CELEX: 62018CJ0132
Appeal
Civil service
Pensions
Transfer of pension rights acquired in a national pension scheme to the European Union pension scheme
Deduction of the appreciation between the date of the application for a transfer and the actual date of the transfer

By its appeal, the European Commission requests the Court to set aside the judgment of the General Court of the European Union of 5 December 2017, Tuerck v Commission (
T‑728/16
,
EU:T:2017:865
) (‘the judgment under appeal’), by which that court annulled the Commission Decision of 10 December 2015 confirming the transfer to the European Union pension scheme of pension rights acquired by Ms Sabine Tuerck prior to her entry into the service of the Union (‘the contested decision’).
Legal context
Article 11(2) of Annex VIII to the Staff Regulations of Officials of the European Union (the ‘Staff Regulations’) provides:
‘An official who enters the service of the Union after:
–
leaving the service of a government administration or of a national or international organisation,
or
–
pursuing an activity in an employed or self-employed capacity,
shall be entitled, after establishment but before becoming eligible for payment of a retirement pension …, to have paid to the Union the capital value, updated to the date of the actual transfer, of pension rights acquired by virtue of such service or activities.
In such case the appointing authority of the institution in which the official serves shall, taking into account the official’s basic salary, age and exchange rate at the date of application for a transfer, determine by means of general implementing provisions the number of years of pensionable service with which he shall be credited under the Union pension scheme in respect of the former period of service, on the basis of the capital transferred, after deducting an amount representing capital appreciation between the date of the application for a transfer and the actual date of the transfer.
…’
Article 7 of Commission Decision C(2011) 1278 final of 3 March 2011 on the general implementing provisions for Articles 11 and 12 of Annex VIII to the Staff Regulations (‘the GIP’), provides inter alia:
‘For the purposes of calculating the years of pensionable service to be credited under Article 11(2) and (3) of Annex VIII to the Staff Regulations:
(1)   The number of pensionable years to be taken into account shall be calculated on the basis of the transferable amount of rights acquired [by the applicant official] …, minus the amount of capital appreciation between the date on which the transfer application is registered and the date of the actual transfer.
Where the national or international body is not able to supply the value of the pension rights on the date on which the application is registered, simple interest at the rate [of 3.1%] is to be deducted from the amount transferred for the period from the date on which the application is registered to the date of the actual transfer.
…’
Background to the dispute
Ms Tuerck entered the service of an institution of the European Union on 1 March 2004, after having left her service with a German authority.
On 27 May 2010, she requested the payment, to the EU pension scheme, of the capital value of pension rights she had acquired in accordance with her service prior to entering the service of the European Union, under Article 11(2) of Annex VIII to the Staff Regulations.
On 29 April 2013, the Office for the Administration and Payment of Individual Entitlements (PMO) forwarded that request to the Deutsche Rentenversicherung Bund (federal pension insurance institution, Germany) (‘the DRV’), in its capacity as national institution responsible for the pension scheme in which the pension rights at issue were acquired.
On 5 May 2015, the DRV informed the PMO that, on the date of registration of Ms Tuerck’s request, the amount of transferable capital corresponding to her acquired pension rights was EUR 141 652.07.
On 22 June 2015, the PMO submitted to Ms Tuerck an offer concerning the crediting of additional pensionable years to be taken into account under the EU pension scheme, on the basis of the amount indicated by the DRV, which came to 3 years, 8 months and 29 days. The interested party accepted that offer.
On 10 December 2015, the PMO informed Ms Tuerck of the adoption of the contested decision, by which that offer concerning the crediting of additional pensionable years was finally fixed, in accordance with Article 7 of the GIP, at three years and four months, on the basis of an amount of acquired rights estimated at EUR 126 048.05. That amount was calculated by deducting from the capital transferred by the DRV in the meantime, namely EUR 146 714.33, an amount of EUR 20 666.28 presented as corresponding to the appreciation of the pension rights acquired by Ms Tuerck during the period between the date of registration of her request and the date of the actual transfer of that capital to the EU pension scheme. That deduction was itself obtained by applying to that capital an interest rate of 3.1% per annum during the period at issue.
