European Commission pensions

European Commission pension
European Commission pension

Opportunity to secure an EU pension is an underappreciated, but a very significant benefit of working for the European Commission, European Parliament, European Council or any of the 40+ EU agencies and several other EU institutions. The EU pension is a defined benefits/final salary scheme that guarantees you an inflation-adjusted monthly income until your death. Additionally, after you pass away your surviving spouse will continue to receive a survivor’s pension until her/his death that is a significant part of the pension you were entitled to.

While all of the information below is from public sources, it is often hard to access and understand due to “legalese” and the the sheer size of the documents. This article outlines the main facts about ‘EU pensions’ in an easy to understand manner.

How to qualify for a European Commission pension?

Anyone who works for the European Commission, European Parliament, an EU agency or another EU institution, is entitled to an EU pension after 10 years of service. You have to accumulate your 10 years before you reach either the mandatory pension age (66 years in 2021) or early-retirement age (58 years in 2021).

You can work for different EU institutions at different times in your life. All of your employment periods in EU institutions will be summed up and count towards a 10-year minimum as long as you do not withdraw the accumulated pension capital to a private pension scheme.

The pension contribution (tax) is the largest deduction of one’s salary. 9.7% is automatically deducted from your salary each month to accumulate the pension capital, and no actions need to be taken by you.

What is the mandatory European Commission pension age?

The mandatory pension age is 66, at which you qualify for a full EU pension. It is possible to work until 70 if it is exceptionally justified. After reaching 70 a person is retired automatically and there is no possibility to remain in employment of EU institutions.

How large is a pension after working for EU institutions?

There is a minimum pension for former EU officials. It cannot be less then 40% of the basic salary for a temporary agent AST 1 (step 1). In 2021 this amounts to EUR 1200.24 (salary for AST 1 EUR 3,000.59 * 10 years of service * 4%).

European Commission Staff Regulations

Your pension after the 10 mandatory years of service cannot be less than the minimum pension for EU officials – see above. If you are interested in more detail, the answer depends on a number of factors:

  • Length of service. For each year of employment a person is entitled to 1,80% of the final basic salary. For example, if you have worked for EU institutions for 10 years, you will be entitled to 18% of your final basic salary; 20 years will qualify you for 36%; 30 years – 48%; 40 years – 66%.
  • Basic salary in last employment position. Your pension will be calculated as a percentage of the basic salary.
  • Pensions are adjusted to the actual cost of living in the European Union and should slightly increase over time.
  • The final pension amount may not exceed 70 % of the final basic salary.

If you have worked for several EU institutions, your pension will be calculated based on the last basic salary you received.

In practice, if you are an AD5 in Brussels at the end of your career with a basic salary of 4883, you would be entitled to the following amounts proportionally to the time worked for the EU:

  • 10 years = EUR 4883 basic monthly salary X 1.8% X 10 years = EUR 878.94. In this case you would instead receive the European Commission’s minimum pension of EUR 1200.24.
  • 20 years = EUR 1757.88
  • 30 years = EUR 2636.82
  • 40 years = EUR 3515.76

Of course, if you start as an AD 5, your final basic salary would actually be higher as you would advance through the steps of the pay scale. The above calculation is meant to just be an illustration of the principle.

Pensions and the Correction Coefficient

The European Commission Correction Coefficient is not applied to pensions (Article 82 of Staff Regulations). In practice this means that you will receive the same pension independent of where you live after retirement.

Can I retire early? What are the consequences?

The early retirement age is 58 years (in 2021).

An early retirement pension amount is reduced 3,5% for every year before mandatory pension age of 66. Hence, if you decide to retire at 58, you will incur a 28% reduction of your pension. Unfortunately, the pension will not increase once you reach the regular retirement age.

Can the EU pension be inherited by a surviving spouse and/or dependent children?

Yes. The surviving spouse of a former EU official is entitled to 60% of the pension paid to the official. The amount that can be inherited by dependent children varies on the individual situation and the ‘orphan’s pension’ can only be precisely calculated by the Paymaster’s Office.

EXAMPLE
If you are entitled to the minimum European Commission pension of EUR 1200.24 (100%)
THEN
your surviving spouse will receive up to EUR 720.14 (up to 60% of former official’s pension) until her/his end of life.

Divorced spouses are also entitled to a survivor’s pension if they can prove that the (former) EU official was supporting them based on a court order or an officially registered settlement in force between both parties.

