JUDGMENT OF THE EUROPEAN UNION CIVIL SERVICE TRIBUNAL (Full Court)
11 December 2013 (*)
(Civil service — Officials — Pensions — Transfer of pension rights acquired under a national pension scheme — Regulation adjusting the rate of contribution to the European Union pension scheme — Adjustment of actuarial values — Need to adopt general implementing provisions — Temporal application of the new general implementing provisions — Withdrawal of a proposal concerning additional pensionable years — Lawfulness — Conditions)
In Case F‑130/11,
ACTION brought under Article 270 TFEU, applicable to the EAEC Treaty pursuant to Article 106a thereof,
Marco Verile, official of the European Commission, residing in Cadrezzate (Italy),
Anduela Gjergji, member of the contract staff of the Trans-European Transport Network Executive Agency, residing in Brussels (Belgium),
represented by D. Abreu Caldas, A. Coolen, J.-N. Louis, É. Marchal and S. Orlandi, lawyers,
applicants,
v
European Commission, represented by D. Martin and J. Baquero Cruz, acting as Agents,
defendant,
THE CIVIL SERVICE TRIBUNAL (Full Court)
composed of S. Van Raepenbusch, President, M.I. Rofes i Pujol, President of the Chamber, E. Perillo (Rapporteur), R. Barents and K. Bradley, Judges,
Registrar: J. Tomac, Administrator,
having regard to the written procedure and further to the hearing on 24 April 2013,
gives the following
Judgment
1 By application lodged at the Registry of the Tribunal on 2 December 2011, Mr Verile and Ms Gjergji brought the present action, seeking inter alia annulment of the decisions of 20 and 19 May 2011, respectively, by which the European Commission withdrew the initial proposals determining, at their request, the number of additional years of pensionable service with which they were credited under the European Union pension scheme and notified each of them of a new calculation of additional years of pensionable service resulting from the transfer of the pension rights which they had acquired under national pension schemes before entering the service of the Commission.
Legal context
2 Article 83a of the Staff Regulations of Officials of the European Union (‘the Staff Regulations’) reads as follows:
‘1. The scheme shall be kept in balance in accordance with the detailed rules set out in Annex XII [to the Staff Regulations].
…
3. On the occasion of the five-yearly actuarial assessment in accordance with Annex XII [to the Staff Regulations] and in order to ensure the balance of the [pension] scheme, the Council [of the European Union] shall decide on the rate of contribution and any change to the pensionable age.
4. Each year the Commission shall present to the Council an updated version of the actuarial assessment, in accordance with Article 1(2) of Annex XII [to the Staff Regulations]. Where it is shown that there is a gap of at least 0.25 points between the rate of contribution currently applied and the rate required to maintain actuarial balance, the Council shall consider whether the rate should be adapted, in accordance with the arrangements laid down in Annex XII [to the Staff Regulations].
…’
3 Article 84 of the Staff Regulations provides:
‘Detailed rules governing the foregoing pension scheme are contained in Annex VIII [to the Staff Regulations].’
4 Article 110(1) of the Staff Regulations provides:
‘The general provisions for giving effect to these Staff Regulations shall be adopted by each institution after consulting its Staff Committee and the Staff Regulations Committee. …’
5 Article 8 of Annex VIII to the Staff Regulations, before the entry into force of Council Regulation (EC, Euratom) No 1324/2008 of 18 December 2008 adjusting, from 1 July 2008, the rate of contribution to the pension scheme of officials and other servants of the European Communities (OJ 2008 L 345, p. 17), provided as follows:
‘“Actuarial equivalent of the retirement pension” means the capital value of the benefits accruing to the official by reference to the mortality table referred to in Article 9 of Annex XII [to the Staff Regulations] and subject to 3.5% interest per annum, which rate may be revised in accordance with the rules laid down in Article 10 of Annex XII [to the Staff Regulations].’
6 Article 2 of Regulation No 1324/2008 provides in that regard:
‘With effect from 1 January 2009 the rate, in Articles 4(1) and 8 of Annex VIII to the Staff Regulations … shall be 3.1%.’
7 According to Article 11(1) of Annex VIII to the Staff Regulations:
‘An official who leaves the service of the Union to:
– enter the service of a government administration or a national or international organisation which has concluded an agreement with the Union;
…
shall be entitled to have the actuarial equivalent of his retirement pension rights updated to the actual date of transfer, in the Union transferred to the pension fund of that administration or organisation …’.
8 Conversely, Article 11(2) of Annex VIII to 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;
…
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 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.
Officials may make use of this arrangement once only for each Member State and pension fund concerned.’
9 By Decision C(2004) 1588 of 28 April 2004, published in Administrative Notices No 60 of 9 June 2004, the Commission adopted the general implementing provisions for Articles 11 and 12 of Annex VIII to the Staff Regulations on transferring pension rights (‘the 2004 GIP’). The 2004 GIP refer to two tables of actuarial values contained in two annexes, Annex 1, concerning actuarial values (V1) calculated on the basis of the parameters laid down in Annex XII to the Staff Regulations for purposes of calculating the transferable amount of actuarial equivalent under Articles 11(1) and 12 of Annex VIII to the Staff Regulations, and Annex 2, concerning actuarial values (V2) calculated on the basis of the parameters laid down in Annex XII to the Staff Regulations for purposes of calculating the number of years of pensionable service to be credited under Article 11(2) and (3) of Annex VIII to the Staff Regulations.
10 Actuarial values (V1) and (V2), calculated according to age at the date of the application and on the basis of the parameters laid down in Annex XII to the Staff Regulations, are identical.
11 By Decision C(2011) 1278 of 3 March 2011 on the general implementing provisions for Articles 11 and 12 of Annex VIII to the Staff Regulations on the transfer of pension rights, published in Administrative Notices No 17 of 28 March 2011, the Commission repealed the 2004 GIP and adopted new general implementing provisions for Articles 11 and 12 of Annex VIII to the Staff Regulations (‘the 2011 GIP’).
12 The 2011 GIP entered into force on 1 April 2011 and provide in Article 9 as follows:
‘These general implementing provisions … shall enter into force on the first day of the month following the date on which they are published in the [Administrative Notices].
They shall repeal and replace the [2004 GIP].