The procedure before the General Court and the judgment under appeal
By application lodged at the Registry of the General Court on 14 October 2016, Ms Tuerck brought an action for annulment of the contested decision.
In support of her action, she raised two pleas in law, the first alleging infringement of Article 7(1) of the GIP, and the second infringement of Article 11(2) of Annex VIII to the Staff Regulations.
In the judgment under appeal, since the General Court considered that the first plea in law invoked by Ms Tuerck was well founded, it annulled the contested decision, on that ground.
Forms of order sought by the parties before the Court of Justice
By its appeal, the Commission claims that the Court should:
–
set aside the judgment under appeal;
–
give final judgment in the dispute by dismissing the action, and
–
order Ms Tuerck to pay the costs relating to the action at first instance and the appeal.
In her response, Ms Tuerck asks the Court to:
–
dismiss the appeal;
–
in the alternative, in the event that the judgment under appeal is set aside, refer the case back to the General Court for that court to rule on the second plea in law invoked before it, and
–
order the Commission to pay the costs.
The appeal
The Commission raises four grounds in support of its appeal.
The first ground of appeal, alleging an error of law concerning the determination of the entity competent to carry out the deduction of the capital appreciation provided for in Article 11(2) of Annex VIII to the Staff Regulations
Arguments of the parties
The Commission claims that the General Court erred in law by holding, in paragraphs 23 and 24 of the judgment under appeal, that it was not entitled to make any deduction from the amount of the capital which is transferred to it by the national administration, organisation or body concerned (‘the national authority concerned’), in a given case, by the implementation of the mechanism provided for in Article 11(2) of Annex VIII to the Staff Regulations.
That mechanism takes place in two successive stages consisting of, first, the calculation of the updated capital acquired by the applicant official in a national pension scheme and its transfer to the European Union pension scheme, and, second, of the conversion of that capital into annuities to be taken into account in the European Union pension scheme.
It follows from the Court’s case-law that, although the first of those stages is in the sole competence of the national authority concerned, the second is governed by EU law. Moreover, Article 11(2) of Annex VIII to the Staff Regulations provides expressly that, in the context of the second of those stages, the EU institution in which the applicant official is serving is competent to make, from the capital transferred by the national authority concerned, a deduction corresponding to the appreciation of pension rights acquired by the applicant official between the date of the application for the transfer and that of the actual transfer of that capital.
Ms Tuerck disputes the validity of that argument.
Findings of the Court
Article 11(2) of Annex VIII provides, in the first subparagraph thereof, that officials who enter into the service of the European Union after having exercised, inter alia, activities in a national or international administration or organisation are to be entitled, after establishment but before becoming eligible for payment of a retirement pension, to have paid to the Union the capital value, updated to the date of the actual transfer, of pension rights acquired by virtue of such service or activities. The second subparagraph of that provision provides that the EU institution in which the applicant official is serving must make, from the capital transferred, a deduction corresponding to the appreciation of those pension rights between the date of the application for the transfer thereof and that of the actual transfer.
It follows from that provision that, once the national authority concerned has transferred the capital corresponding to the pension rights acquired by the applicant official on the date of his application for transfer, updated on the date of the actual transfer, to the EU institution in which that official is serving, that institution is competent to make, from that capital, a deduction corresponding to the appreciation of those pension rights between the date of the application for the transfer thereof and that of the actual transfer.
