant posts that arose were subsequently filled – this was a one- off exercise, not a one in, one out exercise. As a result, the taxpayer did not have pay a single extra penny.

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