If you are in such a situation, please contact either the European Commission’s Paymasters Office or the HR Department of the last institution your spouse was working for in order to find out the steps to take.

Very important – unless there are proven force majeure factors, the survivors pension has to be requested within one year of the former EU official’s death. Otherwise, the spouse’s and dependents’ rights are forfeited.

Does my EU pension capital accrue interest while I’m waiting for my pension age?

Yes. The accumulated pension amount accrues compound interest at a rate of 2.9% per year (in 2021).

What if I leave an EU job before I accumulate 10 years of service?

For most people the best strategy is to leave your pension capital with the European Commission Paymaster’s office as it accrues a 2.9% per annum in interest. You can accumulate your 10 years in EU institutions over an unlimited number of instances of working for EU institutions until the mandatory retirement age of 66.

Some institutions strongly encourage the “transfer out” of the accumulated EU pension capital claiming that it might be “very hard” to do it at a later date. However, there is no particular difference in the amount of work for you whether you decide to move your EU pension capital to a third tier pension management fund right after leaving an EU institution or much later. The only caveat – you pension capital left with the EU Paymasters Office will be completely lost if you happen to die before reaching your pension age. And, of course, don’t forget about your pension capital once your retirement age comes and you have not accumulated the necessary 10 years to qualify for an EU pension.

If you decide that you never again want to work for the EU, you can “transfer out” your pension capital to any of the European Commission-approved pension management schemes in all EU member states. The funds will only become available to you once you reach the age of 60.

Reasons to “transfer out” your accumulated EU pension capital:
*
You do not plan to ever again work for EU institutions
* You are certain that you will be able to invest your EU pension capital in an investment vehicle that returns substantially more than 2.9% per annum
* You are worried that you might die before retirement age (chronic disease, family health history, dangerous hobby, etc.)

Once you “transfer out” but again start working for a EU institution, you will be able to transfer in your accumulated pension capital, but not the accumulated ‘pension years’ to qualify you for an EU pension. So – choose carefully.

Not only an EU pension, but also health insurance for you and your spouse

After an EU official becomes entitled to an EU pension, the person and his/her spouse and any dependents also become entitled to the JSIS – the European Commission healthcare insurance scheme. It reimburses between 80-85% of most healthcare costs. If you have what are considered serious illnesses you can obtain a 100% reimbursement. This should be a major appeal for people in retirement.

If there are any dependents, the retiree is also entitled to the relevant allowances such as the household allowance and dependent child allowance.

Where to get consultations and help regarding European Commission pensions?

Former employees of EU institutions are usually advised to contact the HR department of the last institution they were employed by.

It is also possible to get in touch with Office for the Administration and Payment of Individual Entitlements also know as the Paymasters Office (PMO), contacts here. If you have questions about JSIS, the European Commission health insurance scheme, including coverage of funeral expenses, you can find the relevant Paymasters Office contacts here.

AIACE – International Association of Former Staff of the European Union

AIACE logo
AIACE logo

When you retire from an EU institution, consider becoming a member of AIACE. For the 40€ annual fee (differs by location of national units) you can get a number of benefits:

  • Access to a helpdesk (consultations on key retiree issues). Virtual and in-person consultations in Brussels
  • Legal assistance at a reduced fee
  • Special complimentary insurance availability to complement risks not covered by the JSIS (currently offered by Cigna)
    • Accident coverage
    • Coverage of the difference in all medical costs and those reimbursed by the JSIS
    • A monthly Cigna consultation
  • Quarterly VOX bulletin sent to all of the retired staff. National bulletins sent to members of country chapters
  • Yammer chat
  • Voluntary work opportunities and possibility to received help from other volunteers; social contacts and events

Main facts about AIACE:

  • AIACE has special Partnership Agreements with the European Commission, the European Parliament, the European Court of Justice, the European Social and Economic Committee, the Committee of the Regions, the Court of Auditors, and the Council. All the above institutions recognize AIACE as the representative of their retired staff
  • Founded June 1969, AIACE has over 12000 members out of a total approximately 23500 retired staff
  • 15 national branches (20 retirees can form a national branch)
  • AIACE lobbies on behalf of retired EU officials and defends their rights at the European Commission and other EU institutions. AIACE is even an official member of a number of working groups that affected the interests of former EU administrative agents and contract agents

AIACE contact details:

  • Website: www.aiace-europa.eu/
  • Address: N105 00/23, 105 Avenue des Nerviens 00/036, Brussels, 1040, Belgium
  • Telelphone: (Belgium): 02.2952960
  • Email: aiace-int@ec.europa.eu

Do you still have questions regarding EU pensions?