However, [the 2004 GIP] shall continue to apply to transfers under Article 11(1) and Article 12 of Annex VIII to the Staff Regulations in cases where the termination of service took place before 1 January 2009. They shall also continue to apply to the cases of staff whose request for a transfer under Article 11(2) and (3) of Annex VIII to the Staff Regulations had been registered before 1 January 2009.
The conversion coefficients … laid down in Annex 1 shall apply from 1 January 2009. They shall be automatically amended following any adjustment of the interest rate set out in Article 8 of Annex VIII to the Staff Regulations’.
13 Unlike the 2004 GIP, Annex 1 to the 2011 GIP comprises a single table containing actuarial values, now called ‘conversion coefficients’, to be used for purposes of calculating both the transferable amount of the actuarial equivalent and the number of additional years of pensionable service to be credited. Those conversion coefficients, also calculated by age at the date of the application and on the basis of the parameters laid down in Annex XII to the Staff Regulations, are higher than the actuarial values V1 and V2 contained in Annexes 1 and 2 to the 2004 GIP.
Facts of the case
M. Verile
14 Mr Verile, an official employed at the Commission’s Joint Research Centre at Ispra (Italy), applied on 17 November 2009 for the transfer of the pension rights he had acquired in Luxembourg before entering the service of the Commission, which corresponded to the national contributions paid between 1 July 1999 and 31 March 2007.
15 By note of 5 May 2010, the relevant Commission service, in this case the Transfer Section of the Pensions Unit of the Office for the Administration and Payment of Individual Entitlements (‘PMO 4’), sent Mr Verile a proposal concerning additional pensionable years which stated that the number of additional years of pensionable service for the purposes of the Staff Regulations, resulting from the transfer of his pension rights acquired in Luxembourg, was seven years and nine months. Since the excess capital sum, amounting to EUR 58 557.18, could not be converted to additional years of pensionable service for the purposes of the Staff Regulations, it was to be paid to Mr Verile on the definitive transfer of his pension rights.
16 On 7 May 2010, Mr Verile signed and thereby accepted the proposal concerning additional pensionable years dated 5 May 2010. PMO 4 received the signed proposal on 18 May 2010.
17 On 20 May 2011, following the entry into force of the 2011 GIP, PMO 4 sent Mr Verile a new proposal concerning additional pensionable years, accompanied by a note explaining that the new proposal ‘annul[led] and replace[d]’ the previous proposal concerning additional pensionable years. According to the new proposal, the conversion coefficients used in the initial proposal were ‘obsolete’ and ‘devoid of a legal basis after 1 January 2009’ due to the entry into force on that date of the interest rate laid down by Regulation No 1324/2008. That interest rate was one of the factors involved in the calculation of the conversion coefficients to be used to convert previously acquired pension rights into a number of additional years of pensionable service for purposes of the Staff Regulations. Consequently, the initial proposal concerning additional pensionable years was ‘to be regarded as null and void’. Applying the conversion coefficients laid down by the 2011 GIP, the number of additional years of pensionable service to be credited was not altered but the excess capital to be reimbursed was reduced from EUR 58 557.18 to EUR 9 200.77.
18 On 17 June 2011, Mr Verile accepted, by putting his signature to it, the second proposal concerning additional years of pensionable service. PMO 4 received the signed second proposal on 24 June 2011.
19 On 26 July 2011, however, Mr Verile lodged a complaint under Article 90(2) of the Staff Regulations, requesting the appointing authority to withdraw the second proposal concerning additional pensionable years and transfer his pension rights on the basis not of the 2011 GIP but of the general implementing provisions applying on the date on which his request for transfer was made, namely the 2004 GIP.
20 By decision of 19 August 2011, received by Mr Verile on 29 August 2011, the appointing authority dismissed that complaint.
Ms Gjergji
21 Ms Gjergji is a member of the contract staff of the Trans-European Transport Network Executive Agency, whose headquarters are located in Brussels (Belgium). On 1 July 2009 she applied to transfer the pension rights, resulting from national contributions paid between 1998 and 2004, which she had acquired in Belgium before she entered the service of that agency.
22 By note of 30 July 2010, the relevant Commission service, in this case PMO 4, sent Ms Gjergji a proposal concerning additional pensionable years, which stated that the number of additional years of pensionable service for the purposes of the Staff Regulations, resulting from the transfer of her pension rights acquired in Belgium, was five years, five months and two days. The excess capital, amounting to EUR 13 143.08, which could not be converted to additional years of pensionable service for purposes of the Staff Regulations, was to be paid to Ms Gjergji on the definitive transfer of her pension rights.
23 On 7 September 2010, Ms Gjergji signed and thereby accepted the proposal concerning additional pensionable years dated 30 July 2010. PMO 4 received the signed proposal on 16 September 2010.
24 On 19 May 2011, following the entry into force of the 2011 GIP, PMO 4 sent Ms Gjergji a new proposal concerning additional pensionable years, accompanied by a note worded in similar terms to the note sent to Mr Verile, reducing the number of additional years of pensionable service for purposes of the Staff Regulations from five years, five months and two days to four years, ten months and eighteen days and not making provision for any excess capital to be reimbursed.
25 On 23 September 2011, Ms Gjergji signed and thereby accepted the second proposal concerning additional pensionable years.
26 In the meantime, however, Ms Gjergji had lodged a complaint under Article 90(2) of the Staff Regulations against the second proposal concerning additional pensionable years dated 27 July 2011. Ms Gjergji’s complaint also contained a request, under Article 90(1) of the Staff Regulations, for her pension rights acquired in Belgium to be transferred on the basis of the initial proposal concerning additional pensionable years, which applied the parameters laid down by the 2004 GIP.
27 By decision of 22 August 2011, the authority empowered to conclude contracts of employment dismissed Ms Gjergji’s complaint and her request under Article 90(1) of the Staff Regulations.
Forms of order sought and procedure
28 The applicants each claim that the Tribunal should, in so far as he or she is concerned :
– annul the second proposal concerning additional pensionable years;
– annul the decision dismissing the complaint;
– order the Commission to pay the costs.
29 The Commission contends that the Tribunal should:
– declare the action inadmissible and in any event unfounded;
– order the applicants to pay the costs.
30 By letter of 28 January 2013, the Tribunal asked the parties, by way of measures of organisation of procedure, to clarify certain points in their pleadings and provide various documents. The parties complied with those measures in accordance with the directions of the Tribunal.
