FOURTH SECTION
DECISION
AS TO THE ADMISSIBILITY OF
Application no. 69136/01
by Juhani SAARINEN
against Finland
The European Court of Human Rights (Fourth Section), sitting on 28 January 2003 as a Chamber composed of
SirNicolas Bratza, President,
MrM. Pellonpää,
MrA. Pastor Ridruejo,
MrsV. Strážnická,
MrR. Maruste,
MrS. Pavlovschi,
Mr L. Garlicki, judges,
and Mr M. O’Boyle, Section Registrar,
Having regard to the above application lodged on 6 May 2001,
Having deliberated, decides as follows:
THE FACTS
The applicant, Mr Juhani Saarinen, is a Finnish national, who was born in 1930 and lives in Kotka.
The facts of the case, as submitted by the applicant, may be summarised as follows.
1. Background information about the Finnish pensions system
Until 31 December 1995, at the time of retirement a person was granted, inter alia, (a) an employment pension which was counted on the basis of his or her salary earned prior to the retirement, amounting to a maximum of 66 per cent of that salary, and (b) a national pension’s basic amount (kansaneläkkeen pohjaosa, folkpensionens basdel), if the person was entitled thereto on the basis of his age and/or number of years of employment.
From 1955 to 1957, employees were obliged by law to deposit part of their salaries in individual accounts kept by the Social Insurance Institution for the purpose of accumulating employment pensions for their retirement. From 1957 onwards these contributions were no longer deposited on accounts earmarked for the employees themselves but went into the general pension fund.
The two parts of the pension (the above-mentioned (a) and (b)) were combined together with the result that a pensioner’s employment pension was reduced by the amount of the national pension’s basic amount so that the total amount of the pensions did not exceed the maximum limit of 66 per cent of his salary. The national pension’s basic amount was granted to all persons entitled to it without their requesting it (although it was apparently possible to refuse it), reducing automatically the amount of the employment pension.
In 1995 the National Pension Act was amended as a budgetary savings measure to the effect that, as from 1 January 1996 onwards, the national pension such as the old-age pension was to be replaced by a pension calculated with reference to new criteria. Those whose total income in the form of other pensions and various entitlements exceeded certain ceilings would no longer be entitled to a national pension. In such a case the so-called basic amount of their national pension would be reduced by 20 per cent annually between 1996 and 2001, when payment thereof would cease (Act no. 1491/1995).
Following a public debate on the matter the Finnish Parliament passed a Compensation Act (635/2002) on 18 June 2002, according to which pensioners whose employment pension has been twice reduced on the basis of their national pension’s basic amount, are entitled to receive a compensation for their loss as from 1 October 2003 onwards. The compensatory amount will be between 5 and 50 euros per month, depending on the amount of the pension at issue.
2. The facts of the present case
On 13 March 1990 the applicant was granted an employment pension as from 1 April 1990 onwards. The same day he was also granted, without requesting it, a national pension’s basic amount which was FIM 365 (approximately 61 euros) per month. The two parts of his pension were considered together with the result that his employment pension was reduced by FIM 365 per month, since the total amount of the pensions was not to exceed the maximum limit (66 per cent of the salary on which the pension was based ).
In 1993 the applicant’s pension was changed into an old-age pension.
In 1996, after some index-linked increases had been granted to the applicant’s pension, his national pension’s basic amount was FIM 445 (approximately 75 euros per month). As a result of the entry into force of the Act 1491/1995, the applicant’s national pension’s basic amount was again reduced until it ceased to exist in 2001. The applicant now receives only a pension which is about 60 per cent of the salary on which his pension was originally based.
The applicant has used all domestic remedies (three appeal instances decisions submitted, the final ones given by the Insurance Court in October 2000). According to the decisions of the domestic courts, it is impossible to revoke the reduction of the pensions which is based on the amendment to the National Pension Act as the courts cannot override a law.
As a result of the Compensation Act of 2002, the applicant in the present case will be awarded the full 50 euros per month in compensation for his loss as from 1 October 2003 onwards.
COMPLAINTS
1. The applicant complains, under Article 1 of Protocol No. 1 to the Convention, that he was deprived of his possessions as the so-called basic amount was twice deducted from the amount of his employment pension, first in 1990 and then also in 1996, leaving his employment pension permanently at a lower level. His loss is not fully compensated by the award of 50 euros per month as from 1 October 2003, i.e. seven years later.