As usual, if there is an unanswered question or you have spotted a mistake, please write a comments and me and the EUE community will do our best to help and update the article.

This article is based on the European Commission Staff Regulations 
and other publicly available information such as EU institutions’ 
vacancy announcements. As the EU legal documents and even 
information on the various websites are hard to understand, this 
post is one from a series of articles that try to make information 
about employment in the European Commission and other EU institutions
more accessible.

By Ben

I'm working at my third EU institution. This website is my way of sharing know-how and expertise no matter if you just plan to get an EU job, already have one, or are planning to leave one. At all stages of your EU job "lifecycle" there are things which are important or nice to know to make the journey more comfortable. I really appreciate every comment that helps me improve the articles for other readers! Tips on new article topics welcome!

18 comments

  1. Hello,

    I have received an offer from an EU institution. I have read that there is a minimum pension for former EU officials. It cannot be less then 40% of the basic salary for a temporary agent AST 1 (currently EUR 1200.24).
    I have also read that early retirement pension amount is reduced 3,5% for every year before mandatory pension age of 66.
    Is this reduction of 3.5% aplicable to the minum of 1200.2 as well?

    Thanks.

    Fran

    1. That’s a great question, to which I at the moment don’t know the answer about. When I’ll find out, I’ll update the article.
      The PMO regularly organized only webinars about pension rights. Do sign up for one of these through your institution to get answers to the above and similar questions.

  2. If you enter service late in life and with a fair size of accumulated pension in a national scheme, can you transfer this in to the EU scheme and use that to take you over the 10y requirement? Say you have a fund which is equivalent to 7y contributions when you join. You transfer that in and work for 5y before retiring. Are you then eligible for a EU pension?

    1. Hi! As far as I’m aware, you cannot reach the 10y participation requirement by importing your national pension scheme participation time. The 10 years have to be collected in the EU pension scheme.

      However, you will be entitled to an EU pension if you retire from an EU institution before you reach 10 years of service. In this case the years accumulated under the national pension scheme and transferred in the EU scheme might increase your pension amount.

      PMO regularly organizes workshops on “transfer in” of pension rights, please sign up to these workshops, they are very useful and give you the possibility to ask questions directly.

  3. Hi Ben
    Thank you very much for the very interesting read.
    This fall I reached 10 years of working for an EU institution.
    In the meantime I asked for an estimate for a transfer of my pension right from my home country, the 4 years I accumulated there translate in 6 months in the EU system.
    Long story short now: I am planning to do something completely different in my life, might get into private business in my home town in a couple of years.
    If I’m to leave my so far accumulated funds in the EU pension system, I will be entitled to the pension when I am 58 or 66? I am asking because once I get out of the EU institution, I am not planning to be back.
    Thanks very much in advance for you help. Best,
    Anja

    1. Hi!
      1) Regarding transfers-in from national to the EU pension system, I’m still trying to understand all the details, but I believe that what counts is the amount of funds transferred-in, rather than your period of insurance in the national pension scheme. Funds accumulated in the national scheme are equalized with the amount of contributions in one year in the EU system. So it will differ from case to case.
      2) Regarding early retirement, see section “Can I retire early? What are the consequences?”. Yes, you can retire as early as age 58, however, you pension will be decreased by 3.5% a year or 28% from what you would be entitled at 66 and will remain so until your death.

      You can withdraw the funds from 58 onwards. This applies both if you’ve left the funds with the EU pension system or you’ve transferred-out to a 3rd tier pension fund (privately managed fund) in an EU MS. It appears that you might be financially savvy. If so, you can evaluate whether you are able to find a privately managed pension fund from the ones approved by PMO in any EU MS, and that has a higher growth rate than the flat rate you get in the EU pension system. If you choose the latter, you might have substantially higher pension or funds to withdraw at age of 58 or later, but you might also make a poor choice and actually receive less.