31 The case, initially assigned to the Third Chamber of the Tribunal, was referred to the full court of the Tribunal; the parties were informed accordingly by a letter from the Registry of 8 February 2013 convening the hearing and sending the preparatory report for the hearing.
Law
Subject-matter of the action
32 It should be noted that a claim for annulment formally brought against a decision to reject a complaint has, where that decision lacks any independent content, the effect of bringing before the Tribunal the act against which the complaint was submitted (judgment of 17 January 1989 in Case 293/87 Vainker v European Parliament, paragraph 8).
33 In the present case, the decisions rejecting the complaints merely confirm the second proposals concerning additional pensionable years, dated 20 May 2011 in the case of Mr Verile and 19 May 2011 in the case of Ms Gjergji (‘the second proposals concerning additional pensionable years’). The action must therefore be regarded as being directed only against those proposals.
Admissibility of the action
Arguments of the parties
34 The Commission contends that the action is inadmissible since it is directed against the second proposals concerning additional pensionable years, which are not acts adversely affecting the applicants.
35 According to the Commission, the administrative procedure for the processing of requests for the transfer of pension rights acquired under a national pension scheme comprises five stages: (i) a request for transfer by the official or staff member concerned; (ii) a proposal concerning additional pensionable years determining the number of additional years of pensionable service that can be credited under the European Union pension scheme, sent to the person concerned by the Commission; (iii) acceptance or refusal of that proposal by the person concerned; (iv) in the event of acceptance by the person concerned, a request for transfer of the capital sum corresponding to the pension rights acquired under the national pension scheme, sent by the Commission to the competent national authority; (v) adoption of the decision determining definitively the number of additional years of pensionable service for the purposes of the Staff Regulations credited to the official or staff member, notified to that individual only after the Commission has actually received from the national or international pension funds concerned the capital sum corresponding to the pension rights previously acquired.
36 In the light of the above description of the administrative procedure for the processing of requests for the transfer of pension rights, which is not disputed by the applicants, the calculation of additional years of pensionable service contained in the proposal sent to the person concerned does not become definitive, according to the Commission, until after the sums corresponding to the updated capital value of the previously acquired pension rights have actually been paid into the Commission’s bank account by the national or international pension fund concerned. The decision taken at the fifth stage of the abovementioned administrative procedure is therefore the only act adversely affecting the official or staff member who has submitted a request for the transfer of his pension rights acquired before entering the service of the European Union. The Commission concludes from this that the proposal concerning additional pensionable years, which corresponds to the second stage of the administrative procedure in question, is a preparatory act, the purpose of which is merely to prepare for the final decision on additional years of pensionable service. That is the case here as regards the second proposals concerning additional pensionable years, which form the subject-matter of the dispute.
Findings of the Tribunal
37 It should be noted first of all that the system for the transfer of pension rights, as set out in Article 11(2) of Annex VIII to the Staff Regulations, seeks, by enabling the European Union scheme to be coordinated with the national schemes, to facilitate movement from national employment, whether public or private, and also from international employment, to the European Union administration and thus to ensure that the Union has the best possible chance of being able to choose qualified staff who already possess suitable experience (order of 9 July 2010 in Joined Cases C‑286/09 and C‑287/09 Ricci, paragraph 28 and the case-law cited).
38 In that context, the General Court held in particular that proposals concerning additional pensionable years sent to officials for agreement are ‘decisions’ which have a double effect: first of preserving for the official concerned, in the original legal system, the amount of pension rights he acquired in the national pension scheme and, secondly, of ensuring that, in the European Union legal order and subject to the fulfilment of certain additional conditions, those rights are taken into account in the European Union pension scheme (judgment of 18 December 2008 in Joined Cases T‑90/07 P and T‑99/07 P Belgium and Commission v Genette, paragraph 91 and the case-law cited).
39 The Tribunal also, for its part, has held that proposals concerning additional pensionable years constitute unilateral acts which do not call for any other measure on the part of the competent institution and which adversely affect the official concerned. If that were not so those acts would, as such, not be open to challenge before the courts or, at least, could not be the subject of a complaint or an action until a later decision was taken, at an unspecified date, by an authority other than the appointing authority. That analysis does not respect either the right of officials to effective judicial protection or the requirements of legal certainty inherent in the rules on time-limits laid down in the Staff Regulations (order of 10 October 2007 in Case F‑17/07 Pouzol v Court of Auditors, paragraphs 52 and 53).
40 Lastly, that line of authority was also upheld by the judgment of 11 December 2012 in Case F‑122/10 Cocchi and Falcione v Commission (which is currently under appeal before the General Court, Case T‑103/13 P, paragraphs 37 to 39), in which the Tribunal held that the proposal concerning additional pensionable years was an act adversely affecting the official concerned.
41 It is therefore clear from the case-law cited in paragraphs 38 to 40 above that the proposal concerning additional pensionable years which the competent services of the Commission submit for an official’s agreement, during the various stages of the administrative procedure described in paragraph 35 above, is a unilateral act, separable from the procedural framework in which it is taken, adopted under circumscribed powers attributed ex lege to the institution, since it stems directly from the individual right which Article 11(2) of Annex VIII to the Staff Regulations confers expressly on officials and other servants when they enter the service of the European Union.
42 The exercise of those circumscribed powers requires the Commission to draw up a proposal concerning additional pensionable years which is based on all the relevant data which it is required to obtain from the national or international authorities concerned specifically in the context of close coordination and sincere cooperation between these authorities and the Commission services. Such a proposal, therefore, cannot be regarded as the manifestation of a ‘mere intention’ of the service of the institution to provide information to the official concerned, pending receipt of his agreement followed by receipt of the capital sum enabling the institution to credit the additional years of pensionable service. On the contrary, such a proposal constitutes the necessary commitment on the part of the institution to proceed correctly in implementing effectively the official’s right to transfer of his pension entitlements which he has exercised in submitting his request for transfer. The transfer of the updated capital sum to the European Union pension scheme, for its part, constitutes the honouring of a separate obligation incumbent on the national or international authorities, which is necessary in order to carry out in full the procedure for the transfer of pension rights to the European Union pension scheme.
