Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
OFFICIALS - PENSIONS - PENSION RIGHTS ACQUIRED BEFORE ENTRY INTO THE SERVICE OF THE COMMUNITIES - TRANSFER TO COMMUNITY SYSTEM - DETAILED RULES - ' ' ACTUARIAL EQUIVALENT ' ' - ' ' SUMS REPAID ' ' - CONCEPTS
( STAFF REGULATIONS OF OFFICIALS , ANNEX VIII , ART . 11(2 ))
Summary
THE PURPOSE OF CALCULATING THE ACTUARIAL EQUIVALENT IN PURSUANCE OF ARTICLE 11 ( 2 ) OF ANNEX VIII TO THE STAFF REGULATIONS OF OFFICIALS FOR THE TRANSFER OF PENSION RIGHTS ACQUIRED UNDER NATIONAL SCHEMES IS TO CAPITALIZE THE VALUE OF A FUTURE CONTINGENT PERIODIC BENEFIT . THE CALCULATION IS THEREFORE BASED ON A CALCULATION OF THE CAPITAL CORRESPONDING TO THE PENSION TO WHICH THE PERSON CONCERNED WILL BE ENTITLED AT NATIONAL LEVEL BY THE APPLICATION OF A DISCOUNT RATE BY REASON OF THE ANTICIPATED NATURE OF THE PAYMENT AS COMPARED WITH THE DUE DATE , TOGETHER WITH A REDUCTION COEFFICIENT PROPORTIONATE TO THE RISK OF THE DEATH OF THE RECIPIENT BEFORE THE DUE DATE , DETERMINED AS A FUNCTION OF THE AGE OF THE INSURED AND OF DEATH RATES , BOTH FACTORS BEING CALCULATED ON THE BASIS OF THE TIME DUE TO ELAPSE BETWEEN THE DATE OF THE AWARD OF THE ACTUARIAL EQUIVALENT AND THAT OF THE GRANT OF THE PENSION .
THE CALCULATION OF THE SUMS REPAID ON THE OTHER HAND MAY BE EFFECTED IN CONTRIBUTORY INSURANCE SCHEMES BY ADDING UP THE CONTRIBUTIONS PAID BY THE INSURED PERSON , TOGETHER , WHERE APPROPRIATE , WITH THOSE PAID BY HIS EMPLOYER ; INTEREST MAY BE ADDED TO THESE CONTRIBUTIONS .
Parties
IN CASE 212/81
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE COUR DE CASSATION ( COURT OF CASSATION ) OF THE GRAND DUCHY OF LUXEMBOURG FOR A PRELIMINARY RULING IN THE CASE PENDING BEFORE THAT COURT BETWEEN
CAISSE DE PENSION EMPLOYES PRIVES ( PENSION FUND FOR CLERICAL STAFF IN THE PRIVATE SECTOR )
AND
LEON BODSON
Subject of the case
ON THE INTERPRETATION OF ARTICLE 11 ( 2 ) OF ANNEX VIII TO THE STAFF REGULATIONS OF OFFICIALS OF THE EUROPEAN COMMUNITIES ON THE TRANSFER TO THE PENSION SCHEME OF THE EUROPEAN COMMUNITIES OF PENSION RIGHTS ACQUIRED UNDER THE PENSION FUNDS OF A MEMBER STATE ,
Grounds
1 BY JUDGMENT OF 25 JUNE 1981 , RECEIVED AT THE COURT ON 20 JULY 1981 THE COUR DE CASSATION OF THE GRAND DUCHY OF LUXEMBOURG REFERRED TO THE COURT FOR A PRELIMINARY RULING IN PURSUANCE OF ARTICLE 177 OF THE EEC TREATY A QUESTION RELATING TO THE INTERPRETATION OF ARTICLE 11 ( 2 ) OF ANNEX VIII TO THE STAFF REGULATIONS OF OFFICIALS OF THE EUROPEAN COMMUNITIES ASKING WHETHER THE AMOUNT OF THE CONTRIBUTIONS ( THOSE OF THE EMPLOYER AND THOSE OF THE INSURED PERSON ) ACTUALLY PAID TO A NATIONAL PENSION SCHEME ( CONTRIBUTORY SCHEME ) OR NOTIONALLY CALCULATED ( NON-CONTRIBUTORY SCHEME ) OR BOTH , TOGETHER WITH INTEREST CALCULATED AT THE RATE OF 4% PER ANNUM FROM 31 DECEMBER OF EACH YEAR OF AFFILIATION CAN CONSTITUTE , WITHIN THE MEANING OF THE ABOVE-MENTIONED PROVISION , EITHER THE ACTUARIAL EQUIVALENT OF RETIREMENT PENSION RIGHTS ACQUIRED IN THE ORGANIZATION TO WHICH HE BELONGED OR THE SUMS TO BE REPAID BY THE PENSION FUND OF THAT ORGANIZATION AT THE DATE OF HIS DEPARTURE .
