JUDGMENT OF THE GENERAL COURT (First Chamber)
5 December 2017 (*)
(Civil service — Officials — Pensions — Transfer of national pension rights — Capital appreciation between the date of the application for a transfer and the actual date of the transfer)
In Case T-728/16,
Sabine Tuerck, official of the European Commission, residing in Woluwe-Saint-Pierre (Belgium), represented by S. Orlandi and T. Martin, lawyers,
applicant,
v
European Commission, represented by G. Gattinara and L. Radu Bouyon, acting as Agents,
defendant,
ACTION brought under Article 270 TFEU, seeking annulment of the Commission’s decision of 10 December 2015 confirming the transfer to the European Union pension scheme of pension rights acquired by the applicant prior to her entry into the service of the Union,
THE GENERAL COURT (First Chamber),
composed of I. Pelikánová, President, V. Valančius (Rapporteur) and U. Öberg, Judges,
Registrar: M. Marescaux, Administrator,
having regard to the written part of the procedure and further to the hearing on 3 October 2017,
gives the following
Judgment
Background to the dispute
1 The applicant, Ms Sabine Tuerk, entered the Service of the European Union on 1 March 2004. Pursuant to Article 11(2) of Annex VIII to the Staff Regulations of Officials of the European Union (‘the Staff Regulations’), the applicant applied, by letter of 27 May 2010, for a transfer to the Union pension scheme of pension rights which she had acquired prior to entering the service of the Union. On the date when that application was made, the applicant was classified in grade AD 11, step 5.
2 On 30 June 2010, the Office for administration and payment of individual entitlements (PMO) acknowledged receipt of the applicant’s application.
3 On 26 November 2010, the applicant was promoted to grade AD 12, step 1, with effect from 1 January 2010.
4 On 29 April 2013, the PMO approved the application as validly made and forwarded it to Deutsche Rentenversicherung Bund (a German federal pension insurance body; ‘the DRV’).
5 By letter of 5 May 2015, the DRV responded indicating that the transferable capital representing the pension rights previously acquired by the applicant amounted, as at the date of the application for a transfer, 27 May 2010, to EUR 141 652.07.
6 On 22 June 2015, the PMO made an offer to the applicant to credit her with pensionable years corresponding to the transfer of the pension rights she had acquired with the DRV prior to her entry into the service of the European Commission (‘the offer to credit pensionable years’). In this regard, on the basis of the DRV’s provisional figure for the total amount of capital, which was EUR 141 652.07, if the applicant accepted the offer to credit pensionable years, the transfer of her pension rights under Article 11(2) of Annex VIII of the Staff Regulations would have given rise, in accordance with the parameters applicable on the date of her application for a transfer, 27 May 2010, and having regard to her age, function group and grade and step on that date, to a credit of a contribution period of 3 years, 8 months and 29 days.
7 On 30 June 2015, the applicant accepted the offer to credit pensionable years.
8 On 10 December 2015, the PMO notified the applicant of the decision crediting her with years of pensionable service (‘the contested decision’) following the actual transfer, pursuant to Article 11 of Annex VIII to the Staff Regulations, of the capital representing the pension rights she had acquired with the DRV before entering the service of the Union, and having regard to the general implementing provisions for Articles 11 and 12 of Annex VIII to the Staff Regulations, adopted by Commission Decision C(2011) 1278 of 3 March 2011, published in Administrative Notices No 17-2011 of 28 March 2011 (‘the GIP’). Under the terms of that decision, the transfer of the applicant’s pension rights had given rise to a credit of a contribution period of 3 years and 4 months. The PMO had arrived at that result by deducting, from the capital sum of EUR 146 714.33 actually transferred by the DRV, simple interest of 3.1% per year in respect of the period between the date of the application for a transfer and the date of the actual transfer, or in other words an amount representing capital appreciation of EUR 20 666.28 between those dates. The PMO had thus concluded that the amount representing the pension rights previously acquired by the applicant amounted, for the purposes of determining the pensionable years to be credited, to EUR 126 048.05.
9 On 9 March 2016 the applicant lodged a complaint against the contested decision. That complaint was rejected by decision of 5 July 2016.
Procedure and forms of order sought
10 By application lodged at the Court Registry on 14 October 2016, the applicant brought the present action.
11 The applicant claims that the Court should:
– annul the contested decision;
– order the Commission to pay the costs.
