xxDoc. 8313

8 February 1999

Council of Europe pension scheme and sickness insurance arrangements

Reply from the Committee of Ministers

to Written Question No. 363

by Mr Cunliffe

I.       Written Question No. 363 (25 January 1999)

      Mr Cunliffe,

      Considering the question put by Sir Keith Speed to the Chairman of the Committee of Ministers at the last part-session (September 1995) concerning the Council of Europe pension scheme and sickness insurance arrangements and the use that could be made of the considerable savings which would accrue to the member governments as a result of a change in the sickness insurance arrangements for the permanent staff;

      Considering the reply then given by the Chairman of the Committee of Ministers that the matter would be examined by the Deputies;

      Considering that procrastination on this issue is prejudicial to the interests of the member governments as well as to the interests of the Council of Europe and its staff,

      To ask the Committee of Ministers,

      What action the Deputies have taken on these matters since the last part-session of the Assembly and what steps are planned to ensure that a solution is found which is in the best interests of the member governments and organisation.

II.       Reply from the Committee of Ministers (19 January 1999)

The Committee of Ministers is in a position to report major developments in this complex field.

In autumn 1998, the Committee received a new actuarial study on the pensions scheme. This independent study assesses the long-term financial burden (up to 2078) of the scheme. It gives indications of the budgetary impact of the present system of financing and puts forward two alternative funding methods relying to a greater or lesser extent on a reserve fund.

Starting at the end of January 1999 the Budget Committee, at the request of the Committee of Ministers, will be considering the administrative and financial aspects of the possible establishment of a fund on the basis of this study and the Secretary General's proposals, taking into account ongoing work within the Co-ordination system concerning the reduction of the costs of the system. The Committee of Ministers has asked the Secretary General to report as soon as possible on various aspects of the creation of a fund, in the light of the Budget Committee's opinion.

It should be pointed out in this connection that a new, entirely private, social protection regime will enter into force on 1 March 1999. It will provide the medical and social cover of all new staff members as well as 62% of the present permanent staff. During the last quarter of 1998, the latter were invited to opt either to join the private system or to remain affiliated to the French Social Security system. The savings for the budget have yet to be quantified. The Secretary General has indicated that, in his view, a large proportion of these savings could serve to compensate much of the cost of setting up a pension fund.