It follows that Article 11(2) of Annex VIII to the Staff Regulations does not authorise the institution at issue to make any deductions from the part of that capital which corresponds to the amount of pension rights itself. In that regard, it results from the case-law referred to by the General Court in paragraph 24 of the judgment under appeal, not only that only the national authority concerned is competent to calculate that amount, but also that that amount may not be subsequently amended or contested by the Commission (see, to that effect, judgments of 9 November 1989, Bonazzi-Bertottili v Commission,
75/88, 146/88 and 147/88
, not published,
EU:C:1989:410
, paragraphs
and
, and of 5 December 2013, Časta,
C‑166/12
,
EU:C:2013:792
, paragraphs
and
).
As regards the question whether the General Court misconstrued Article 11(2) of Annex VIII to the Staff Regulations in the judgment under appeal, as the Commission claims, it is necessary to point out that that court did not claim, without distinction, that the Commission could not make any deduction from the amount of capital transferred to it by the national authority concerned. The General Court merely stated, in paragraph 23 of that judgment, that, ‘in a situation where the … national … authorities [concerned] have supplied the [Commission] with the value of the pension rights as at the date of registration of the application, the [latter] is not entitled to make any deduction from that amount and the calculation of years of pensionable service under the Staff Regulations must therefore be made on the basis of the full amount’.
It follows from that that the ‘amount’ from which the Commission cannot make any deduction is not the total amount of the capital transferred by the national authority concerned, but only the amount of the part of that capital corresponding to the pension rights acquired by the applicant official in a national pension scheme on the date his request for transfer was registered.
Moreover, the same paragraph of the judgment under appeal expressly notes that the Commission is, by contrast, competent to make, from the total amount of the capital transferred, a deduction corresponding to the amount of the other part of the capital, consisting of the appreciation of pension rights between the date of registration of the transfer application and that of the actual transfer.
Therefore, the General Court did not err in law in the context of the identification of the body competent to make the deduction of the capital appreciation provided for in Article 11(2) of Annex VIII to the Staff Regulations.
Therefore, the present ground of appeal is unfounded and must therefore be rejected.
The second ground of appeal, alleging an error of law relating to the procedure for deducting the capital appreciation provided for in Article 11(2) of Annex VIII to the Staff Regulations and in Article 7(1) of the GIP
Arguments of the parties
The Commission claims, in the first place, that the General Court erred in law by holding, in paragraphs 23, 31 and 32 of the judgment under appeal, that it is only where it is impossible for the national authority concerned to communicate the amount of pension rights acquired by an official on the date of registration of his transfer application, and not in every situation, that the EU institution in which that official is in service is entitled to make the deduction of the capital appreciation provided for in Article 11(2) of Annex VIII to the Staff Regulations by applying the interest rate of 3.1% referred to by the second subparagraph of Article 7(1) of the GIP.
In the second place, the General Court erred in law by considering, in paragraphs 23, 26 to 28 and 33 of the judgment under appeal, that such a deduction must be made by taking as a base the ‘transferable’ capital representing the pension rights acquired by that official on the date of registration of his transfer application. Article 11(2) of Annex VIII to the Staff Regulations clearly states that that deduction must be made on the basis of the capital ‘transferred’ by the national authority concerned.
Ms Tuerck disputes the validity of that argument.
Findings of the Court
As regards, in the first place, the argument alleging an error of law set out in paragraph 28 of the present judgment, it should be noted that Article 7(1) of the GIP states, in the first subparagraph thereof, that the deduction to be made from the capital transferred by the national authority concerned must correspond to the amount representing that capital appreciation between the date of the request for that transfer and the actual transfer, before stating, in the second subparagraph thereof, that, where the national body concerned is not able to communicate the amount of the pension rights acquired by the applicant official on the date on which his request for transfer is registered, such a deduction is made by applying an interest rate of 3.1% to the capital transferred, for the period from that date to the date of the actual transfer.
It is clearly apparent from that wording that, although it is for the Commission to determine, in a given case, whether it was impossible for the national authority concerned to communicate to it the amount of pension rights acquired by the applicant official on the date of registration of his transfer application, it is only in the case where that institution reaches a positive conclusion in that regard that it is entitled to make the deduction provided for by applying a standard interest rate of 3.1%.