2 THAT QUESTION WAS RAISED IN THE COURSE OF A DISPUTE BETWEEN THE CAISSE DE PENSION DES EMPLOYES PRIVES ( PENSION FUND FOR CLERICAL STAFF IN THE PRIVATE SECTOR ), LUXEMBOURG , HEREINAFTER REFERRED TO AS ' ' THE FUND ' ' , AND LEON BODSON WHO , AFTER BEING ENGAGED IN THE PRIVATE SECTOR AS A CLERK IN LUXEMBOURG , BECAME AN OFFICIAL OF THE EUROPEAN PARLIAMENT AND REQUESTED THE FUND TO TRANSFER TO THE COMMUNITY PENSION SCHEME THE ACTUARIAL EQUIVALENT OF HIS RETIREMENT PENSION RIGHTS ACQUIRED UNDER THE NATIONAL INSURANCE SCHEME .
3 THE FUND REFUSED AND MR BODSON THEN BROUGHT THE MATTER BEFORE THE CONSEIL ARBITRAL DES ASSURANCES SOCIALES ( ARBITRAL COUNCIL OF SOCIAL INSURANCE ), HEREINAFTER REFERRED TO AS ' ' THE ARBITRAL COUNCIL ' ' , WHICH ALSO REJECTED HIS APPLICATION . MR BODSON THEREUPON APPEALED TO THE CONSEIL SUPERIEUR DES ASSURANCES SOCIALES ( SUPREME COUNCIL OF SOCIAL INSURANCE ), HEREINAFTER REFERRED TO AS ' ' THE SUPREME COUNCIL ' ' , WHICH , BY A DECISION OF 1 DECEMBER 1977 , RECOGNIZED HIS RIGHT TO THE TRANSFER OF THE ACTUARIAL EQUIVALENT WHICH HE HAD REQUESTED , ON THE GROUND THAT IT WAS FOR THE PERSON CONCERNED TO EXERCISE THE CHOICE MADE AVAILABLE TO HIM BY ARTICLE 11 ( 2 ) OF ANNEX VIII TO THE STAFF REGULATIONS OF OFFICIALS .
4 BY A DECISION OF 17 JULY 1979 THE FUND DETERMINED THE AMOUNT OF THE ACQUIRED PENSION RIGHTS TO BE TRANSFERRED , APPLYING THE SYSTEM LAID DOWN BY ARTICLE 18 OF THE LUXEMBOURG LAW OF 19 DECEMBER 1963 ON THE COORDINATION OF PENSION SCHEMES , AS AMENDED BY THE LAW OF 14 MARCH 1979 , WHICH PROVIDES THAT COMMUNITY AND INTERNATIONAL OFFICIALS MAY TRANSFER AN AMOUNT CORRESPONDING TO THE SUM OF CONTRIBUTIONS PAID BY BOTH THE PERSON INSURED AND THE EMPLOYER , PLUS INTEREST OF 4% PER ANNUM FROM 31 DECEMBER OF EACH YEAR OF AFFILIATION , THE CONCEPT OF ' ' ACTUARIAL EQUIVALENT OF RETIREMENT PENSION RIGHTS ' ' BEING UNKNOWN TO LUXEMBOURG LEGISLATION .
5 THAT DECISION WAS QUASHED BY THE ARBITRAL COUNCIL BY JUDGMENT OF 28 NOVEMBER 1979 , UPON APPLICATION BY MR BODSON , ON THE GROUND THAT IT WAS CONTRARY TO THE JUDGMENT OF THE SUPREME COUNCIL OF 1 DECEMBER 1977 . SUBSEQUENTLY , BY JUDGMENT OF 17 JULY 1980 , THE SUPREME COUNCIL DISMISSED AN APPEAL BY THE FUND , WHICH THEN APPEALED TO THE COUR DE CASSATION .
6 THOSE WERE THE CIRCUMSTANCES IN WHICH THE COUR DE CASSATION REFERRED THE FOLLOWING QUESTION TO THE COURT OF JUSTICE :
' ' IS ARTICLE 11 ( 2 ) OF ANNEX VIII TO THE STAFF REGULATIONS OF OFFICIALS OF THE EUROPEAN COMMUNITIES TO BE INTERPRETED AS MEANING THAT EITHER THE ACTUARIAL EQUIVALENT OF RETIREMENT PENSION RIGHTS ACQUIRED OR THE SUMS REPAID FROM THE PENSION FUND MAY BE MADE UP OF THE AMOUNT OF THE CONTRIBUTIONS ( PARTLY THOSE OF THE EMPLOYER AND PARTLY THOSE OF THE INSURED PERSON ) ACTUALLY PAID TO A NATIONAL PENSION SCHEME ( CONTRIBUTORY SCHEME ) AND/OR NOTIONALLY CALCULATED ( NON-CONTRIBUTORY SCHEME ) TOGETHER WITH INTEREST CALCULATED AT THE RATE OF 4% PER ANNUM FROM 31 DECEMBER OF EACH YEAR OF AFFILIATION?