      1. Thanks, Ben 🙂
        You are absolutely right about transfers, what matters is the amount in €€. Coming from a relatively new MS, my funds accumulated in 4 years in the national scheme got me a 6 months and 10 days in the EU pension system.
        Thank you for the effort in publishing informations about the EU pension scheme, I really appreciate it.
        Best,
        Anja

  4. Dear Ben,

    I think that the 10 years of service is not the case for all. The staff regulation mentions:

    An official who has completed at least ten year’s service shall be entitled to a retirement pension. He shall, however, be entitled to such pension, irrespective of length of service, if he is over pensionable age, if it has not been possible to reinstate him during a period of non-active status or in the event of retirement in the interests of the service.

    “ He shall, however, be entitled to such pension irrespective of length of service, if he is over pensionable age,”

    In other words, a permanent official hire at the age of 55, with one year of service and 10 years CCP, in my view he/she will be eligible for the minimum pension. Is this right?

    Many thanks,
    Ioannis

    1. Dear Ioannis,

      Thank you for pointing this out! I believe that you are, in fact, right and I have overlooked this provision in the Staff Regulation. This actually merits a separate, highly visible section in the article as an excellent pre-retirement move for a lot of experienced professionals in EU countries where pensions are low. I will update the article at the closest opportunity.

      P.S. I’m so happy that pooling information from the readers and benefiting from all of your experiences works more and more frequently with this blog/page to all of our advantage. I hope that people will point out things that I’ve missed or should be clearer about more frequently as it improves the content significantly.

  5. Dear Ben,

    What would happen in this example?
    You work for 10 years in the EU.
    You then leave for several years.

    Case 1: You apply for the minimum pension at the age of 66
    Case 2: You apply for the minimum pension at the age of 58

    Is the minimum pension of 1200 euros reduced in case 2, by 28%

    In both cases, the amount of years is the same. Also, one maybe have accumulated these ten years between his 48th and 58th birthday, and another between his 55th and 65th birthday.

    Thank you

    1. Case 2 unfortunately is correct. And worst of all – the pension does not increase to 100% after you reach the age of 65. So a really tough choice for those who want to retire earlier than 65 and enjoy life (like I would do if I could).

      I did not really get what you meant in your last paragraph.

      1. Thank you for your kind reply. Indeed, I should rephrase the second paragraph 🙂

        Person A person and person B work for 10 years each.

        – Person A from the age of 48 to 58
        – Person B from the age of 56 to 66

        Person A’s minimum pension is 864 euros
        Person B’s minimum pension is 1200 euros

        Is this correct?

      2. Elm, in reply to your Oct 25 clarification, both persons are entitled to the same amount of pension. It would be ~1200 or higher (depending on last salary) if both persons claim their pension at the age of 66. It does not matter that one of them stopped contributions to the system earlier than the other. The pension would only be decreased in case of EU pension claim before the age of 66 (any period from 58-66).

  6. I have accumulated 6 yrs of FGIV pension contribution in the EC system. I left the EC recently, and while they push to channel your funds out, they can not legally require it. What is your advise, what should me (and thousands of others) do? What is better, leave the funds in the EC – and what this would mean in terms or claiming it later (in 10-20 years), in terms of amount and choices?

    1. Indeed, you cannot be forced to withdraw funds from the EU pension system.

      While each situation is different and there might be more nuanced circumstances for each individual person, in most cases the decision to withdraw or keep funds in the EU pension system should depend on whether you ever again plan to work for the EU and qualify for the EU pension. As written above, one needs 10 years of service to qualify. In your case you only need 4 more years, so it might be reasonable to keep the funds in. It is always possible to withdraw the funds, unless you suddenly die in which case the funds disappear. It is much harder and more expensive to rejoin the EU pension system if you have withdrawn the funds.

      If you are certain that will never again work for the EU, then it actually makes sense to withdraw the funds and invest in a 3rd tier private pension funds that offers returns larger than capital growth in the EU pension system. If you find a pension fund that just invests in the so-called index funds, then you are almost certain to have higher returns on your pension capital than the EU pension system offers.

      I have personally chosen to stay with the EU pension system as a) it’s a relatively safe bet, b) capital still grows more or less in line with inflation, c) there are other benefits at pension age such as the survivor’s pension for one’s spouse and entitlement to JSIS. All of this makes the EU pension scheme attractive to me.

  7. Dear Ben (?),

    Thank you for this comprehensive explanation. Question: if I work in PL with a coefficient 70,9%, and after service, I return to BE, will my pension be calculated on bases of my last salary (70,9%) or will it be 100% based on BXL coefficient? Additionally, what means ‘transfer’ in the 2nd column of the coefficient table?

    Thank you.

    Ika

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