52002PC0136(03)

Proposal for a COUNCIL REGULATION introducing special measures to terminate the service of European Parliament officials and temporary staff working in the Political Groups

(presented by the Commission)

EXPLANATORY MEMORANDUM

When Parliament was consulted by the Council on the Commission's proposal for a Regulation on termination-of-service as part of the reform of the Commission, it presented a number of amendments in its report (A5-0194/2001 of 30 May 2001), primarily in order to extend the scheme to other institutions, in particular to Parliament itself.

While the Council was open to participation by the other institutions in the termination-of-service scheme, it took the view that they should present their reasoned requirements in advance and demonstrate that these would have no impact on the budget and that their participation in the scheme should be covered by separate regulations.

On 14 December 2001, Parliament's Director-General for Personnel informed the Commission's Director-General for Personnel and Administration of Parliament's exact requirements in the context of the termination-of-service scheme and demonstrated that these would have no impact on the budget. The terms applicable to the termination of service for Parliament officials will be identical to those applicable to the Commission's staff.

Parliament has estimated the number of staff to whom the scheme would apply at 100 officials and 24 temporary staff working in the Political Groups, spread over a period of three years. The purpose of this proposal is therefore to authorise a termination-of-service scheme for 100 Parliament officials and 24 temporary staff working in the Political Groups between 2002 and 2004.

Provided the impact on the budget is neutral, the savings generated by the scheme (the difference between the cost of total remuneration and the cost of the termination-of-service allowance) should allow around 47 new officials and 11 new temporary staff to be recruited.

2002/0070 (CNS)

Proposal for a COUNCIL REGULATION introducing special measures to terminate the service of European Parliament officials and temporary staff working in the Political Groups

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 283 thereof,

Having regard to the proposal made by the Commission after consulting the Staff Regulations Committee in accordance with Article 10a of the Staff Regulations of Officials of the European Communities [1],

[1] Hereinafter called the "Staff Regulations".

Having regard to the opinion of the European Parliament [2],

[2] OJ C ..., ..., p. ...

Having regard to the opinion of the Court of Justice [3],

[3] OJ C ..., ..., p. ...

Having regard to the opinion of the Court of Auditors [4],

[4] OJ C ..., ..., p. ...

Whereas:

(1) The European Parliament has been engaged in a thorough restructuring of its way of operating since 1997, when the Bureau adopted the new staff policy.

(2) In the light of four years' experience of implementing this new policy, and with a view to establishing a longer term policy for recruitment and appointments, based on foreseeable requirements for specific skills, Parliament has been studying its human resource requirements for the years to come, as part of an exercise to draw up an operational list of duties.

(3) Parliament intends to take steps, mainly through training, to help redeployed staff to adjust in the most satisfactory and effective way possible.

(4) However, the skills of some officials and temporary staff working in the Political Groups, particularly older members of staff, are deemed not to be in line with the duties to be performed.

(5) Parliament needs new skill profiles and a rebalancing of its establishment plan, but the number of officials retiring in the normal way will not be sufficient to allow the necessary skills to be acquired through recruiting new staff within a satisfactory timescale.

(6) Special measures should accordingly be adopted with regard to termination of service together with internal administrative arrangements for effective monitoring of the implementation of this Regulation.

(7) These measures must be applied as far as possible with due regard for geographical balance, in compliance with the principles governing this Regulation.

(8) These measures must be budget-neutral,

HAS ADOPTED THIS REGULATION:

Article 1

The Parliament is hereby authorised, in the interests of the service and in order to take account of the need to renew skills arising from the process of adjusting its resources to its activities, to adopt measures up to 31 December 2004 for terminating the service within the meaning of Article 47 of the Staff Regulations of officials and temporary staff working in the Political Groups who have reached the age of 55 and have completed at least 15 years' service, with the exception of those in Grades A1 and A2, under the conditions specified below.

Article 2

The total number of officials to be covered by the measures referred to in Article 1 shall be 100. The total number of temporary staff working in the Political Groups to be covered by the measures referred to in Article 1 shall be 24.

This measure shall be without prejudice to decisions to be taken under the annual budget procedures.

Article 3

Within the ceilings laid down in Article 2, and with due regard to the interests of the service, the European Parliament, after having consulted its Joint Committee, shall select from among the officials and temporary staff working in the Political Groups applying for termination of their service under Article 1 those to whom it wishes to apply this measure.

It shall consider as a priority officials and temporary staff affected by the reorganisation measures and measures for adjusting its resources to its activities, in particular redeployment, whose skills are deemed not to be in line with the duties to be performed. It shall take account of the amount of training necessary for them to undertake new tasks, their age, ability, performance, conduct in the service, family circumstances and length of service.

