52002PC0136(02)

Proposal for a COUNCIL REGULATION introducing special measures to terminate the service of officials of the General Secretariat of the Council of the European Union

(presented by the Commission)

EXPLANATORY MEMORANDUM

The development of the European Union since the Treaty of Maastricht has extended the scope of the Council's activities. It has also led to the creation of specific structures and procedures for implementing the Common European Security and Defence Policy. These changes have increased and reinforced the General Secretariat's tasks, which go beyond those of a Conference Secretariat.

In a note to the permanent representatives dated 18 April 2001, the General Secretariat of the Council set out the adjustment process to be undertaken and the means for achieving it.

In the field of staff policy, as part of the elaboration of an overall strategy for modernising methods and working tools, increasing motivation, providing further training and planning human-resources needs and career prospects, mobility policy and training and information policy will become even more priority actions.

The ongoing acquisition of the most effective new technology, the restructuring of departments, the growth and diversification of the Secretariat's tasks and duties, developments in working methods, the advisability of restoring the balance in the establishment plan and the very wide use of redeployment are all factors which require the Secretariat's human resources to make a constant endeavour to adapt and undergo professional (re)training. However, there are inevitably limits to this process. Some staff are no longer able to successfully acquire the additional and/or more suitable skills needed to perform the new duties and tasks.

The Secretariat therefore considers it necessary to take measures to terminate the service of officials, as put forward in a Commission proposal which is applicable to the Commission's own departments and is currently under examination by the Council bodies. The terms applicable to the termination of service for officials of the Council's General Secretariat will be identical to those applicable to the Commission's staff, and will comply with the principle of budget neutrality.

The number of staff to whom the scheme would apply has been estimated by the General Secretariat of the Council at 94 spread over a period of three years. The purpose of this proposal is therefore to authorise a termination-of-service scheme for 94 officials of the General Secretariat of the Council (12 As, 22 LAs, 8 Bs, 44 Cs, and 8 Ds) between 2002 and 2004

Provided the impact on the budget is neutral, the savings generated by the scheme (the difference between the cost of total remuneration and the cost of the termination-of-service allowance) should allow around 46 new officials to be recruited.

2002/0069 (CNS)

Proposal for a COUNCIL REGULATION introducing special measures to terminate the service of officials of the General Secretariat of the Council of the European Union

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 283 thereof,

Having regard to the proposal made by the Commission after consulting the Staff Regulations Committee in accordance with Article 10a of the Staff Regulations of Officials of the European Communities [1],

[1] Hereinafter called the "Staff Regulations".

Having regard to the opinion of the European Parliament [2],

[2] OJ C [...], [...], p. [...].

Having regard to the opinion of the Court of Justice [3],

[3] OJ C [...], [...], p. [...].

Having regard to the opinion of the Court of Auditors [4],

[4] OJ C [...], [...], p. [...].

Whereas:

(1) The development of the European Union since the Treaty of Maastricht has extended the scope of the Council's activities. These changes have increased and reinforced the General Secretariat's tasks, which go beyond those of a Conference Secretariat.

(2) The General Secretariat of the Council intends to meet a significant part of those needs through internal rationalisation and redeployments.

(3) The General Secretariat of the Council intends to take steps, mainly through training, to help redeployed staff to adjust in the most satisfactory and effective way possible.

(4) However, the skills of some officials, particularly older members of staff, are deemed not to be in line with the duties to be performed.

(5) The General Secretariat of the Council needs new skill profiles and a rebalancing of its establishment plan, but the number of officials retiring in the normal way will not be sufficient to allow the necessary skills to be acquired through recruiting new staff within a satisfactory timescale.

(6) Special measures should accordingly be adopted with regard to termination of service together with internal administrative arrangements for effective monitoring of the implementation of this Regulation.

(7) These measures must be applied as far as possible with due regard for geographical balance, in compliance with the principles governing this Regulation.

(8) These measures must be budget-neutral,

HAS ADOPTED THIS REGULATION:

Article 1

The General Secretariat of the Council is hereby authorised, in the interests of the service and in order to take account of the need to renew skills arising from the refocusing of the use of its resources on priority activities, to adopt measures up to 31 December 2004 for terminating the service within the meaning of Article 47 of the Staff Regulations of officials who have reached the age of 55 and have completed at least 15 years' service, with the exception of those in Grades A1 and A2, under the conditions specified below.

Article 2

The total number of officials to be covered by the measures referred to in Article 1 shall be 94 (12 As, 22 LAs, 8 Bs, 44 Cs, and 8 Ds).