43 Thus, the exercise of circumscribed powers in the implementation of Article 11(2) of Annex VIII to the Staff Regulations requires the Commission to employ all necessary diligence in order to enable an official who has requested the application of Article 11(2) of Annex VIII to the Staff Regulations to give his agreement to the proposal concerning additional pensionable years in full knowledge of the facts, both as regards the data required in order to calculate the number of additional pensionable years for purposes of the Staff Regulations to be credited and as regards the rules governing, ‘at the date of application for a transfer’, the method for such calculation, as expressly stated in Article 11(2) of Annex VIII to the Staff Regulations, which provides that the institution in which the official serves is to ‘determine’ by means of general implementing provisions ‘the number of years of pensionable service’ with which he is to be credited, taking into account the official’s basic salary, age and exchange rate at the date of application for a transfer.
44 It is clear from all the foregoing that a proposal concerning additional pensionable years is an act adversely affecting the legal situation of an official who has made a request for transfer of his pension rights.
45 That conclusion is also supported by the following considerations.
46 In the first place, codifying previous practice in clauses contained in proposals of additional pensionable years, Article 8 of the 2011 GIP now expressly provides that the agreement which the official is requested to give to the proposal concerning additional years of pensionable service, once given, is ‘irrevocable’, confirming an earlier practice which was written into clauses contained in proposals concerning additional years of pensionable service. However, the irrevocable nature of the official’s agreement once given is justified only if the Commission, for its part, has submitted to the person concerned a proposal whose content has been calculated and put forward with all due care and which is binding on the Commission in so far as it obliges it to carry out the transfer process on that basis where the person concerned gives his agreement.
47 Secondly, the proposal concerning additional pensionable years is made, in principle, on the basis of a method of calculation which is the same as the one applying at the time when the European Union pension scheme receives in full the capital sum definitively transferred by the national or international fund holding the funds.
48 The most that might change between the date of the proposal concerning additional pensionable years and the date of receipt of the capital sum definitively transferred is the amount of the sum concerned, as the amount of the transferable capital sum updated to the date of the request for transfer may be different from the amount of the capital sum on the date on which it is actually transferred, because of fluctuations in exchange rates, for example. Even in the latter case, which can only affect capital transfers expressed in currencies other than the euro, the method of calculation applied to both amounts is the same.
49 Thirdly, the Commission’s argument that only the decision on additional years of pensionable service adopted after receipt of the capital transferred adversely affects the official concerned clearly conflicts with the purpose of the administrative procedure for the transfer of pension rights. The purpose of that procedure is specifically to enable the official concerned to decide, in full knowledge of the facts and before the capital sum corresponding to all his contributions is definitively transferred to the European Union pension scheme, whether it is more advantageous for him to combine his previous pension rights with those he acquires as a European Union official or, on the other hand, to preserve his rights in the national legal system (see Belgium and Commission v Genette, paragraph 91). In accordance with the Commission’s approach, the official concerned would be obliged to challenge the method whereby the Commission services calculated the number of additional pensionable years to which he is entitled only after the national or international pension fund making the transfer has definitively transferred the capital sum to the Commission, which would amount in practice to destroying the very essence of the official’s right under Article 11(2) of Annex VIII to the Staff Regulations to choose whether to transfer his pension rights or keep them in the original national or international pension fund.
50 Fourthly and lastly, it cannot be argued that, as the Commission contends, the proposals concerning additional pensionable years are only preparatory acts, on the ground that Article 11(2) of Annex VIII to the Staff Regulations requires the number of additional pensionable years to be calculated ‘on the basis of the capital transferred’.
51 In that regard, it should be noted first of all that it is clear from the wording of Article 11(2) of Annex VIII to the Staff Regulations that the institution concerned is to ‘determine’ the number of years of pensionable service initially ‘by means of general implementing provisions’, ‘taking into account the official’s basic salary, age and exchange rate at the date of application for a transfer’ and that it then is to take into account the number of years of pensionable service thus determined to be credited under the European Union pension scheme ‘on the basis of the capital transferred’.
52 This wording is supported by Article 7 of the 2004 GIP and Article 7 of the 2011 GIP. Paragraph 1 of each of those articles provides that the number of pensionable years to be taken into account is to be calculated ‘on the basis of the transferable amount of the pension rights acquired … minus the amount of capital appreciation between the date on which the transfer application is registered and the date of the actual transfer’.
53 Article 7(2) of the 2004 GIP, in common with the 2011 GIP, states that the number of years of pensionable service to be taken into account ‘is to be calculated … on the basis of the transferred amount’, according to the mathematical formula laid down in the first indent of Article 7(2).
54 It is therefore clear from the abovementioned provisions that proposals concerning additional pensionable years are to be calculated on the basis of the transferable amount on the date of registration of the transfer, as notified by the competent national or international authorities to the Commission services, minus where appropriate the amount of capital appreciation between the date on which the transfer application is registered and the date of the actual transfer, and that that difference in monetary terms should not be borne by the European Union pension scheme.
55 It follows from all the above considerations that the second proposals concerning additional pensionable years are an act adversely affecting the officials concerned and that the claims for annulment are therefore admissible.
Substance
56 In support of their claims directed against the second proposals concerning additional pensionable years (‘the contested decisions’), the applicants put forward three pleas:
– first: an error in law and infringement of Article 11(2) of Annex VIII to the Staff Regulations, and, in essence, failure to respect acquired rights;
– second: infringement of the principle that action must be taken within a reasonable period, and of the principles of legal certainty and protection of legitimate expectations;
– third: infringement of the principles of equal treatment, non-discrimination and proportionality.
57 It is appropriate to examine the first and second pleas together.
Arguments of the parties
58 First, the applicants claim that Article 11(2) of Annex VIII to the Staff Regulations requires the Commission, if it intends to amend the actuarial values applicable to requests for the transfer of pension rights acquired in a Member State to the European Union pension scheme (‘transfer in’), to adopt new general implementing provisions. The Commission did not however adopt new general implementing provisions until 3 March 2011. The 2004 GIP, which were in force until that date, are therefore the only ones applicable to their respective transfer requests.