Article 4

1. Former officials and temporary staff whose service is terminated under Article 1 shall be entitled to a monthly allowance set as a percentage of the last basic salary received according to age and length of service at the time of departure as shown in the table in Annex I to this Regulation. The last basic salary shall be that for the grade and step held by the official or member of the temporary staff concerned at the time of departure, determined by reference to the table in Article 66 of the Staff Regulations in force on the first day of the month for which the allowance is payable.

2. Such former officials and temporary staff may at any time, at their own request, receive a retirement pension on the terms and conditions laid down in the Staff Regulations. Entitlement to the allowance shall then cease. It shall cease in any event not later than the last day of the month in which the former official or member of the temporary staff concerned reaches the age of 65 years or as soon as he or she is eligible before that age for the maximum retirement pension of 70% (Article 77 of the Staff Regulations).

At that point the former official or member of the temporary staff shall automatically receive a retirement pension, which shall take effect on the first day of the calendar month following the month in which the allowance was paid for the last time.

3. The allowance provided for in paragraph 1 shall be adjusted by the weighting fixed for the country situated inside the Community in which the recipient proves that he is resident. Recipients shall provide evidence each year of their place of residence.

If the recipient resides in a country situated outside the Community, the weighting to be applied to the allowance shall be 100.

The allowance shall be expressed in euro. It shall be paid in the currency of the country of residence of the recipient. However, if it is subject to the weighting of 100 under the second subparagraph, it shall be paid in euro.

An allowance paid in a currency other than euro shall be calculated on the basis of the exchange rates referred to in the second paragraph of Article 63 of the Staff Regulations.

4. Where gross income accruing to the former official or member of the temporary staff from any new employment, when combined with the allowance provided for in paragraph 1, exceeds the total gross remuneration last received by the official or member of the temporary staff concerned, determined by reference to the salary scales in force on the first day of the month for which the allowance is payable, the amount of the excess shall be deducted from that allowance. That remuneration shall be weighted as provided for in paragraph 3.

Gross income and total gross remuneration last received, as referred to above, mean sums paid after deduction of social security contributions but before deduction of tax.

The former official or member of the temporary staff shall give a formal undertaking to provide any written proof which may be required, including an annual statement of income in the form of a salary statement or audited accounts, as appropriate, and a sworn or authenticated declaration that he or she is not in receipt of any other income from any new employment, and shall notify the institution of any other factor which may affect his or her right to the allowance, failing which he or she shall be liable to disciplinary action as provided for in Article 86 of the Staff Regulations.

5. As set out in Article 67 of the Staff Regulations and Articles 1, 2 and 3 of Annex VII thereto, the household allowance, dependent child allowance and education allowance shall be payable either to the recipient of the allowance provided for in paragraph 1 or to the person or persons to whom custody of the child or children has been entrusted by law or by an order of court or of the competent administrative authority; the household allowance shall be calculated by reference to the allowance provided for in paragraph 1.

6. Provided that they are not receiving income from any gainful employment, recipients of the allowance shall be entitled, in respect of themselves and persons covered by their insurance, to benefits under the sickness insurance scheme provided for in Article 72 of the Staff Regulations provided they pay the relevant contribution, calculated on the basis of the allowance provided for in paragraph 1, and are not covered by another sickness insurance scheme by virtue of legal or statutory provisions.

7. During the period for which they are entitled to receive the allowance, but for not more than 65 months, former officials and temporary staff shall continue to acquire further rights to retirement pension based on the salary carried by their grade and step, provided that the contribution provided for in the Staff Regulations by reference to that salary is paid during that period and provided that the total pension does not exceed the maximum specified in the second paragraph of Article 77 of the Staff Regulations. For the purposes of Article 5 of Annex VIII to the Staff Regulations, such period shall be considered to be a period of service.

8. Subject to Articles 1(1) and 22 of Annex VIII to the Staff Regulations, the surviving spouse of a former official who dies while in receipt of the allowance provided for in paragraph 1 shall be entitled, provided that the marriage was contracted at least one year before the former official or member of the temporary staff left the service of the Council, to a survivor's pension equal to 60% of the retirement pension which, irrespective of length of service or age, would have been payable to the former official if he or she had qualified for it at the time of death.

The survivor's pension referred to in the previous subparagraph shall not be less than the amounts specified in the second paragraph of Article 79 of the Staff Regulations. However, in no case may it exceed the amount of the retirement pension to which the former official or member of the temporary staff would have been entitled had he or she survived and been granted a retirement pension when ceasing to be eligible for the allowance referred to above.