This measure shall be without prejudice to decisions to be taken under the annual budget procedures.

Article 3

Within the ceilings laid down in Article 2, and with due regard to the interests of the service, the General Secretariat of the Council, after having consulted its Joint Committee, shall select from among the officials applying for termination of their service under Article 1 those to whom it wishes to apply this measure.

It shall consider as a priority officials affected by the reorganisation measures and measures for refocusing the use of its resources on priority activities, in particular redeployment, whose skills are deemed not to be in line with the duties to be performed. It shall take account of the amount of training necessary for them to undertake new tasks, their age, ability, performance, conduct in the service, family circumstances and length of service.

Article 4

1. Former officials whose service is terminated under Article 1 shall be entitled to a monthly allowance set as a percentage of the last basic salary received according to age and length of service at the time of departure as shown in the table in Annex I to this Regulation. The last basic salary shall be that for the grade and step held by the official concerned at the time of departure, determined by reference to the table in Article 66 of the Staff Regulations in force on the first day of the month for which the allowance is payable.

2. Such former officials may at any time, at their own request, receive a retirement pension on the terms and conditions laid down in the Staff Regulations. Entitlement to the allowance shall then cease. It shall cease in any event not later than the last day of the month in which the former official concerned reaches the age of 65 years or as soon as he or she is eligible before that age for the maximum retirement pension of 70% (Article 77 of the Staff Regulations).

At that point the former official shall automatically receive a retirement pension, which shall take effect on the first day of the calendar month following the month in which the allowance was paid for the last time.

3. The allowance provided for in paragraph 1 shall be adjusted by the weighting fixed for the country situated inside the Community in which the recipient proves that he is resident. Recipients shall provide evidence each year of their place of residence.

If the recipient resides in a country situated outside the Community, the weighting to be applied to the allowance shall be 100.

The allowance shall be expressed in euro. It shall be paid in the currency of the country of residence of the recipient. However, if it is subject to the weighting of 100 under the second subparagraph, it shall be paid in euro.

An allowance paid in a currency other than euro shall be calculated on the basis of the exchange rates referred to in the second paragraph of Article 63 of the Staff Regulations.

4. Where gross income accruing to the former official from any new employment, when combined with the allowance provided for in paragraph 1, exceeds the total gross remuneration last received by the official or member of the temporary staff concerned, determined by reference to the salary scales in force on the first day of the month for which the allowance is payable, the amount of the excess shall be deducted from that allowance. That remuneration shall be weighted as provided for in paragraph 3.

Gross income and total gross remuneration last received, as referred to above, mean sums paid after deduction of social security contributions but before deduction of tax.

The former official shall give a formal undertaking to provide any written proof which may be required, including an annual statement of income in the form of a salary statement or audited accounts, as appropriate, and a sworn or authenticated declaration that he or she is not in receipt of any other income from any new employment, and shall notify the institution of any other factor which may affect his or her right to the allowance, failing which he or she shall be liable to disciplinary action as provided for in Article 86 of the Staff Regulations.

5. As set out in Article 67 of the Staff Regulations and Articles 1, 2 and 3 of Annex VII thereto, the household allowance, dependent child allowance and education allowance shall be payable either to the recipient of the allowance provided for in paragraph 1 or to the person or persons to whom custody of the child or children has been entrusted by law or by an order of court or of the competent administrative authority; the household allowance shall be calculated by reference to the allowance provided for in paragraph 1.

6. Provided that they are not receiving income from any gainful employment, recipients of the allowance shall be entitled, in respect of themselves and persons covered by their insurance, to benefits under the sickness insurance scheme provided for in Article 72 of the Staff Regulations provided they pay the relevant contribution, calculated on the basis of the allowance provided for in paragraph 1, and are not covered by another sickness insurance scheme by virtue of legal or statutory provisions.

7. During the period for which they are entitled to receive the allowance, but for not more than 65 months, former officials shall continue to acquire further rights to retirement pension based on the salary carried by their grade and step, provided that the contribution provided for in the Staff Regulations by reference to that salary is paid during that period and provided that the total pension does not exceed the maximum specified in the second paragraph of Article 77 of the Staff Regulations. For the purposes of Article 5 of Annex VIII to the Staff Regulations, such period shall be considered to be a period of service.

