WRITTEN QUESTION P-0624/03

by Robert Evans (PSE) to the Commission

(25 February 2003)

Subject: Aggregation of insurance and Regulation (EEC) 1408/71

Is the Commission aware of the adverse effects many EU citizens are suffering resulting from the German voluntary payment scheme of the 1990s which credited insurance for a period (1939 onwards) often covered by insurance in other countries?

One of my constituents came to the UK in the 1940s and has remained during the last sixty years. He was initially not entitled to a German pension despite insurance payments made during his three-year apprenticeship (1936-1939). When the law was changed in Germany in the 1990s he made his voluntary payment to the German authorities in 1996 and became entitled to a pension payment.

However, the duplication in credits, with the UK insurance taking precedence, has led to payment from the German state which is less than he could have expected otherwise.

It appears that both countries are currently respecting the EU regulations as they stand (Regulation (EEC) 1408/71(1), Implementing Regulation (EEC) 574/72(2) Article 15), and citizens including my constituent are losing out.

Is the Commission aware of this unfortunate situation and are there any plans to provide a resolution?

(1) OJ L 149, 5.7.1971, p. 2.

(2) OJ L 74, 27.3.1972, p. 1.

Answer given by Mrs Diamantopoulou on behalf of the Commission

(24 April 2003)

Regulations (EEC) No 1408/71(1) and (EEC) No 574/72(2) coordinate but do not harmonise Member States' social security schemes so that Member States remain competent to determine the details of their schemes. Although Regulation (EEC) No 1408/71 provides that a person does not have to pay double social security contributions in two different Member States at a time, it also provides that a person may join a voluntary pension insurance in one Member State even if he already has an obligatory pension insurance in another Member State, provided that the legislation of the first Member State allows for such overlapping. Under German legislation a person can make such voluntary contributions if he has already at some point previously contributed compulsorily or voluntarily to this scheme. The Commission is not aware of any changes made in German legislation in this regard in the 1990s.

If voluntary pension contributions overlap with obligatory pension contributions in another Member State, the voluntary contributions are not lost. As a matter of fact, the social security institutions of each country where a worker has been insured are obliged to calculate a national pension and a pro rata pension, to compare the two figures and to grant the migrant worker the amount most favourable to him.

The national pension is the pension calculated in accordance with the national rules only, taking into account solely the periods completed in this country. Therefore periods of voluntary pension contributions are included in this calculation and should in principle increase the amount of the national pension.

In order to determine the proportional or pro rata pension, it is first necessary to calculate the theoretical amount, which takes the whole of a person's working life into account as if the periods spent abroad had been completed in the country in question. Overlapping periods are counted only once, and it is in this context that Article 15 of Regulation (EEC) No 574/72 stipulates that periods of compulsory insurance in one Member State take precedence over periods of voluntary insurance in another Member State. The pro rata pension is then obtained by multiplying this theoretical amount by a fraction whose numerator represents the duration of the periods of work in the country and denominator all the periods taken into account in determining the theoretical amount.

As these provisions therefore ensure that voluntary pension contributions are not lost, the Commission wonder why the constituent to whose case the Honourable Member was referring would actually even receive a lower German pension because of the voluntary contributions. If the Honourable Member has more detailed information on the specific case, he is invited to send them to the Commission to be examined by its services.

(1) Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community.

(2) Regulation (EEC) No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons and their families moving within the Community.