59 In any event, the entry into force of Regulation No 1324/2008 on 1 January 2009 has no effect on the rates to be applied to the calculation of the number of pensionable years to be credited. That regulation amended the interest rate laid down in Article 8 of Annex VIII to the Staff Regulations, which is used exclusively in the event of transfer to a national pension scheme of the actuarial equivalent under the Staff Regulations, namely the capital amount of pension rights acquired by an official within the European Union (‘transfer outʼ) and is not therefore applicable in the event of a ‘transfer in’.
60 Moreover, even if Regulation No 1324/2008 had amended ‘by analogy’ the underlying interest rate for conversion coefficients applying in the case of a ‘transfer in’, the general implementing provisions for Article 11(2) of Annex VIII to the Staff Regulations would, according to the applicants, prevail as a lex specialis, over that regulation. In brief, by virtue of the principle that an administrative act is presumed to be lawful, a regulation of the European Union could not deprive of a legal basis general implementing provisions adopted, on the basis of the Staff Regulations, individually by each of the institutions concerned. As the 2004 GIP were not repealed by the 2011 GIP until 3 March 2011 they were therefore applicable at the time the initial proposals concerning additional pensionable years were sent to them and were accepted by each of them.
61 Consequently, by considering, first, that one of the calculation parameters applicable in the event of a ‘transfer in’ could be amended in an ‘implicit and indirect’ fashion by Regulation No 1324/2008, the Commission infringed Article 11(2) of Annex VIII to the Staff Regulations. By considering, secondly, that Regulation No 1324/2008 required it to apply the 2011 GIP at the date of entry into force of the new interest rate and, consequently, to apply them retroactively from 1 January 2009, the Commission committed an error in law.
62 Thus the applicants argue that, contrary to what the Commission states, the transfer of pension rights acquired before entry into service with the European Union is definitive where the official concerned has given his agreement to the proposal concerning additional years of pensionable service. Only total failure by the national authority to pay the capital sum would completely invalidate the agreement between the official and the institution concerned. In the present case, the initial proposals concerning additional pensionable years therefore became definitive as a result of being accepted, although payment of the capital sum had not yet taken place.
63 Secondly, the applicants maintain that the initial proposals concerning additional pensionable years were not unlawful in any way. In withdrawing those proposals the Commission did not therefore respect their acquired rights and infringed the principle of legal certainty. Moreover, they were given assurances on several occasions that the 2004 GIP would be applied to their transfer requests.
64 Thirdly, the applicants state that the Commission withdrew the initial proposal concerning additional pensionable years addressed to Mr Verile one year after he had accepted it and, in the case of Ms Gjergji, more than six months after she had accepted the initial proposal, in breach of the principle that action must be taken within a reasonable period and of the principle of legal certainty.
65 Moreover, in their response to measures of organisation of procedure, the applicants contend that the Commission waited until 17 September 2010 to draw the attention of staff to that point, by means of a note circulated on its intranet site and that it also waited until 3 March 2011 to adopt new general implementing provisions, although according to the contested decisions it considered that the entry into force on 1 January 2009 of the new interest rate laid down by Regulation No 1324/2008 had rendered the 2004 GIP devoid of ‘legal basis’.
66 In response to the first plea, the Commission contends that the premise of the applicants’ reasoning, namely that the interest rate laid down in Article 8 of Annex VIII to the Staff Regulations concerns exclusively the method for calculating the actuarial equivalent in the event of a ‘transfer out’ and not the method for calculating the actuarial equivalent of the updated capital sum or the number of pensionable years in the event of a ‘transfer in’, is erroneous. The applicants’ first plea is therefore unfounded.
67 In its response to measures of organisation of procedure, the Commission stated that, since the conversion coefficients laid down in the general implementing provisions for Article 11(2) of Annex VIII to the Staff Regulations are ‘directly dependent’ on the interest rate laid down in Article 8 of Annex VIII to the Staff Regulations, the amendment of the latter, which took place on 1 January 2009 with the entry into force of Regulation No 1324/2008, had ‘necessarily’ led on the same date to amendment of those conversion coefficients. The conversion coefficients laid down by the 2004 GIP thus became ‘obsolete’ and ‘devoid of legal basis’ on 1 January 2009, independently of any formal repeal of the 2004 GIP.
68 Secondly, the Commission argues that the applicants did not formally raise the plea of infringement of the rules on the withdrawal of administrative acts and that in any event the initial proposals concerning additional pensionable years had, since the entry into force of Regulation No 1324/2008, been devoid of legal basis and therefore could not give rise to any acquired rights for the applicants or any legitimate expectations.
69 Moreover, the Commission states that the notice of 17 September 2010 circulated on its intranet site drew the attention of staff to the entry into force of the new actuarial values and that the trade union organisations had been aware of the future interest rate since 2008 and of the future conversion coefficients since November 2009. Besides, it would have been impossible in practical terms to inform individually, within a reasonable period, those officials and other staff members whose transfer requests had been registered after 1 January 2009 because of the very large number (over 10 000) of officials and other staff members concerned.
70 Lastly, the Commission argues that, even if the conversion coefficients laid down in the 2011 GIP were applied retroactively, such retroactive application was justified by an ‘overriding interest’. The cost of applying the actuarial values laid down in the 2004 GIP until the entry into force of the 2011 GIP would, in view of the number of cases concerned, have jeopardised the equilibrium of the European Union pension scheme.
71 Thirdly, the Commission considers that the plea alleging infringement of the principle that action must be taken within a reasonable period is not adequately substantiated, and, even if it were well-founded, such a plea could not result in annulment of the contested decisions. In any event, the initial proposals concerning additional pensionable years were withdrawn within a reasonable period in view of the circumstances of this case.
Findings of the Tribunal
72 By their first and second pleas, the applicants claim in essence that Article 9, third paragraph, second sentence, and Article 9, fourth paragraph, first sentence, of the 2011 GIP are unlawful. According to the applicants, those provisions of the 2011 GIP state that the conversion coefficients in Annex 1 to the 2011 GIP, laid down in accordance with Regulation No 1324/2008, have applied since 1 January 2009, the date of entry into force of that regulation, although at that date Annex 2 to the 2004 GIP, which laid down different conversion coefficients applying from 1 May 2004, had not been formally amended in any way. The applicants submit that such formal amendment was required under Article 11(2) of Annex VIII to the Staff Regulations, and that application with retroactive effect to 1 January 2009 of the new conversion coefficients laid down in Annex 1 to the 2011 GIP, including to the cases of officials and other staff members whose request to ‘transfer in’ had been made before that date, infringes the principles of legal certainty and protection of legitimate expectations.