8. Subject to Articles 1(1) and 22 of Annex VIII to the Staff Regulations, the surviving spouse of a former official who dies while in receipt of the allowance provided for in paragraph 1 shall be entitled, provided that the marriage was contracted at least one year before the former official left the service of the Council, to a survivor's pension equal to 60% of the retirement pension which, irrespective of length of service or age, would have been payable to the former official if he or she had qualified for it at the time of death.

The survivor's pension referred to in the previous subparagraph shall not be less than the amounts specified in the second paragraph of Article 79 of the Staff Regulations. However, in no case may it exceed the amount of the retirement pension to which the former official would have been entitled had he or she survived and been granted a retirement pension when ceasing to be eligible for the allowance referred to above.

The minimum duration of the marriage as referred to in the first subparagraph shall not be taken into account if there are one or more children of a marriage contracted by the official before he or she left the service provided that the surviving spouse maintains or has maintained those children.

Nor shall the duration of the marriage be taken into account if the death of the former official resulted from one of the circumstances referred to at the end of the second paragraph of Article 17 of Annex VIII to the Staff Regulations.

9. On the death of a former official in receipt of the allowance provided for paragraph 1, dependent children within the meaning of Article 2 of Annex VII to the Staff Regulations shall be entitled to an orphan's pension on the conditions set out in the first, second and third paragraphs of Article 80 of the Staff Regulations and in Article 21 of Annex VIII to the Staff Regulations.

Article 5

This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President

ANNEX 1

ALLOWANCE PERCENTAGE

The allowance percentage referred to in Article 4(1) of this Regulation will be determined on the basis of the age and length of service of officials at the time of departure as shown in the table below:

>TABLE POSITION>

Level of allowance depending on age and length of service

Age and length of service will be considered in relation to the actual date of termination of service of the official concerned.

Applying these conditions to the target group of officials on a weighted basis gives a maximum average allowance of 62.5%.

FINANCIAL STATEMENT

1. TITLE OF OPERATION

Termination-of-service allowance under the scheme required to accompany the reform of the Commission

(Council Regulation (ECSC, EC, Euratom) No ....)

2. BUDGET HEADING(S) INVOLVED

A11 staff in active employment

A1218 allowances for staff whose service is terminated

A1230 employer's contribution to the Joint Sickness Insurance Scheme

A1290 weighting for staff whose service is terminated

A1291 adjustments to various allowances

A400 tax proceeds

A401 proceeds of staff contribution to the pension scheme

A403 proceeds of the temporary contribution

3. LEGAL BASIS

Article 283 of the Treaty establishing the European Community

4. DESCRIPTION OF OPERATION

4.1 General objective

The purpose of the operation is to allow 94 officials who are affected by the redeployment of human resources in the General Secretariat of the Council in 2002, 2003 and 2004, and who would not be able to change their career orientation in order to perform new activities, to leave the Commission before the normal retirement age. The departure of these officials should enable new officials to be recruited with the required skills and qualifications.

4.2 Period covered and arrangements for renewal or extension

The 94 officials will depart between 2002 and 2004. The budget impact will mainly cover the years 2002 to 2012. On the basis of the target group described in the Annex to this financial statement, the allowances payable will begin to tail off from 2006, as the former officials reach the normal retirement age and become eligible for retirement pension, and will cease in 2012, the year in which these officials should come under the pension scheme.

5. CLASSIFICATION OF EXPENDITURE OR REVENUE

5.1 CE

5.2 Non-differentiated appropriations

5.3 Type of revenue: deductions from the allowance

6. TYPE OF EXPENDITURE OR REVENUE

Operating budget - administrative expenditure: termination-of-service allowances, contribution to the sickness insurance scheme, deductions from the allowances

7. FINANCIAL IMPACT

The starting point is that the operation should have a neutral effect on the budget. The savings achieved through the departure of 94 officials (the difference between the cost of their remuneration as officials in active employment and the allowance they would receive after leaving the service) could enable 46 new officials to be recruited in categories A/LA, B and C.

Overall, there will be a recovery by the budgetary authority of 48 posts (difference between 94 departures under the scheme and 46 new recruits). In the longer term a saving will begin to be felt from 2006. Between 2006 and 2012 the amount of the allowances will decline gradually as the officials whose service is terminated early come under the retirement pension scheme. The savings generated will be equivalent to 48 posts recovered by the budgetary authority around 2012.

7.1 Method of calculating the total cost of the operation and breakdown by year

See the detailed description in the Annex to this financial statement.

