Opinion of the European Central Bank of 21 November 2023 on pension restrictions for officers and employees of the Oesterreichische Nationalbank (CON/2023/37)

OPINION OF THE EUROPEAN CENTRAL BANK of 21 November 2023 on pension restrictions for officers and employees of the Oesterreichische Nationalbank (CON/2023/37) Introduction and legal basis

On 9 November 2023 the European Central Bank (ECB) received a request from the Austrian Ministry of Finance for an opinion on a draft law amending the pension regulations of the Oesterreichische Nationalbank (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of Article 2(1) of Council Decision 98/415/EC , as the draft law relates to the Oesterreichische Nationalbank (OeNB). In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

1. Purpose of the draft law

1.1 The draft law aims to harmonise the pension rules within the OeNB. For this purpose, amendments to the pension rules applicable to one group of employees of the OeNB are proposed, in order to align them with the rules already applicable to other groups of employees of the OeNB. 1.2 The draft law applies to employees falling under Terms of Service III who entered into an employment relationship with the OeNB on or after 1 May 1998 and before 1 January 2007 (hereinafter the ‘affected OeNB employees’). The draft law requires the affected OeNB employees to pay a pension contribution of 3 % of the portion of their monthly remuneration and special payments above the maximum contribution basis applicable under the general Austrian pension system. This pension contribution will increase to 4 % from 1 January 2025 and to 5 % from 1 January 2026. 1.3 Furthermore, the affected OeNB employees are entitled to receive a final pension fund contribution. In this regard, the draft law gradually reduces the calculation basis from the current level of 80 % of the relevant remuneration to 72 % until 2046. Additionally, the draft law gradually increases the calculation period for determining the comparator pension for the affected OeNB employees from the last monthly salary to the average of the last 216 monthly salaries until 2040. Until 2032, the minimum floor of the calculated final pension fund contribution will be gradually reduced to 85 % of a hypothetical comparator pension, which does not take into account the reductions introduced by the draft law. Furthermore, employees are only entitled to receive a final pension fund contribution upon

reaching the minimum age for claiming a corridor pension, which is 62 years of age under the general Austrian pension system. If the final pension fund contribution is due before the respective employee reaches the current standard retirement age under the general Austrian pension system, which is 65 years of age, the respective comparator pension is reduced by certain percentages (between 0.15 % and 0.425 %) for each month of early retirement, up to a maximum reduction of 15.3 %. 1.4 The explanatory memorandum accompanying the draft law refers to the Law on the limitation of salaries of public officials , which reduced emoluments and pension benefits for public office holders, including with respect to OeNB employees falling under Terms of Service I and II. In order to align and harmonise the pension rules applicable to the different employee groups within the OeNB, the draft law proposes the abovementioned amendments in respect of employees falling under Terms of Service III. Furthermore, the explanatory memorandum states that the OeNB should observe the principles of economy, efficiency and expediency in its business operations. The explanatory memorandum also notes that the Austrian Court of Audit, which is the Supreme Audit Institution of the Republic of Austria and is also competent to examine whether the OeNB uses taxpayers’ money in an efficient, effective and economic way, takes the view that the current pension rules under Terms of Service III would not achieve these objectives and has recommended further reforms of these pension rules. Lastly, the explanatory memorandum mentions that the Austrian Constitutional Court has assessed previous interferences with existing employment contracts of the OeNB as a legitimate legislative objective, and notes that the same should apply in relation to Terms of Service III.

2. General observations

The ECB understands that the draft law aims to harmonise the pension rules for officers and employees of the OeNB between the various Terms of Service, on which the ECB has previously opined . The ECB also notes that the measures contemplated in the draft law are strictly limited to reducing pension costs with the objective of reducing public expenditure.

3. Specific observations

Financial independence

3.1 As the draft law applies to and directly affects OeNB’s officers and employees, it should be examined from the perspective of central bank independence requirements . The principle of central bank independence as enshrined in Article 130 of the Treaty prohibits third parties, including the governments of the Member States, from issuing instructions to the national central banks (NCBs) . In addition, the principle of central bank independence means that third parties may not influence,

directly or indirectly, an NCB in the performance of its tasks or as regards its ability to fulfil its mandate both operationally in terms of manpower, and in terms of appropriate financial resources . 3.2 In particular, Member States may not impair an NCB’s ability to employ and retain the qualified staff necessary for the NCB to perform independently the tasks conferred on it by the Treaty and the Statue of the European System of Central Banks and of the European Central Bank. An NCB may not be put into a position where it has limited control or no control over its staff, or where the government of a Member State can influence its policy on staff matters. Amendments that lead to reductions in remuneration for an NCB’s staff should not interfere with that NCB’s powers to administer its own financial resources, including the funds resulting from any reduction in salaries 7 8 that it pays . Autonomy in staff matters extends to issues relating to staff pensions . 3.3 To protect autonomy in staff matters, the ECB has consistently recommended in its previous opinions and in its convergence reports that any amendment to legislation on remuneration for members of an NCB’s decision-making bodies and its employees should be decided in close and effective cooperation with the NCB, taking due account of its views, to ensure the ongoing ability of the NCB to independently carry out its tasks . Accordingly, legislative provisions affecting the remuneration of members of its decision-making bodies and employees should be drafted in close and effective cooperation with the OeNB. 3.4 There are no indications that the measures contemplated will prevent the officers or staff members of the OeNB, or the OeNB as a whole, from carrying out their tasks independently. Furthermore, there are no indications that the draft law will limit the OeNB’s ability to retain qualified staff, or otherwise deprive its decision-making bodies of their powers of internal organisation and control over staff, or interfere with its staff policy (e.g. its ability to increase salaries due to promotions or to recruit new staff). Finally, the ECB understands that the OeNB was involved in the preparation of the draft law and would not object to it.

This opinion will be published on EUR-Lex.

Done at Frankfurt am Main, 21 November 2023.

[signed]

The President of the ECB

Christine LAGARDE