The minimum duration of the marriage as referred to in the first subparagraph shall not be taken into account if there are one or more children of a marriage contracted by the official or member of the temporary staff before he or she left the service provided that the surviving spouse maintains or has maintained those children.

Nor shall the duration of the marriage be taken into account if the death of the former official or member of the temporary staff resulted from one of the circumstances referred to at the end of the second paragraph of Article 17 of Annex VIII to the Staff Regulations.

9. On the death of a former official or member of the temporary staff in receipt of the allowance provided for paragraph 1, dependent children within the meaning of Article 2 of Annex VII to the Staff Regulations shall be entitled to an orphan's pension on the conditions set out in the first, second and third paragraphs of Article 80 of the Staff Regulations and in Article 21 of Annex VIII to the Staff Regulations.

Article 5

This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President

ANNEX 1

ALLOWANCE PERCENTAGE

The allowance percentage referred to in Article 4(1) of this Regulation will be determined on the basis of the age and length of service of officials or temporary staff at the time of departure as shown in the table below:

>TABLE POSITION>

Level of allowance depending on age and length of service

Age and length of service will be considered in relation to the actual date of termination of service of the official or member of the temporary staff concerned.

Applying these conditions to the target group of officials and temporary staff on a weighted basis gives a maximum average allowance of 62.5%.

FINANCIAL STATEMENT

1. TITLE OF OPERATION

Termination-of-service allowance under the scheme required to accompany the reform of the Commission

(Council Regulation (ECSC, EC, Euratom) No ....)

2. BUDGET HEADING(S) INVOLVED

A11 staff in active employment

A1218 allowances for staff whose service is terminated

A1230 employer's contribution to the Joint Sickness Insurance Scheme

A1290 weighting for staff whose service is terminated

A1291 adjustments to various allowances

A400 tax proceeds

A401 proceeds of staff contribution to the pension scheme

A403 proceeds of the temporary contribution

3. LEGAL BASIS

Article 283 of the Treaty establishing the European Community

4. DESCRIPTION OF OPERATION

4.1 General objective

The purpose of the operation is to allow 100 officials and 24 temporary staff working in the Political Groups who are affected by the redeployment of Parliament's human resources in 2002, 2003 and 2004, and who would not be able to change their career orientation in order to perform new activities, to leave Parliament before the normal retirement age. The departure of these officials and temporary staff should enable new officials and temporary staff to be recruited with the required skills and qualifications.

4.2 Period covered and arrangements for renewal or extension

The 100 officials and 24 temporary staff will depart between 2002 and 2004. The budget impact will mainly cover the years 2002 to 2012. On the basis of the target group described in the Annex to this financial statement, the allowances payable will begin to tail off from 2006, as the former officials and temporary staff reach the normal retirement age and become eligible for retirement pension, and will cease in 2012, the year in which these officials and temporary staff should come under the pension scheme.

5. CLASSIFICATION OF EXPENDITURE OR REVENUE

5.1 CE

5.2 Non-differentiated appropriations

5.3 Type of revenue: deductions from the allowance

6. TYPE OF EXPENDITURE OR REVENUE

Operating budget - administrative expenditure: termination-of-service allowances, contribution to the sickness insurance scheme, deductions from the allowances

7. FINANCIAL IMPACT

The starting point is that the operation should have a neutral effect on the budget. The savings achieved through the departure of 100 officials and 24 temporary staff (the difference between the cost of their remuneration as officials in active employment and the allowance they would receive after leaving the service) could enable 47 new officials and 11 temporary staff to be recruited in categories A/LA, B and C.

Overall, there will be a recovery by the budgetary authority of 66 posts (difference between 124 departures under the scheme and 58 new recruits). In the longer term a saving will begin to be felt from 2006. Between 2006 and 2012 the amount of the allowances will decline gradually as the officials whose service is terminated early come under the retirement pension scheme. The savings generated will be equivalent to 66 posts recovered by the budgetary authority around 2012.

7.1 Method of calculating the total cost of the operation and breakdown by year

See the detailed description in the Annex to this financial statement.