The profile of officials whose service is terminated, the number of departures in 2002, 2003 and 2004, the annual budget cost of an official in active employment, the annual budget cost of an official whose service is terminated, the annual savings arising from termination and the period for which the allowance is payable (before the pension scheme takes over) are shown in the table below:

>TABLE POSITION>

The budget situation, considered over the period for which the allowance is payable to the officials whose service is terminated, is shown in the table below which sets out in successive columns:

- the number of officials whose service is terminated,

- the number of allowances payable,

- the cost of maintaining those officials in active employment,

- the cost of the allowances payable,

- the savings arising from the scheme

>TABLE POSITION>

The average annual budget cost of one new official is EUR71 313 at category A7, EUR49 841 at category B5 and EUR43 248 at C5. The funds available as a result of the departure of 94 officials will therefore enable 46 new officials to be recruited (12 A7 officials, 8 B5 officials and 26 C5 officials), at a total annual budget cost of EUR2 378 918.

>TABLE POSITION>

8. FRAUD PREVENTION MEASURES PLANNED

Not applicable

9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS

See point 7.1

10. ADMINISTRATIVE EXPENDITURE (PART A OF SECTION III OF THE GENERAL BUDGET)

10.1 Impact on the number of jobs

None

10.2 Overall financial impact of additional human resources

None

10.3 Increase in other operating expenditure arising from the operation, in particular costs arising from meetings of committees and expert groups

None

ANNEX TO THE FINANCIAL STATEMENT

BASIS FOR CALCULATING BUDGET NEUTRALITY

This Annex sets out in detail the parameters for calculating the particulars shown in the budget statement. The starting point is that the operation should be budget-neutral. The method of calculation involves determining the savings to be achieved through a termination-of-service scheme for 94 officials (difference between the cost of their remuneration in active employment and the allowance they would receive after leaving the service) and the number of new staff that these savings would allow to be recruited. This approach applies during the period for which the allowance is payable, up to the time the former officials become eligible under the pension scheme.

Parameter 1: Target group

The scheme will apply to 94 members of staff (12 As, 22 LAs, 8 Bs, 44 Cs, and 8 Ds), most of whom will have reached the end of their career bracket ('fin de carrière'). Based on the existing target group of officials, the breakdown would be roughly as follows:

>TABLE POSITION>

Parameter 2 : Average profiles of officials availing themselves of the scheme

The costs are based on the standard profiles below:

A/LA4 profile: A4/2 official, married, with no dependent children, recruited at 32

B1 profile: B1/2 official, married, with no dependent children, recruited at 30

C1 profile: C1/2 official, married, with no dependent children, recruited at 28

D1 profile: D1/2 official, married, with no dependent children, recruited at 30

The average age of the target group is 57.

Parameter 3 : Average profiles of newly recruited officials

Officials availing themselves of the scheme will be replaced by officials in categories A, B and C recruited at the basic grades (A7/3, B5/3 and C5/3 respectively), and presumed to be married with one dependent child.

Parameter 4: Average level of allowance

Applying the conditions set out in Annex 1 to the Regulation on a weighted basis to the existing target group of officials (meeting the criteria for age and length of service) gives an average level of allowance of 62.5%, which is the level used to make the calculations.

Parameter 5: Other assumptions

The level of the expatriation allowance, included in the remuneration of staff in active employment, is estimated at 12% (average of the rates of 0%, 4% and 16% according to individual situations).

The geographical weighting applied to the remuneration of the former officials is estimated at 105 (depending on where they establish residence after leaving the service).

Annual budget savings arising from the scheme

The annual budget cost of individual officials before leaving the service is shown in the table below:

>TABLE POSITION>

Details of the annual budget cost of individual officials after leaving the service are shown in the table below (expenses associated with leaving the service are not additional costs but costs paid in advance and are not included in the calculation):

>TABLE POSITION>

Details of the annual budget savings achieved as a result of the scheme (savings from the departure of one official and total savings) are shown in the table below:

>TABLE POSITION>

The total annual budget saving is EUR2 403 661.

Cost of new posts and recruitment possibilities

Details of the average annual budget cost of one new official are shown in the table below (the career weighting takes account of career advancement during the relevant period; expenses associated with taking up appointment are not included in the calculation):

>TABLE POSITION>

The annual budget cost of recruiting 46 new officials (12 A7, 8 B5, et 26 C5) is equivalent to the total annual budget savings arising from the scheme:

>TABLE POSITION>

The savings arising from the departure of 94 officials under the termination-of-service scheme would mean that 46 new officials could be recruited (12 A7, 8 B5, and 26 C5.