Therefore, the argument alleging an error of law set out in paragraph 28 of the present judgment is unfounded.
As regards, in the second place, the argument alleging an error of law mentioned in paragraph 29 of the present judgment, it must be pointed out at the outset that, according to Article 11(2) of Annex VIII to the Staff Regulations, the deduction mentioned in that provision must be made by taking as a base the amount of the capital transferred by the national authority concerned, as is stated in paragraph 20 of the present judgment and as the Commission correctly notes.
That being so, it must be noted that, in paragraph 23 of the judgment under appeal, the General Court refers to the capital ‘transferable’ on the date of registration of the transfer application as the base to use, not for the purposes of such a deduction, but in order to calculate annuities to be taken into account in the EU pension scheme, in accordance with the rights acquired by the applicant official in his national pension scheme. Moreover, the General Court points out, in paragraphs 26 to 28 and 33 of the judgment under appeal, that that calculation is provisional.
Consequently, the Commission was wrong to complain that the General Court considered that the deduction of the capital appreciation provided for in Article 11(2) of Annex VIII to the Staff Regulations had to be made by taking the ‘transferable’ capital as a base.
Moreover, the use of ‘transferable’ capital as a base for calculating annuities to be taken into account in the EU pension scheme is expressly provided for in the first subparagraph of Article 7(1) of the GIP, as was noted in paragraph 21 of the judgment under appeal.
It follows that the argument alleging an error of law set out in paragraph 29 of the present judgment is unfounded.
Since none of the errors of law invoked by the Commission in the context of the present ground has therefore been established, that ground must be rejected in its entirety as unfounded.
The third ground of appeal, alleging an error of law relating to the incompatibility of the General Court’s interpretation of Article 7(1) of the GIP with Article 11(2) of Annex VIII to the Staff Regulations, infringement of the obligation to state reasons and an error of law relating to the analysis of the present case
Arguments of the parties
In its appeal, the Commission maintains, in the first place, that the General Court erred in law, in paragraphs 23, 31 and 32 of the judgment under appeal, by interpreting Article 7(1) of the GIP so that the interest rate of 3.1% to which that provision refers is applicable only in the case where it is impossible for the national authority concerned to communicate to it the amount of the pension rights acquired by the applicant official on the date of registration of his transfer application, in the light of the incompatibility of that interpretation with Article 11(2) of Annex VIII to the Staff Regulations, which that provision is designed to implement.
In the second place, the General Court infringed its obligation to state reasons, in paragraphs 26 to 30 and 33 of the judgment under appeal, by explaining that, in this case, it was not impossible for the DRV to communicate to the Commission the amount of the pension rights acquired by Ms Tuerck on the date of registration of her transfer application, without however providing sufficient explanations in that regard.
In its reply, the Commission adds, in that regard, that the General Court was not justified in relying on the agreement it concluded with the Federal Republic of Germany in 1994, contrary to what is stated in paragraph 33 of the judgment under appeal. That agreement expired before the adoption of the contested decision.
Ms Tuerck contests the entirety of that argument.
Findings of the Court
As regards, in the first place, the argument alleging an error of law set out in paragraph 40 of the present judgment, it should be noted that Article 11(2) of Annex VIII to the Staff Regulations does not itself define the modalities for implementation of the deduction rule which it sets out, but provides, in that regard, for the adoption of general implementing provisions by each EU institution.
Article 7(1) of the GIP aims to make provision for those modalities for implementation as regards the Commission.
In those circumstances, the interpretation of Article 7(1) of the GIP undertaken by the General Court in paragraphs 23, 31 and 32 of the judgment under appeal can be regarded as incompatible with Article 11(2) of Annex VIII to the Staff Regulations only if that interpretation was such as to impede or, at least, to make more difficult the implementation of the deduction rule provided for in Article 11.