12 The Commission contends that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
13 On 30 June 2017, by way of measures of organisation of procedure under Article 89(3) of the Rules of Procedure, the General Court invited the parties to lodge written submissions on certain aspects of the proceedings. They complied with those requests within the specified time limits.
14 On 27 July 2017, by way of measures of organisation of procedure under Article 89(3) of the Rules of Procedure, the General Court invited the applicant to contact the DRV and ask it to provide a document confirming the amount of the pension rights which she had acquired under the German scheme as at 27 May 2010, and explaining the reasons why there was a difference between that amount and the amount actually transferred to the Commission on 11 September 2015.
15 The applicant responded to the Court’s request by letter of 25 September 2017, attaching a letter of 13 September 2017 from the DRV.
Law
16 In support of her action, the applicant relies on two pleas in law, the first alleging breach of Article 7(1) of the GIP, and the second breach of Article 11(2) of Annex VIII of the Staff Regulations.
17 In support of her first plea, the applicant essentially argues that the PMO was not justified in deducting from the capital transferred by the DRV, as it did, simple interest of 3.1% per year in respect of the period between the date on which the application for a transfer was made and the date of the actual transfer. In this regard, the applicant maintains that, under Article 7(1) of the GIP, a ‘lump-sum’ deduction of the amount representing capital appreciation between the date of the application for a transfer and the date of the actual transfer can only be made where the body with which the prior pension rights have been acquired is not able to supply the value of the pension rights as at the date on which the application is registered. According to the applicant, however, by letter of 5 May 2015, the DRV did supply the PMO with the value of her pension rights as it stood on the date of the application for a transfer, namely 27 May 2010.
18 The Commission replies that the DRV did not provide any indication as to the composition of the updated amount actually transferred, making it impossible to distinguish between the capital representing the pension rights acquired by the applicant as they stood on the date of registration of the application for a transfer, on the one hand, and the appreciation of that capital on the other. Furthermore, the Commission argues that, in order to ensure that the procedure for transfer of pension rights is implemented in an objective manner, it is necessary for the parameters used to be uniform, capable of being applied to any transfer.
19 In this regard, it should be observed that, under the first subparagraph of Article 11(2) of Annex VIII to the Staff Regulations, 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 after pursuing an activity in an employed or self-employed capacity, is entitled, after establishment but before becoming eligible for payment of a retirement pension within the meaning of Article 77 of the Staff Regulations, 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.
20 The second subparagraph of Article 11(2) of Annex VIII to the Staff Regulations provides that in such case the appointing authority (‘AA’) of the institution in which the official serves is, taking into account the official’s basic salary, age and exchange rate at the date of application for a transfer, to 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.
21 The first subparagraph of Article 7(1) of the GIP provides that the number of pensionable years to be taken into account is to be calculated on the basis of the transferable amount of rights acquired during the periods referred to in the first subparagraphs, respectively, of Article 5(1) and (2) thereof, minus the amount of capital appreciation between the date on which the transfer application is registered and the date of the actual transfer.
22 The second subparagraph of Article 7(1) of the GIP provides, essentially, that 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.
23 It is thus apparent from the clear and precise wording of the provisions referred to in paragraphs 19 to 22 above that decisions crediting pensionable years are based on the amount of transferable capital as at the date of registration of the application, as supplied to the AA by the competent national or international authorities, after deduction, where applicable, of an amount representing capital appreciation between the date of the application for a transfer and the date of the actual transfer. It is also apparent from that wording that it is only where the competent national or international body is unable to supply the value of the pension rights as at the date of registration of the application that simple interest at the rate of 3.1% is deducted from the updated capital actually transferred. Thus, in a situation where the competent national or international authorities have supplied the AA with the value of the pension rights as at the date of registration of the application, the AA 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.
24 As to the determination by the competent national or international authorities of the value of the pension rights acquired as at the date of registration of the application, it is settled case-law that that operation falls within the sole competence of the authority administering the pension scheme with which the interested person was insured before he entered into the service of the European Union, such an operation determining the capital value of pension rights acquired in the national scheme under the relevant legislation of the Member State concerned (see judgment of 5 December 2013, Časta, C‑166/12, EU:C:2013:792, paragraph 29 and the case-law cited). Furthermore, it is also apparent from the case-law that Member States enjoy broad discretion in adopting their national legislation implementing Article 11(2) of Annex VIII to the Staff Regulations (judgment of 5 December 2013, Časta, C‑166/12, EU:C:2013:792, paragraph 31).