73 To justify in law the third and fourth paragraphs of Article 9 of the 2011 GIP, the Commission submits in essence that Article 2 of Regulation No 1324/2008 rendered the 2004 GIP obsolete and automatically devoid of legal basis as regards the method for calculating the number of pensionable years to be taken into account.
– The effect of Regulation No 1324/2008 on the 2004 GIP
74 It is clear from the wording of Article 2 of Regulation No 1324/2008 that that regulation, with respect to officials and other servants of the European Union, has only two purposes.
75 The first is the determination, under Article 4(1) of Annex VIII to the Staff Regulations, of the rate applying to calculation of the pension rights of an official who resumes service within the European Union having previously completed a period of activity there. It is clear from the outset that such a purpose is not relevant in the present case.
76 The second is the determination of the rate to be used in order to determine the ‘actuarial equivalent’ of the retirement pension. It should be pointed out that that term is used in Article 11(1) of Annex VIII to the Staff Regulations in respect of ‘transfer out’ and not in Article 11(2) of that annex in respect of ‘transfer in’.
77 It should be noted that Article 11 of Annex VIII to the Staff Regulations draws a clear distinction between ‘transfer out’ in paragraph 1, on the one hand, and ‘transfer in’ in paragraph 2, on the other.
78 In the case of a ‘transfer out’, Article 11(1) of Annex VIII to the Staff Regulations provides that the official concerned is entitled to have ‘the actuarial equivalent of [the] retirement pension rights, updated to the actual date of transfer, within the European Union transferred’. However, in the case of a ‘transfer in’, Article 11(2) provides that the official concerned is entitled to have paid to the European Union ‘the capital value, updated to the date of the actual transfer, of pension rights acquired [under the national or international scheme to which he previously belonged]’. In the case of a ‘transfer out’, the sum of money transferred is the ‘actuarial equivalent’ of the rights acquired within the European Union; in the case of ‘transfer in’, the sum of money transferred is the ‘updated capital sum’, namely an amount of money which actually represents the pension rights acquired by virtue of the previous activities of the official concerned under the relevant national or international pension scheme, updated to the actual date of transfer, in pursuance of Article 11(2), first subparagraph, of Annex VIII to the Staff Regulations (see, to that effect, judgment of 5 December 2013 in Case C‑166/12, Časta, paragraph 26).
79 The ‘actuarial equivalent’ referred to in Article 11(1) of Annex VIII to the Staff Regulations and the ‘updated capital value’ referred to in Article 11(2) are two separate legal concepts, each belonging to separate schemes.
80 The ‘actuarial equivalent’, under the rules of the Staff Regulations, is an autonomous concept used within the European Union pension scheme. It is defined in Article 8 of Annex VIII to the Staff Regulations as meaning ‘the capital value of the [retirement pension] benefits accruing to the official by reference to the mortality table referred to in Article 9 of Annex XII [to the Staff Regulations] and subject to 3.1% interest per annum, which rate may be revised in accordance with the rules laid down in Article 10 of Annex XII [to the Staff Regulations]’. The latest revision of the interest rate referred to in Article 8 of Annex VIII to the Staff Regulations was in fact made, under Article 10 of Annex XII to the Staff Regulations, by Regulation No 1324/2008, which reduced the interest rate from 3.5% to 3.1%.
81 ‘Updated capital value’, by contrast, is not defined by the Staff Regulations, nor do they indicate the method for calculating it, because the calculation of this value and the procedure for the review of such calculations, as consistently stated in case-law, are matters falling exclusively within the competence of the national or international authorities concerned (Belgium and Commission v Genette, paragraphs 56 and 57 and the case-law cited).
82 The Commission maintains none the less that the actuarial equivalent is also a ‘method’ of calculation which, as such, should be used not only in the case of a ‘transfer out’, where sums are paid out from the funds of the European Union pension scheme into those of a pension scheme of a Member State or of an international organisation, but also in the case of a ‘transfer in’, where, conversely, sums of money are paid into the funds of the European Union pension scheme.
83 As a method of calculation, the actuarial equivalent applies therefore, according to the Commission, in both the cases in which retirement pension rights are transferred. The Commission submits in that regard that Article 11(2) of Annex VIII to the Staff Regulations has, since the reform of the Staff Regulations in 2004, imposed a new condition on the national authorities concerned, namely that the capital value of all the contributions paid by an official who has recently entered the service of the European Union should be ‘updated to the date of the actual transfer’. In the view of the Commission, given that that new condition is contained in the Staff Regulations, it introduces for the national authorities concerned an obligation to update the capital sum according to the parameters laid down in the Staff Regulations, which include the interest rate as last amended by Regulation No 1324/2008.
84 The Commission’s view is not however justified in law.
85 It is clear from case-law that the ‘transfer in’ system comprises two separate administrative phases. The first phase consists in the determination of the updated capital value by the national or international authorities administering the pension scheme to which the person concerned belonged until entering the service of the European Union. That entire phase falls within the exclusive jurisdiction of the competent national or international authorities. The second phase, on the other hand, consists in the conversion, by the EU institution concerned, of the updated capital value, as determined by the original national or international authorities, into years of pensionable service to be credited under the European Union pension scheme, on the basis of the rules of the European Union’s own pension scheme, including the rules contained in the general implementing provisions which each institution is required to adopt in respect of ‘transfers in’ (see, to that effect, Belgium and Commission v Genette, paragraphs 56 and 57).
86 The two decisions, concerning, first, the calculation of the updated capital value and, second, the conversion of that updated value into years of pensionable service under the Staff Regulations therefore fall within two different legal systems and must each be amenable to review by the courts having jurisdiction under the relevant legal system.
87 The fact that Article 11(2) of Annex VIII to the Staff Regulations has provided, since the reform of the Staff Regulations in 2004, that national or international authorities must update, to the actual date of transfer, the capital value of all the contributions paid by an official or staff member who has recently entered the service of the European Union clearly entails an obligation on those authorities, but it does not mean, in the absence of an express provision to that effect, that such updating should be carried out in the same way as for ‘transfers out’. On the contrary, as the Court held in Časta, paragraphs 25 and 26, Member States are free to apply either the ‘actuarial equivalent’ method, or the ‘flat-rate redemption value’ or other methods.