The application of the interest rate of 3.1% referred to in the second subparagraph of Article 7(1) of the GIP is precisely such as to allow the Commission to overcome the obstacle created by the situation in which it is impossible for the national authority concerned to communicate to it the amount of the pension rights acquired by the applicant official on the date of registration of his transfer application. In the absence of that provision, the Commission could not, in such a situation, perform the obligation imposed on it in accordance with Article 11(2) of Annex VIII to the Staff Regulations.
Therefore, it cannot be held that the General Court interpreted Article 7(1) of the GIP in a manner incompatible with Article 11(2) of Annex VIII to the Staff Regulations.
As regards, in the second place, the argument alleging an infringement of the obligation to state reasons and included in paragraph 41 of the present judgment, it must be noted that the Commission never justified the contested decision, before the General Court or even before the Court of Justice, by the circumstance that it was impossible for the DRV to communicate to it the amount of the pension rights acquired by Ms Tuerck. Its position, as is apparent from paragraphs 18 and 32 of the judgment under appeal, which has not been contested in the context of the appeal, consisted in claiming that the rate of 3.1% referred to in the second subparagraph of Article 7(1) of the GIP had to be applied, in general, in all procedures for the transfer of pension rights and, more specifically, in the present case.
Since the Commission maintained, before the General Court, that the rate at issue applied in all circumstances, and therefore, implicitly but necessarily, that the condition of failure to communicate information set out in the second subparagraph of Article 7(1) of the GIP was not relevant in that regard, it is not justified in complaining that the General Court gave insufficient reasons for its examination of compliance, in the present case, with such a condition
In any event, it must be noted that the judgment under appeal is adequately reasoned with respect to that question. The General Court set out in detail, in paragraphs 26 to 30 of that judgment, that it was not impossible for the DRV to communicate to the Commission the amount of the pension rights acquired by Ms Tuerck on the date of registration of her transfer application, but instead sent it information relating both to that amount and to the amount of the appreciation of the rights of the interested person between that date and that of the actual transfer of the capital. The General Court also explained, in paragraph 33 of that judgment, the reasons leading it to consider that information to be precise and reliable.
As regards, in the third and last place, the argument set out in paragraph 42 of the present judgment, by which the Commission questions the validity of paragraph 33 of the judgment under appeal, it must be noted that, in accordance with Article 127(1) of the Rules of Procedure of the Court, no new plea in law may be introduced in the course of the proceedings, unless those pleas were based on matters of law or of fact which come to light in the course of the procedure.
For that reason, such grounds must, in accordance with the Court’s settled case-law, be rejected as inadmissible, except where they constitute the amplification of the grounds set out in the application initiating proceedings and where they are closely linked with the latter (judgment of 20 December 2017, Spain v Council,
C‑521/15
,
EU:C:2017:982
, paragraph
and the case-law cited).
In the present case, the Commission bases its argument on the wording itself of the judgment under appeal, and not on legal and factual elements which came to light during the proceedings before the Court.
Moreover, that argument cannot be regarded as either constituting an amplification of that alleging an infringement of the obligation to state reasons which appeared in the appeal or as presenting a close link with the latter.
As is apparent from the settled case-law, calling into question the statement of reasons for an act, which is concerned with infringement of essential procedural requirements, and the contestation of the merits of that act, which to its substantive legality, constitute two distinct grounds which may be relied on in the context of an action for annulment or an appeal (judgments of 2 April 1998, Commission v Sytraval and Brink’s France,
C‑367/95 P
,
EU:C:1998:154
, paragraph
, and of 28 July 2011, Mediaset v Commission,
C‑403/10 P
, not published,
EU:C:2011:533
, paragraph
).
Therefore, that argument is inadmissible.
Consequently, the present ground of appeal must be rejected as being in part unfounded and in part inadmissible.
