61981C0212
OPINION OF MR ADVOCATE GENERAL CAPOTORTI
DELIVERED ON 18 FEBRUARY 1982 (
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Mr President,
Members of the Court,
1.
In these proceedings for a preliminary ruling the Court is called upon to resolve a further problem concerning the interpretation of Article 11 (2) of Annex VIII to the Staff Regulations of Officials, that is to say a provision which the Court recently had occasion to consider in its judgment of 20 October 1981 in Case 137/80 Commission v Kingdom of Belgium [1981] ECR 2393. The provision in question confers on an official who enters the service of the Communities after leaving other employment the right to pay to the Communities either:
“The actuarial equivalent of retirement pension rights acquired by him in the government administration, national or international organization or undertaking; or
The sums repaid to him from the pension fund of the government administration, organization or undertaking at the date of his leaving its service.”
The Cour de Cassation [Court of Cassation] of the Grand Duchy of Luxembourg has referred the following question to the Court of Justice in the course of proceedings instituted by the Caisse de Pension des Employés Privés [Pension Fund for Clerical Staff in the Private Sector], hereinafter referred to as “the Fund”, against Léon Bodson:
“Is Article 11 (2) of Annex VIII to the Staff Regulations of Officials of the European Communities to be interpreted as meaning thai 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 (noncontributory scheme), together with interest calculated at the rate of 4% per annum from 31 December of each year of affiliation?”
2.
In order to understand the precise circumstances in which this request was made, it is necessary first of all to summarize the facts which gave rise to the proceedings. Léon Bodson, who is a Luxembourg national, after pursuing employment in the private sector in his native country, subsequently became an official of the European Parliament. Pursuant to the abovementioned provision he requested the Fund to transfer to the pension scheme of the Communities the actuarial equivalent of the retirement pension rights which he had acquired under the national insurance scheme. His request was refused by the Fund's Management Committee and he then brought an action before the Conseil Arbitral des Assurances Sociales [Arbitral Council of Social Insurance], which however dismissed the action on the ground that Luxembourg law did not provide for the pavment of the actuarial equivalent of pension rights acquired. Mr Bodson therefore appealed to the Conseil Superieur des Assurances Sociales [Supreme Council of Social Insurance], which by a judgment of 1 December 1977 held that he was entitled to the transfer of the actuarial equivalent. In that regard it should be emphasized that in its judgment the Conseil Supérieur interpreted Article 11 (2) of Annex VIII to the Staff Regulations as conferring upon an official the right to elect to have paid to the Communities either the actuarial equivalent of the retirement pension rights acquired in his previous employment or the sums repaid to him at the date of leaving such employment.
At that juncture it was for the Fund to calculate the amount to be transferred to the Communities on Mr Bodson's behalf in accordance with the abovementioned judgment. However, almost 20 months passed before such a decision was taken. In the meantime the Grand Duchy of Luxembourg, in order to give effect within its own legal order to Article 11 (2) of Annex VIII to the Staff Regulations, enacted the law of 14 March 1979 (which amended Article 18 of the law of 16 December 1963 on the coordination of pension schemes) conferring on Community and international officials the right to the transfer from the Luxembourg pension scheme of an amount equivalent to the sum of the contributions paid both by the insured person and by his employer, together with interest calculated at the rate of 4 % per annum. Pursuant to that provision the Fund's Management Committee, by a decision of 17 July 1979, finally determined the amount of the pension rights acquired by Mr Bodson to be transferred to the pension scheme of the Communities by adding to the total of the contributions paid to the Luxembourg insurance scheme, both by the insured person and by his employer, interest calculated at the rate of 4 % per annum from 31 December of each year of affiliation. In the statement of the reasons on which that decision was based it was asserted in particular that the concept of “actuarial equivalent of retirement pension rights” was unknown to Luxembourg law.
Mr Bodson brought a further action before the Conseil Supérieur des Assurances Sociales, whose judgment had by this time become final. The Conseil Supérieur quashed the Fund's decision and once again remitted the matter to that institution in order that it might, in accordance with the abovementioned judgment of 1 December 1977, “calculate the actuarial equivalent of the retirement pension rights which Mr Bodson had acquired and whose transfer to the European Communities pursuant to Article 11 (2) of Annex VIII to the Staff Regulations of Officials of the European Communities he had requested”.