' '
7 THE PURPOSE OF CALCULATING THE ACTUARIAL EQUIVALENT IN PURSUANCE OF ARTICLE 11 ( 2 ) OF ANNEX VIII TO THE STAFF REGULATIONS OF OFFICIALS FOR THE TRANSFER OF PENSION RIGHTS ACQUIRED UNDER NATIONAL SCHEMES IS TO CAPITALIZE THE VALUE OF A FUTURE CONTINGENT PERIODIC BENEFIT . THE CALCULATION IS THEREFORE BASED ON A CALCULATION OF THE CAPITAL CORRESPONDING TO THE PENSION TO WHICH THE PERSON CONCERNED WILL BE ENTITLED AT NATIONAL LEVEL BY THE APPLICATION OF A DISCOUNT RATE BY REASON OF THE ANTICIPATED NATURE OF THE PAYMENT AS COMPARED WITH THE DUE DATE , TOGETHER WITH A REDUCTION COEFFICIENT PROPORTIONATE TO THE RISK OF THE DEATH OF THE RECIPIENT BEFORE THE DUE DATE , DETERMINED AS A FUNCTION OF THE AGE OF THE INSURED AND OF DEATH RATES , BOTH FACTORS BEING CALCULATED ON THE BASIS OF THE TIME DUE TO ELAPSE BETWEEN THE DATE OF THE AWARD OF THE ACTUARIAL EQUIVALENT AND THAT OF THE GRANT OF THE PENSION .
8 THE CALCULATION OF THE SUMS REPAID ON THE OTHER HAND MAY BE EFFECTED IN CONTRIBUTORY INSURANCE SCHEMES BY ADDING UP THE CONTRIBUTIONS PAID BY THE INSURED PERSON , TOGETHER , WHERE APPROPRIATE , WITH THOSE PAID BY HIS EMPLOYER ; INTEREST MAY BE ADDED TO THESE CONTRIBUTIONS .
9 IT FOLLOWS THAT THE NATIONAL SCHEME DESCRIBED IN THE QUESTION PUT BY THE COURT OF REFERENCE , WHICH IS CHARACTERIZED BY THE LACK OF ANY PROVISION FOR CALCULATING THE PENSION TO BE PAID WHEN IT FALLS LEGALLY DUE OR BY THE LACK OF ANY PROVISION FOR CAPITALIZING THE PENSION ITSELF IN THE CIRCUMSTANCES DESCRIBED ABOVE , CANNOT CONSTITUTE A SYSTEM FOR CALCULATING THE ACTUARIAL EQUIVALENT OF THE RIGHTS TO RETIREMENT PENSION ACQUIRED BY THE PERSON CONCERNED UNDER THE NATIONAL SCHEME .
10 ON THE OTHER HAND THE NATIONAL SCHEME DESCRIBED ABOVE MAY BE DESCRIBED AS A SYSTEM FOR CALCULATING THE SUMS REPAID .
11 THE QUESTION RAISED BY THE COUR DE CASSATION OF THE GRAND DUCHY OF LUXEMBOURG SHOULD THEREFORE BE ANSWERED AS FOLLOWS :
THE SUM OF THE CONTRIBUTIONS PAID BY AN INSURED WORKER AND BY HIS EMPLOYER TO A NATIONAL PENSION SCHEME , TOGETHER WITH INTEREST CALCULATED AT THE RATE OF 4% PER ANNUM , DOES NOT CONSTITUTE THE ACTUARIAL EQUIVALENT OF THE RETIREMENT PENSION RIGHTS ACQUIRED BY THAT WORKER WITHIN THE MEANING OF ARTICLE 11 ( 2 ) OF ANNEX VIII TO THE STAFF REGULATIONS OF OFFICIALS OF THE EUROPEAN COMMUNITIES . THAT AMOUNT MAY CONSTITUTE THE SUMS REPAID FOR THE PURPOSES OF THAT PROVISION .
Decision on costs
COSTS
12 THE COSTS INCURRED BY THE GOVERNMENT OF LUXEMBOURG AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE PROCEEDINGS PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .
Operative part
ON THOSE GROUNDS ,
THE COURT ( SECOND CHAMBER ),
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE COUR DE CASSATION OF THE GRAND DUCHY OF LUXEMBOURG BY JUDGMENT OF 25 JUNE 1981 , HEREBY RULES :
THE SUM OF THE CONTRIBUTIONS PAID BY AN INSURED WORKER AND BY HIS EMPLOYER TO A NATIONAL PENSION SCHEME , TOGETHER WITH INTEREST CALCULATED AT THE RATE OF 4% PER ANNUM , DOES NOT CONSTITUTE THE ACTUARIAL EQUIVALENT OF THE RETIREMENT PENSION RIGHTS ACQUIRED BY THAT WORKER WITHIN THE MEANING OF ARTICLE 11 ( 2 ) OF ANNEX VIII TO THE STAFF REGULATIONS OF OFFICIALS OF THE EUROPEAN COMMUNITIES . THAT AMOUNT MAY CONSTITUTE THE SUMS REPAID FOR THE PURPOSES OF THAT PROVISION .
Full & Egal Universal Law Academy