The profile of officials and temporary staff whose service is terminated, the number of departures in 2002, 2003 and 2004, the annual budget cost of an official or member of the temporary staff in active employment, the annual budget cost of an official or member of the temporary staff whose service is terminated, the annual savings arising from termination and the period for which the allowance is payable (before the pension scheme takes over) are shown in the table below:

>TABLE POSITION>

The budget situation, considered over the period for which the allowance is payable to the officials whose service is terminated, is shown in the table below which sets out in successive columns:

- the number of officials/members of the temporary staff whose service is terminated,

- the number of allowances payable,

- the cost of maintaining those officials/members of the temporary staff in active employment,

- the cost of the allowances payable,

- the savings arising from the scheme

>TABLE POSITION>

The average annual budget cost of one new official or member of the temporary staff is EUR107 162 at category A3, EUR71 313 at A7, EUR49 841 at B5 and EUR43 248 at C5. The funds available as a result of the departure of 100 officials and 24 temporary staff will therefore enable 47 new officials and 11 temporary staff to be recruited (in all 5 at A/LA3, 13 at A7, 13 at B5 and at 25 C5), at a total annual budget cost of EUR3 291 694.

>TABLE POSITION>

8. FRAUD PREVENTION MEASURES PLANNED

Not applicable

9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS

See point 7.1

10. ADMINISTRATIVE EXPENDITURE (PART A OF SECTION III OF THE GENERAL BUDGET)

10.1 Impact on the number of jobs

None

10.2 Overall financial impact of additional human resources

None

10.3 Increase in other operating expenditure arising from the operation, in particular costs arising from meetings of committees and expert groups

None

ANNEX TO THE FINANCIAL STATEMENT

BASIS FOR CALCULATING BUDGET NEUTRALITY

This Annex sets out in detail the parameters for calculating the particulars shown in the budget statement. The starting point is that the operation should be budget-neutral. The method of calculation involves determining the savings to be achieved through a termination-of-service scheme for 100 officials and 24 temporary staff (difference between the cost of their remuneration in active employment and the allowance they would receive after leaving the service) and the number of new staff that these savings would allow to be recruited. This approach applies during the period for which the allowance is payable, up to the time the former officials and temporary staff become eligible under the pension scheme.

Parameter 1: Target group

The scheme will apply to 100 officials and 24 temporary staff, most of whom will have reached the end of their career bracket ('fin de carrière'). Based on the existing target group of officials and temporary staff, the breakdown would be roughly as follows:

>TABLE POSITION>

Parameter 2 : Average profiles of officials and temporary staff availing themselves of the scheme

The costs are based on the standard profiles below:

A3 profile A3/2, married, with no dependent children, recruited at 32

A/LA4 profile A4/2, married, with no dependent children, recruited at 32

B1 profile B1/2, married, with no dependent children, recruited at 30

C1 profile C1/2, married, with no dependent children, recruited at 28

D1 profile D1/2, married, with no dependent children, recruited at 30

The average age of the target group is 57.

Parameter 3 : Average profiles of newly recruited officials

Officials and temporary staff availing themselves of the scheme will be replaced by officials and temporary staff in categories A, B and C recruited at the basic grades (A7/3, B5/3 and C5/3 respectively), and presumed to be married with one dependent child.

Parameter 4: Average level of allowance

Applying the conditions set out in Annex 1 to the Regulation on a weighted basis to the existing target group of officials and temporary staff (meeting the criteria for age and length of service) gives an average level of allowance of 62.5%, which is the level used to make the calculations.

Parameter 5: Other assumptions

The level of the expatriation allowance, included in the remuneration of staff in active employment, is estimated at 12% (average of the rates of 0%, 4% and 16% according to individual situations).

The geographical weighting applied to the remuneration of the former officials and members of the temporary staff is estimated at 105 (depending on where they establish residence after leaving the service).

Annual budget savings arising from the scheme

The annual budget cost of individual officials and members of the temporary staff before leaving the service is shown in the table below:

>TABLE POSITION>

Details of the annual budget cost of individual officials and members of the temporary staff after leaving the service are shown in the table below (expenses associated with leaving the service are not additional costs but costs paid in advance and are not included in the calculation):

>TABLE POSITION>

Details of the annual budget savings achieved as a result of the scheme (savings from the departure of one official or member of the temporary staff and total savings) are shown in the table below:

>TABLE POSITION>

The total annual budget saving is EUR3 348 690.

Cost of new posts and recruitment possibilities

Details of the average annual budget cost of one new official or member of the temporary staff are shown in the table below (the career weighting takes account of career advancement during the relevant period; expenses associated with taking up appointment are not included in the calculation):

>TABLE POSITION>

The annual budget cost of recruiting 47 new officials (4 A/LA3, 8 A7, 10 B5, and 25 C5) and 11 new temporary staff (1 A/LA3, 5 A7, and 5 B5) is equivalent to the total annual budget savings arising from the scheme:

>TABLE POSITION>

The savings arising from the departure of 100 officials and 24 temporary staff will mean that 47 new officials (4 A/LA3, 8 A7, 10 B5, and 25 C5) and 11 new temporary staff (1 A/LA3, 5 A7, and 5 B5) can be recruited.