The Fund appealed against that second judgment of the Conseil Supérieur des Assurances Sociales to the Cour de Cassation [Court of Cassation]. Proceeding on the assumption that the Luxembourg legislation in force complied with the Community obligations, it maintained that the method of calculation provided for by that legislation and applied in its decision of 17 July 1979 could not be regarded as sums repaid (because the latter were defined by the Luxembourg legislation as including solely the contributions paid by the worker) and therefore necessarily represented the other alternative provided for by Article 11 (2), namely the actuarial equivalent. Consequently, the point at issue is in fact whether the Luxembourg transfer rules fall within the ambit of either of the solutions adopted by that provision. It was for that reason that the Cour de Cassation, in the question which it submitted to the Court of Justice for a preliminary ruling, referring in general terms to the characteristics of the transfer rules laid down by the Luxembourg law of 14 March 1979, wished to ascertain whether such a method could be regarded as a transfer of the sums repaid or of the actuarial equivalent of pension rights acquired at national level so as to give effect to either of the alternatives referred to in the relevant Community provision.
3.
In order to reply to the question submitted by the Luxembourg coun it is necessary to interpret the two concepts of “actuarial equivalent of retirement pension rights” and “sums repaid” contained in Article 11 (2). I would observe first that a Community interpretation is cenainly possible, since the concepts have an objective value inasmuch as they are based respectively on actuarial principles and mathematics. It is true that cenain details concerning the application of both methods may vary from State to State, but that is not sufficient reason to hold, as maintained by the Luxembourg Government in this case, that the interpretation of the provision in question is to be left to the individual Member States.
The purpose of calculating the actuarial equivalent of a right to a pecuniary benefit is to capitalize the value of such a future contingent periodic benefit. The method therefore involves the calculation of the capital sum which corresponds to the pension to which the person concerned has become entitled at national level and the application of a discount rate by reason of the anticipated nature of the payment as compared with the due date, that is to say the pensionable age, together with a reduction coefficient proportionate to the risk of death of the recipient before the due date, determined as a function of the age of the insured and of death rates. Both the discount rate and the reduction coefficient are to a large extent proportionate to the period of time remaining between the date on which the actuarial equivalent is awarded and the pensionable age. Consequently, the amount of the actuarial equivalent relating to a given number of insurance periods varies as a function of the official's age, being higher the older he is. In short, therefore, in order to determine the actuarial equivalent it is necessary to perform a calculation of probability together with a discounting operation.
For a further explanation of this matter it may be helpful to refer to the general provisions for giving effect to Article 11 (1) of Annex VIII (in Staff Courier No 77 of 29 July 1969 and the Special Interinstitutional Courier, of 19 October 1977). Article 4 of those provisions, which concerns the transfer of the actuarial equivalent of retirement pension rights where a Community official moves to a national administration (that is to say, the very situation governed by Article'li (1), which is the reverse situation to the one with which the Court is concerned here), lays down the method to be applied for calculating the actuarial equivalent by the institution to which the official belongs at the time when he leaves the service. The method adopted is as follows : the capital value of the pension due to the official at the date of transfer is calculated by reference to the latest mortality tables compiled by the budgetary authorities and by applying a rate of interest of 3.5 % per annum. It is clear that a similar method applies in the case of transfers in the opposite direction, the precise rules applicable being a matter for the national authorities.
The “sums repaid” method is more straightforward and certainly quite different. In contributory insurance schemes it involves adding up the contributions paid by the insured and, where appropriate, by his employer and possibly adding interest. In other schemes, those contributions must first be notionally calculated (by reference to the amount of the pensions in relation to the length of service) and then added up.
4.