The fourth ground of appeal, alleging, first, an error of law and, secondly, infringement of the obligation to state reasons in so far as the General Court found the existence of unjust enrichment
Arguments of the parties
The Commission claims that the General Court erred in law by concluding, in paragraph 32 of the judgment under appeal, that allowing it to make a deduction by applying an interest rate to the capital transferred by the national authority concerned would give rise to unjust enrichment, to the detriment of the applicant official. It is, contrary to what was held by the General Court, the application of the deduction provided for in Article 11(2) of Annex VIII to the Staff Regulations which seeks to avoid unjust enrichment in favour of the official concerned, by guaranteeing that the transfer of pension rights acquired in a national pension scheme to the EU pension scheme relates solely to the amount of the pension rights acquired by the interested party on the date of registration of his transfer application, excluding the amount of the appreciation of those rights between that date and that of the actual transfer of that capital.
Moreover, as regards the reasoning of the judgment under appeal, the General Court did not respond to the Commission’s argument that the amount in excess of the application of the interest rate of 3.1% referred to in Article 7(1) of the GIP is reimbursed, in each particular case, to the applicant official.
Ms Tuerck disputes the validity of that argument.
Findings of the Court
As regards, in the first place, the argument alleging an error of law referred to in paragraph 59 of the present judgment, it should be noted that the General Court considered, in paragraph 32 of the judgment under appeal, that allowing the Commission to make the deduction provided for in Article 11(2) of Annex VIII to the Staff Regulations by applying an interest rate to the capital transferred by the national authority concerned was liable to give rise to unjust enrichment, to the detriment of the applicant official, in the event, such as in the present case, that the Commission is provided with the exact amount of the interested party’s pension rights and it is thus in a position to proceed under the first subparagraph of Article 7(1) of the GIP.
Even if the application of the standard interest rate does not, in such a situation, automatically result in unjust enrichment, it nevertheless has the inherent consequence of creating a risk of unjust enrichment, in so far as it is possible that it will lead the Commission to make, from the capital transferred by the national authority concerned, a deduction of an amount greater than the actual appreciation of the pension rights acquired by the applicant official and thereby to appropriate a part of those pension rights.
In the light of the existence of such a risk, it cannot be concluded that the General Court erred in law by expressing the conclusion referred to in paragraph 59 of the present judgment.
As regards, in the second place, the argument alleging infringement of the obligation to state reasons set out in paragraph 60 of the present judgment, it must be noted that it is settled case-law that that obligation requires the General Court not to respond to each of the parties’ arguments, but only to give reasons for its decision in a way that enables those parties to know the reasons justifying them and the Court to exercise its power of review in the event of an appeal (judgments of 9 September 2008, FIAMM and Others v Council and Commission,
C‑120/06 P and C‑121/06 P
,
EU:C:2008:476
, paragraph
, and of 6 September 2012, Prezes Urzędu Komunikacji Elektronicznej v Commission,
C‑422/11 P and C‑423/11 P
,
EU:C:2012:553
, paragraph
).
In the present case, the situation of unjust enrichment envisaged by the General Court implies, as is apparent from paragraph 63 of the present judgment, that the actual amount of the appreciation of the pension rights acquired by a given official is lower than the amount resulting from the application of the standard interest rate of 3.1% intended by the Commission.
That institution’s argument refers to the opposite situation, in which the amount received exceeds the application of that interest rate, and thus has no connection with the reasoning of the General Court. Therefore, it cannot be complained that the General Court failed to take a position on that argument.
Therefore, the present ground of appeal must be rejected as unfounded.
Consequently, the appeal must be dismissed in its entirety.
Costs
Under Article 138(1) of the Rules of Procedure, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
In the present case, since the Commission has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by Ms Tuerck.

On those grounds, the Court (Eighth Chamber) hereby:

1.
Dismisses the appeal;

2.
Orders the European Commission to pay the costs.

[Signatures]
(
*1
)	Language of the case: French.