EPO Takes More Money From Staff for Speculation (Pensions), Actuarial Study Explains the Impact
A week ago the Central Staff Committee at the EPO circulated "Slides from the General Assembly of 5th June". The presentation was 29-days old at the time and the message said:
Dear Colleagues,The Local Staff Committees of The Hague and Munich held a joint General Assembly on the 5th June, which was attended by 906 participants.
During the General Assembly, the staff representation presented these slides on “The Actuarial Advisory Group Study 2025” that gave details of the initial findings from the Actuaries regarding the biennial changes to our pension contributions.
The key change in this year’s Actuarial Study, due to cascading the new “risk appetite” from the financial study, is a significant increase of the total pension contribution rate of 5.7 percentage points, up to a total of 37.8%. This is driven by an unprecedented decrease in the discount rate of 105 bps down to 2.2%.
Although an increase in the total pension contributions appears like a change that would impact all staff equally, the reality is quite the opposite. Those in the Old Pension Scheme (OPS) and in lower grades of the New Pension Scheme (NPS) are all negatively impacted since they need to pay more for the same pension. On the other hand, those in the higher grades of the NPS see a significant increase in the inflows into their Salary Savings Plan (SSP), which substantially increases their expected SSP lump sum. Such a disparity in the impact of measures that are intended to be motivated by a need for financial sustainability are a cause for concern, particularly when the beneficiaries are the decision makers.
Even whatever the Office promises to pensioners isn't fulfilled. See "New Leak: Today's EPO Breaks Its Contract With Former Staff of the EPO, Not Just Existing Staff" and also "Working Conditions at EPO Deteriorate and Staff Inquires About Pension Rights"
Regardless, here are the slides presented on the day:
Just because some companies make a promise for decades into the future doesn't mean those companies will still exist, the promise will be fulfilled, or be fully fulfilled. There's a lot of speculation around pensions because, in practice, they involve speculation in the stock market. █