88 Accordingly, with regard, in the first place, to the calculation by the competent national or international authorities, with a view to a ‘transfer in’, of the updated capital sum, that capital sum is determined on the basis of the relevant national law and according to the detailed rules laid down by that law or, in the case of an international organisation, by its own rules, and not on the basis of Article 8 of Annex VIII to the Staff Regulations and according to the interest rate laid down in that provision. That is, moreover, what the Court of First Instance found, in paragraph 57 of Belgium and Commission v Genette, when it held that in the case of a ‘transfer in’ the decision concerning the calculation of the amount of the pension rights to be transferred falls within the relevant national legal system and must be dealt with solely by the national court (see, to that effect, Časta, paragraph 24).
89 It follows that Article 2 of Regulation No 1324/2008 must not be taken into consideration as an element of the method of calculating the capital sum corresponding to the pension rights acquired by an official or staff member before entering the service of the European Union and that it must not necessarily be taken into consideration by the national or international authorities concerned when they update that capital sum, which they are required to transfer.
90 Secondly, as regards the calculation of the number of additional years of pensionable service to be credited under the European Union pension scheme, which is a separate calculation from that of the updated capital sum, as is clear from paragraphs 85 to 87 above, it should be noted that neither Article 11(2) of Annex VIII to the Staff Regulations concerning ‘transfers in’ nor any other provision of the Staff Regulations expressly lays down an obligation to apply to the calculation of the number of additional years of pensionable service to be credited under the European Union pension scheme the interest rate referred to in Article 8 of that annex. It follows that the Commission’s assertion that the conversion coefficients, in the case of a ‘transfer in’, are ‘directly dependent’ on the interest rate laid down in Article 8 of Annex VIII to the Staff Regulations is not based on any provision of the Staff Regulations.
91 Furthermore, the Council cannot, by means of an implementing regulation adopted on the basis of Article 83a of the Staff Regulations, reduce the scope of the second subparagraph of Article 11(2) of Annex VIII to the Staff Regulations by calling into question the autonomy which the EU legislature conferred on the institutions in that provision by giving them the power to determine by means of general implementing provisions the number of years of pensionable service in the case of a ‘transfer in’.
92 It is true that Article 7(2) of the 2004 GIP refers, for purposes of the calculation of the number of pensionable years to be taken into account on the basis of the capital sum corresponding to the contributions actually transferred to the European Union pension scheme, to actuarial values V2 as provided for in the table in Annex 2 to the 2004 GIP, which are in turn, pursuant to that annex, ‘calculated on the basis of the parameters laid down in Annex XII to the Staff Regulations’. Those parameters include the rate laid down in Article 8 of Annex VIII to the Staff Regulations.
93 However, Annex 2 to the 2004 GIP sets out the actuarial values as calculated on the basis, inter alia, of the 3.5% rate laid down in Article 8 of Annex VIII to the Staff Regulations before it was amended by Regulation No 1324/2008. It was in fact those values which were taken into consideration by the Commission when drafting the initial proposals concerning additional pensionable years submitted to the applicants, although Article 8 of Annex VIII to the Staff Regulations had in the meantime been amended by Regulation No 1324/2008.
94 In those circumstances, in the context of the implementation of Article 11(2) of Annex VIII to the Staff Regulations and, in particular, for the purpose of updating the conversion coefficients in the case of a ‘transfer in’, in the light of the new rate of 3.1% laid down in Article 8 of Annex VIII to the Staff Regulations, following the entry into force of Regulation No 1324/2008, it was incumbent on the Commission, in accordance with Article 11(2), which refers to general implementing provisions for its implementation, and also in accordance with the principle of legal certainty, to amend the 2004 GIP and to draw up a new table of actuarial values. That is moreover what the Commission did in adopting the 2011 GIP, which contain in the annex new actuarial values, referred to as ‘conversion coefficients’ in those general implementing provisions, for the purpose of calculating additional pensionable years.
95 It should be added that Article 8 of Annex VIII to the Staff Regulations, as amended following the entry into force of Regulation No 1324/2008, could be rendered applicable to ‘transfers in’ only by means of the general implementing provisions which institutions were required to adopt according to Article 11(2) of Annex VIII to the Staff Regulations. The applicability of Article 8 in the present case stems from the reference to the ‘parameters laid down in Annex XII to the Staff Regulations’, which appears in the title of Annex 2 to the 2004 GIP, and that is because Annex XII itself refers, in Article 1(2), Article 10(2) and Article 12, to the rate laid down in Article 8 of Annex VIII to the Staff Regulations. The title of Annex 2 to the 2004 GIP serves to explain the method of calculation adopted by the Commission under its implementing powers, conferred by Article 11(2) of Annex VIII to the Staff Regulations, and it may be used only in order to interpret the legislative element contained in the table of actuarial values (see, as regards the normative value of the title of an article of a directive, the judgment of 3 April 2003 in Case C‑144/00 Hoffmann, paragraphs 37 to 40). In addition, such multiple cross-references, which are in many cases impenetrable, cannot prevail over the express data contained in the table of actuarial values in question without infringing the principle of legal certainty.
96 In conclusion, the Commission’s argument that the method for calculating the actuarial equivalent, laid down in Article 8 of Annex VIII to the Staff Regulations, should also necessarily be used for determining the updated capital value, or indeed the number of additional pensionable years, as provided in Article 11(2) of Annex VIII to the Staff Regulations, conflicts with the wording of the latter provision and with the intention of the EU legislature, which sought to maintain in the Staff Regulations a clear distinction between the two events, ‘transfer in’ and ‘transfer out’ of pension rights, and consequently also between the concepts of updated capital value and actuarial equivalent.
97 In the light of the foregoing, the Commission’s view that Regulation No 1324/2008 rendered the 2004 GIP obsolete and automatically devoid of legal basis as regards the method for calculating the number of pensionable years to be credited is legally incorrect, since the justification for such a view disregards both the scope of that regulation and Article 11(2) of Annex VIII to the Staff Regulations.
98 It is therefore appropriate to consider whether the Commission was entitled to apply the new conversion coefficients contained in Annex 1 to the 2011 GIP to transfer requests made before the entry into force of the 2011 GIP on 1 April 2011.