A sum determined in the manner described by the court making the reference clearly cannot constitute an actuarial equivalent of the retirement pension rights acquired by the person concerned. In fact, the method involves neither a calculation of the pension which would be due to the person concerned on the legal due date nor a calculation of the capital value of that pension in accordance with the principles which I have stated. However, the calculation described in the question submitted for a preliminary ruling does have the essential characteristics of sums repaid. The contributions paid by the worker and by the employer (or the notional equivalent thereof) are totalled and interest is added. It may seem strange that all the parties to the proceedings before the Luxembourg national courts declared their agreement that the amount which was to be transferred to the Communities on Mr Bodson's behalf under the terms of the abovementioned decision of the Fund of 17 July 1979 (and which, as we know, was determined by the very method described by the Cour de Cassation in its question) did not constitute sums repaid. However, it should be borne in mind that under the Luxembourg pension scheme, before the abovementioned law of 14 March 1979 was enacted and independently of it, sums repaid were confined to the toul of the contributions paid by the insured, whereas the amount proposed by the Fund for the transfer requested by Mr Bodson also includes, as stated above, the contributions paid by the employer and an additional sum representing interest calculated at the rate of 4 %. That form of sums repaid is, however, similar to that provided for by Article 12 of Annex VIII in favour of Community officials whose service terminates before they have become entitled to a retirement pension. For that reason, quite apart from the national provision in question, the amount referred to in the question undoubtedly corresponds to the sums repaid provided for by Article 11 (2) of Annex VIII.
5.
In the written observations which they submitted during the course of these proceedings, the Luxembourg Government and the Commission maintained that in order to fulfil the obligation placed on the Member States by Article 11 (2) it is sufficient that each State should have adopted rules ensuring that national officials are able to transfer their pension rights in one of the two forms. If that were true, the Grand Duchy of Luxembourg, by making provision for a form of sums repaid and one which is moreover more favourable than that previously laid down by its national legislation, would have complied with its Community obligations and would not be required to confer also the right to the transfer of the actuarial equivalent.
I would point out that that particular problem as to the interpretation of Article 11 (2) is not the one on which the Luxembourg Cour de Cassation has requested a preliminary ruling. In my view the Court of Justice should not consider that issue, both because it has not been asked to do so by the national court (with the result that the Member States other than Luxembourg have not had the opportunity to express their views on the matter) and also because in this particular case, as is clear from the grounds of the judgment making the reference, Mr Bodson has already, by virtue of the judgment of the Conseil Supérieur des Assurances Sociales which has become final, gained recognition of his right to obtain the transfer from the Fund to the European Communities of the actuarial equivalent of the pension rights which he has acquired in his country of origin. That court has held therefore, without having recourse to the procedure laid down by Article 177 of the EEC Treary, that it is the official concerned who has the right to choose between the two alternatives provided for by Article 11 (2).
In its observations, the Luxembourg Government also appears to maintain that the abovementioned provision is not directly applicable but presupposes the existence of national provisions laying down suitable criteria and detailed rules for calculating the actuarial equivalent. Where no such provisions exist (as, it is maintained, is the case in Luxembourg) the request of the person concerned cannot in any event be met. With regard to the position under Luxembourg legislation, it is worth while to recall what the law of 27 August 1977 provides in respect of public-sector employment with regard to the position of officials entering the service of international organizations. According to Article 8 (2), the provisions of paragraph (1) of that article, which provide for the repayment of pension rights acquired, are not to preclude the right of the insured person to require the payment to the international institution of the actuarial equivalent of his national pension rights where such a transfer is provided for by the pension scheme of the international institution concerned (Article 13 of the law leaves the detailed rules for the actuarial calculation to be laid down by Grand-Ducal decree). However, in any event, quite apan from those provisions and the possibility of drawing from them criteria and detailed rules tor the actuarial calculation of the pension rights of officials in the private sector who enter the service of the Communities, the fact remains that the question raised by the Luxembourg Government falls outside the ambit of the question submitted for a preliminary ruling and, moreover, appears to be inconsistent with the abovementioned final judgment of the Conseil Supérieur des Assurances Sociales of 1 December 1977. The difficulties which the Luxembourg authorities may encounter in giving effect to that judgment are clearly a matter for the Luxembourg internal legal order. With regard to the interpretation of Community law requested of this Court, I would reiterate my view that it must remain within the confines of the question as worded by the court making the reference.
6.
For the reasons set out above, I propose that the Court should reply as follows to the question referred to it for a preliminary ruling by the Luxembourg Cour de Cassation by its judgment of 25 June 1981 :
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 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. However, that amount does represent sums repaid in respect of those rights for the purpose of that provision.
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