EU demands Britain pays pensions of 1,730 Eurocrats in wake of Brexit vote

A bitter clash is looming over who will foot the bill for paying pensions owed to thousands of British Eurocrats when the UK leaves the EU. Brussels has estimated its pensions liability at €60 billion (£50.7 billion) for all retired and current officials, with annual payments currently at about €1.4 billion (£1.2 billion). Some 1,730 Britons currently make up almost 8 per cent of the 22,000 retired EU officials.

The UK insists it cannot be held responsible for Eurocrat pensions which, it says, are the responsibility of EU institutions. But EU officials say Britain would be expected to pay its part of the EU's pension promises when it finally quits the EU. It potentially sets Theresa May's new government on a collision course with EU leaders as Brexit is negotiated.

Félix Geradon, deputy head of Union SyndicaleBruxelles, the biggest EU trade union, said, “The UK is correct in its point that paying the pensions
is the responsibility of the European budget. But the budget is a common responsibility of the member states.” According to some senior EU officials one compromise could involve the UK paying a lump sum to close its exposure and create a standalone pension fund. “This could be horrible, ugly. I hope it won’t be,” one official told the Financial Times. Britain has long argued that the EU's pensions are too generous and the area is one of many where complex joint liabilities will need to be unravelled.

Pensions at risk

Failure to find a solution could put at risk pension payments to about 3,000 UK officials who have worked in the EU institutions since 1973. The typical EU official is entitled to a pension worth no more than 70 per cent of final basic salary, at a 1.9 per cent accrual rate - the proportion of salary earned as pension each year.

By : Martin Banks and Michael Wilkinson
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