The EU honeypot – over next 44 years UK will pay £10bn for EU pensions
How Theresa agreed to part-fund EU pension and employee benefits until 2064
© Brexit Facts4EU.Org 2021
A Facts4EU.Org report on just one part of the EU’s ‘divorce bill’
STOP PRESS - SATURDAY 09 JAN 2021
We now know that the updated figure is £12.1bn.
Please come back to read our article on Sunday for the latest news on this.
No-one yet knows how much the final ‘divorce bill’ from the EU will be. Not even the Government. Yesterday we showed how the UK has already paid over £41 billion to the EU since the majority of the electorate voted to leave, on 23 June 2016.
Today Brexit Facts4EU.Org looks at another component of the final tally: EU pensions and employee benefits.
Brexit Facts4EU.Org Summary
£10 BILLION OF UK PUBLIC MONEY
- Total pensions and employee benefits bill to be paid by the UK : £9.5-10.5 BILLION
- 44 years of continued UK payments to the EU
- Each year it’s the EU that will tell the UK what it owes for the previous year
- The UK will be part-paying the pensions and employee benefits of all EU staff, not just British staff
- Belgians form the biggest nationality group
© Brexit Facts4EU.Org - click to enlarge
The pensions bill will rise
We use official figures, even when we believe them to be wrong or out-of-date, because then our readers can trust that the information we provide comes from official sources. In fact the figures in the chart above will increase to a total of at least £10.5 billion, as we explain below.
Why the bill will only increase
The Office for Budget Responsibility puts the total at £9.5 billion, and it is their annual figures that we have used in our chart above. However, these figures were calculated in 2018. We now know that the European Commission’s financial accounts for 2019 showed a €17.2bn increase in the net liabilities of its pension scheme. This takes the total to almost €100 billion euros (€97.7bn). And this means the share which the UK is responsible for paying will be €11.6bn, or £10.5 billion in British money.
In the EU’s accounts for 2019 it states: “This Pension Scheme of European Officials (PSEO) liability has increased mainly because of the actuarial loss from changes in financial assumptions caused by a sharp decrease in the nominal discount rate.” In other words, it is the EU’s economic crisis which has caused the increase. We assume this will only get worse as a result of COVID-19.
The UK must pay for the EU’s big-wigs first
UK pension and benefits liabilities for MEPs and “EU high-level public office holders” such as President von der Leyen, former President Juncker, and Michel Barnier will effectively be paid in advance to the EU over 10 years, not as they accrue over 44 years.
No reason is given for this.
Right: Jean-Claude Juncker, © EU Commission
So who exactly are we paying for?
The wording of the agreement between the EU and the UK relates to the UK’s share of the total cost of EU pensions. This liability applies to the whole pension and employee benefits pot, irrespective of the nationality of the individuals. The largest nationality amongst EU staff is, unsurprisingly, Belgian.
So, the UK is NOT only paying for the pensions of UK staff, as the public might have assumed. The UK will pay for a share of the total pensions and employee benefits pot for all nationalities, and it will do so until the year 2064. This relates to staff from all EU institutions – the Commission, the EU Parliament, and all agencies.
Brexit Facts4EU.Org Summary
Whose pensions and benefits are you paying for?
Here are a few of the British Europhiles who are benefiting, some of them to the tune of £90,000 per year:
Montage by Brexit Facts4EU.Org 2021
L-R: Sir Nick Clegg, Lord Kinnock, Lady Kinnock, Lord Mandelson,
Lord Tugendhat (father of arch-Europhile MP Tom Tugendhat) and Lord Patten
And here are a few of the EU personalities whose pensions will benefit from continued UK funding:-
Montage by Brexit Facts4EU.Org 2021
L-R: Jean-Claude Juncker, Michel Barnier, Ex-President Tusk, Guy Verhofstadt MEP,
Ex-President Herman van Rompuy ("Who are you?" - Nigel Farage), EU ex-Foreign & Defence Secretary Federica Mogherini
Who in the UK agreed to all of this?
Here we will quote directly from a House of Commons Library Briefing Paper, published between Christmas and New Year. It could scarcely be more current.
“There is no definitive cost to the settlement. The final cost to the UK will depend on future events such as future exchange rates and EU budgets.”
In its timeline, the HoC Library confirms the following: [The emphasis is ours.]
“November 2018: A Withdrawal Agreement is agreed between Theresa May’s Government and the EU. The Withdrawal Agreement (WA) sets out, in legal terms, how the financial settlement will be calculated and administered. It also sets out the practicalities for payments between the UK and EU after 2020.
“October 2019: Boris Johnson’s Government negotiates and publishes a revised Withdrawal Agreement. There are no changes to the financial settlement.
“January 2020: The European Union (Withdrawal Agreement) Act 2020 becomes UK law. The European Parliament gives its consent to the Withdrawal Agreement. This means that the financial settlement becomes legally binding.”
The chart in our red summary box above represents the latest official information available. It shows the annual payments the UK will have to make to the EU for the next 44 years, purely for the pensions and employee benefits of Frau von der Leyen, Herr Juncker and Commissioners, Michel Barnier, MEPs and all other EU staff.
It does NOT include all the other payments which the UK will be making as part of “the divorce bill” from the EU, which we will show in a forthcoming article. Neither does it include the huge increase in the EU’s pensions pot in 2019, nor any further increase due to COVID-19 in 2020. We would be very surprised if the eventual bill isn’t much higher.
It is also worth stating that our chart starts at 2021, but of course the UK has ALSO been contributing during the four-and-a-half years since the Referendum.
Isn’t this the kind of information we should all know about?
Yesterday the Daily Express ran an article about our report in its online edition.
We hope they might feel that our follow-up report today will also be of interest to their readers, as well as our final report showing the final expected bill, which we hope to publish in the coming days. That report will also show how the UK had no legal responsibility for any ‘divorce bill’ from the EU at all.
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[ Sources: Office for Budget Responsibility | EU Commission | House of Commons Library ] Politicians and journalists can contact us for details, as ever.
Brexit Facts4EU.Org, Fri 08 Jan 2021
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