2. He also complains under Article 1 of Protocol No. 1, read in conjunction with Article 14 of the Convention, that he was discriminated against on the basis of his status as a pensioner. He emphasises that he never requested to be granted a national pension’s basic amount as it was automatically granted to everyone entitled to an employment pension. However, those who refused the pensions offered to them, have not lost their full pension rights and still receive a pension amounting to 66 per cent of their salaries. Moreover, the amendment of the Act is not applicable to pensioners who have retired on 1 January 1996 or afterwards, since it only affects those who retired in 1995 or earlier.
THE LAW
1. The applicant complains that his right to the peaceful enjoyment of his possessions was violated as he was deprived of part of his pension twice. He emphasises that the compensation to be awarded as from 1 October 2003 onwards is insufficient both in amount and in time. He invokes Article 1 of Protocol No. 1 to the Convention, which reads as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
Article 1 of Protocol No. 1 to the Convention guarantees the right of property. It comprises three rules. The first rule, which is set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property. The second rule, which is set out in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions. The third rule, which is set out in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. The three rules are connected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and are therefore to be construed in the light of the general principle enunciated in the first rule.
The Court recalls that, according to the Convention organs’ established case-law, the right to an old-age pension or related pension benefits is not included as such among the rights and freedoms guaranteed by Article 1 of Protocol No. 1 or any other provisions of the Convention. The Convention organs have nevertheless recognised that payment of contribution to a compulsory pension fund may, at least in certain circumstances, create a property right in a portion of such a fund and that such a right might be affected by the manner in which the fund is distributed (see Aunola v. Finland (dec.), no. 30571/96, ECHR, 15 March 2001, unreported). The Court notes in the present case that the applicant has made contributions to the pension fund to finance his benefits. Thus, the Court accepts that the reductions of the applicant’s pension have affected his property interests protected by Article 1 of Protocol No. 1. Although the contested measures undoubtedly reduced the applicant’s pension rights by depriving him twice of the national pension’s basic amount, the Court considers that in the circumstances of the present case they should be regarded as a control of the use of the applicant’s possessions within the meaning of the second paragraph of that provision.
To be compatible with the second paragraph, such control must be based on “laws” which the State “deems necessary” for the furtherance of “the general interest”. In this case there can be no doubt that the interference with the applicant’s pension rights was based on law, namely the amendment on the National Pension’s Act (1491/1995).
As to the condition of “general interest”, the Court notes that in this respect the Convention leaves a wide margin of appreciation to the national legislator. The Court will respect the legislator’s judgment as to what it deems to be in the general interest unless that judgment be “manifestly without reasonable foundation” (see, mutatis mutandis, the judgment of 21 February 1986 in the case of James and Others v. the United Kingdom, Series A no. 98, § 46). The Finnish Parliament’s opinion that, because of the State’s financial situation, the amendment to the National Pensions Act was in “the general interest” cannot in the Court’s view be considered to transgress the margin of appreciation left to the State in this regard.
Even so, the Court must also satisfy itself that there is a reasonable relationship of proportionality between the means employed and the aim pursued and that a fair balance is struck between the public and private interests involved. In the present case the Court notes that the reduction of the applicant’s pension, although it twice amounted to the national pension’s entire basic amount, nevertheless left some 90 per cent of the applicant’s co-ordinated pension rights intact. This being so, the Court finds that the applicant was not obliged to bear an unreasonable burden within the meaning of its case-law (see, inter alia, the Božidar Janković v. Croatia (dec.), no. 43440/98, ECHR, unreported). The Court also notes that the Compensation Act (635/2002) appears to be applicable to the applicant’s case, albeit with a certain delay.
Considering that the Convention does not guarantee a right to a pension of a certain amount and the State’s margin of appreciation in the field of social and economic law (see, inter alia, the Gascon Moreno v. Spain (dec.), no. 49151/99, ECHR, unreported) there is, in these circumstances, no appearance of a violation of Article 1 of Protocol No. 1.
It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
2. The applicant also complains, under Article 1 of Protocol No. 1 to the Convention read in conjunction with Article 14 of the Convention, that he was discriminated against on the basis of the fact that he retired in 1990. Article 14 of the Convention reads as follows:
“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”
Taking into account what was found above in connection with the complaint made under Article 1 of Protocol No. 1 to the Convention, the Court finds no indication of a difference in treatment in comparison with the other pensioners who retired at the same time as the applicant and with same income.
It follows that this complaint is also manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Michael O’BoyleNicolas Bratza
RegistrarPresident
Full & Egal Universal Law Academy