– Retroactive application of the conversion coefficients contained in Annex 1 of the 2011 GIP
99 It must be recalled, as a preliminary point, that, according to a generally accepted principle and save as otherwise provided, a new rule applies immediately to situations yet to arise and to the future effects of situations which arose, but were not fully constituted, under the old rule (judgment of 13 June 2012 in Case F‑31/10 Guittet v Commission, paragraph 47 and the case-law cited).
100 It must therefore be established whether, at the time when the new conversion coefficients laid down in the 2011 GIP became applicable, that is on 1 April 2011, the applicants were in a situation which arose and was fully constituted under the 2004 GIP. Only if that were the case could it in fact be acknowledged that the conversion coefficients laid down in the 2011 GIP were applied retroactively to the applicants. In that case, it would be necessary to examine the plea of illegality raised by the applicants and, in particular, the legality of the retroactive application of the conversion coefficients laid down in the 2011 GIP in the light of the principles of legal certainty and respect for legitimate expectations (see, to that effect, Guittet v Commission, paragraph 48).
101 In the present case, in order for the situation of an official or staff member who has made a request to ‘transfer in’ to have been fully constituted under the actuarial values V2 annexed to the 2004 GIP, it must be established that, by the end of the day preceding the date of entry into force of the new conversion coefficients laid down in the 2011 GIP, that is to say 31 March 2011 at the latest, the person concerned had accepted the proposal concerning additional pensionable years which had been made to him under the 2004 GIP.
102 In the present case, the applicants each accepted, so far as he or she was concerned, the initial proposal concerning additional years of pensionable service. Their situations with regard to their right to ‘transfer in’, which arose under the 2004 GIP, were therefore fully constituted at the time of the entry into force of the 2011 GIP and so the 2004 GIP were fully applicable to them.
103 In view of the above considerations, it would appear that Article 9 of the 2011 GIP, in so far as it provides, in the first sentence of the fourth paragraph, that the conversion coefficients laid down in Annex 1 to the 2011 GIP are to apply from 1 January 2009, covers, as regards officials or other staff members who have accepted a proposal concerning additional pensionable years before 31 March 2011, situations fully constituted under the 2004 GIP. Article 9 of the 2011 GIP therefore gives retroactive scope to application of those coefficients.
104 However, as was noted in paragraphs 99 and 100 above, the principle of legal certainty precludes a European Union act from taking effect as from a date prior to its entry into force. It may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected (Guittet v Commission, paragraphs 63 and 64 and the case‑law cited).
105 In the present case, the Commission has not proved that the purpose to be achieved demanded the retroactive application of the 2011 GIP. In fact, although the Commission argued that the entry into force of the conversion coefficients on 1 January 2009 was required under Regulation No 1324/2008, it is clear from paragraphs 91 to 97 above that Regulation No 1324/2008 did not render the 2004 GIP obsolete or automatically deprive them of a legal basis in so far as the method of calculating the number of additional pensionable years is concerned.
106 Furthermore, it must be held that the Commission has not demonstrated that a compelling overriding interest required it to apply the 2011 GIP from the date of entry into force of Regulation No 1324/2008. It should be noted that, under Article 83a of the Staff Regulations, responsibility for keeping the European Union pension scheme in balance lies with the Council, which, on the basis of the actuarial assessment submitted to it each year by the Commission and on a proposal from the Commission, is to adopt by a qualified majority the corresponding regulation, which, as was moreover the case with Regulation No 1324/2008, is applicable to all the institutions, bodies, offices and agencies of the European Union. Therefore, it is not for the Commission on its own to ensure that the European Union pension scheme is kept in balance, and especially not by means of its own general implementing provisions.
107 Lastly, the application of the conversion coefficients laid down in Annex 1 to the 2011 GIP before the entry into force of those general implementing provisions on 1 April 2011, to officials or other staff members who had accepted a proposal concerning additional pensionable years before 1 April 2011, necessarily infringed the legitimate expectations of those officials or other staff members (see, to that effect, Guittet v Commission, paragraph 66).
108 It follows from the above that the provisions of Article 9, third paragraph, last sentence, and of Article 9, fourth paragraph, first sentence, of the 2011 GIP must be declared unlawful in so far as they provide for the application of the conversion coefficients laid down in Annex 1 to the 2011 GIP to officials and other staff members who accepted a proposal concerning additional pensionable years before the entry into force of the 2011 GIP.
109 The initial proposals concerning additional years of pensionable service, which applied the 2004 GIP, were not in that regard unlawful in any way and could not therefore be withdrawn (see, to that effect, judgment of 12 May 2010 in Case T‑491/08 P Bui Van v Commission, paragraph 37 and the case-law cited).
110 In any event, the general implementing provisions applicable on the dates on which the applicants’ requests for ‘transfer in’ were registered, 17 November and 1 July 2009 respectively, were the 2004 GIP and not the 2011 GIP. Since the contested decisions applied the conversion coefficients laid down in Annex 1 to the 2011 GIP, the first and second pleas examined together must be upheld and, without there being any need to rule on the third plea of the action, the contested decisions must be annulled.
Costs
111 Under Article 87(1) of the Rules of Procedure, without prejudice to the other provisions of Chapter 8 of Title 2 to those rules, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Under Article 87(2), the Tribunal may, if equity so requires, decide that an unsuccessful party is to pay only part of the costs or even that the unsuccessful party is not to be ordered to pay any costs.
112 It follows from the reasoning set out in the present judgment that the Commission is unsuccessful. Moreover, in their pleadings, the applicants have expressly applied for the Commission to pay the costs. Since the circumstances of this case do not warrant application of the provisions of Article 87(2) of the Rules of Procedure, the Commission must bear its own costs and be ordered to pay the costs incurred by the applicants.
On those grounds,
THE CIVIL SERVICE TRIBUNAL (Full Court)
hereby:
1. Annuls the decisions of the European Commission of 20 May 2011 and 19 May 2011 addressed to Mr Verile and Ms Gjergji, respectively;
2. Declares that the European Commission is to bear its own costs and orders it to pay the costs incurred by Mr Verile and by Ms Gjergji.
Van Raepenbusch | Rofes i Pujol | Perillo |
Delivered in open court in Luxembourg on 11 December 2013.
W. Hakenberg | | S. Van Raepenbusch |