MEPs subscribed to a "privileged" EP pension scheme will still be guaranteed their full pension after retirement even though its fund is running into a €120 million deficit following the recent crash of the financial markets.

The decision was taken by the EP's bureau a few days ago, saying the Parliament would assume its "legal responsibilities to guarantee the rights of members of this scheme".

The controversial voluntary pension scheme, which has been in operation since 1989, comes on top of pensions that MEPs receive from their national governments as "common" citizens.

MEPs who opt to join the scheme pay €1,194 a month into a fund and the Parliament pays €2,388 a month out of its own resources. On reaching retirement age, MEPs who have served a five-year term are entitled to receive a pension of €1,393 per month. The figure doubles if an MEP has served for 10 years and triples for a 15-year term.

Four out of the five current Maltese sitting MEPs are members of this scheme. Nationalist MEP David Casa is the only one who has chosen not to subscribe as he said that he was already covered by a private insurance scheme.

However, following a new statute for MEPs to come into force after June's EP elections, newly-elected members will no longer be able to join the scheme.

In order to address the deficit, which leapt from €30 million to €120 million due to the financial crisis, the EP's bureau has decided to raise the age at which current MEPs can start to benefit from the scheme, from 60 to 63 years. Furthermore, MEPs will no longer be able to take early retirement at 50 to become eligible for 25 per cent of their pension entitlement as a lump sum.

As with all the other hefty payments and allowances given to MEPs, the management of this scheme has repeatedly been criticised by the European Court of Auditors (ECA), which questioned its legality.

In its latest annual report the ECA said that the Parliament should have clear rules to define the liabilities and responsibilities of the EP and members of the scheme in the case of a deficit.

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