25 In the present case, it is apparent from the contested decision that, on 11 September 2015, the DRV transferred an updated capital sum of EUR 146 714.33 to the Commission. The PMO deducted simple interest from that capital sum, at 3.1% per year, in respect of the period between the date of the application for a transfer and the date of the actual transfer, which is to say that it deducted an amount of EUR 20 666.28 representing capital appreciation between the date of the application and the date of the actual transfer. The PMO therefore took the view that the amount representing the pension rights previously acquired by the applicant was EUR 126 048.05.
26 By letter of 5 May 2015, however, the DRV had supplied the PMO with what it regarded as the provisional calculation of the transferable amount as at the date of registration of the application. According to that letter, the transferable amount as at 27 May 2010 was EUR 141 652.07, of which EUR 340.22 was interest.
27 That figure for the transferable amount as at the date of registration of the application formed the basis for the offer to credit the applicant with years of pensionable service, made on 22 June 2015.
28 It is also apparent from the material on the file that, at the applicant’s request, the DRV confirmed to her, by letter of 4 February 2016, that the transferable amount as at the date of registration of the application for a transfer, 27 May 2010, was EUR 141 652.07, made up of EUR 141 311.85 in respect of pension rights acquired by the applicant up to that date, and EUR 340.22 in respect of interest.
29 That information was reconfirmed by the DRV in its letter of 13 September 2017, which was sent to the applicant following the measure of organisation of procedure referred to in paragraph 14 above.
30 Thus, first, it is clear that the DRV did supply the value of the pension rights acquired as at the date of registration of the application, namely 27 May 2010. Accordingly, the Commission cannot legitimately argue, as it seeks to do, that it was impossible for it to distinguish, looking at the updated amount of capital actually transferred, between the amount representing the pension rights acquired by the applicant up to the date of registration of the application for a transfer, on the one hand, and the amount representing appreciation of that capital between the date of the application for a transfer and the date of the actual transfer, on the other.
31 Secondly, in relation to the Commission’s calculation of the number of years of pensionable service to be taken into account within the Union pension scheme, which is a separate calculation from that of the capital representing the acquired pension rights, as is apparent from paragraph 24 above, it should be noted that neither Article 11(2) of Annex VIII to the Staff Regulations, nor any other provision of those regulations, expressly lays down any obligation to deduct, from the updated capital actually transferred, the 3.1% interest referred to in Article 8 of that same annex. It follows that the Commission’s argument that, essentially, the second subparagraph of Article 11(2) of Annex VIII to the Staff Regulations requires the PMO, in all cases, to ‘update’ the capital representing the value of the pension rights acquired as at the date of registration of the application, is not based on any provision of the regulations. The only deduction required by the regulations is that of the amount representing capital appreciation between the date of the application for a transfer and the actual date of transfer of the capital updated to that date. In any event, it is not for the Commission to determine, or as it asserts, ‘update’ the concrete amount of capital representing the pension rights acquired, as at the date of registration of the application for a transfer, by virtue of the previous activities of the official in question.
32 Thirdly, it should be emphasised that, contrary to the Commission’s argument, Article 7(1) of the GIP does not permit it to deduct interest where, as in the present case, the competent national or international body has not been unable to supply the value of the acquired pension rights as it stood on the date of registration of the application. To permit the Commission to make a deduction, to the advantage of the Union budget, from the capital representing the pension rights acquired by the applicant as at the date of registration of the application for a transfer, would lead to an unjustified appropriation by that institution of a portion of the national pension rights converted into a cash sum for the purposes of the transfer, which rights belong to the official under the case-law. It would thus lead to unjustified enrichment of the Union.
33 It should be pointed out, furthermore, that it is apparent from the material on the file and the explanations provided by the applicant at the hearing that the difference of EUR 5 062.26 between the transferable amount of the pension rights acquired under the German scheme as at 27 May 2010, supplied by the DRV to the Commission on 5 May 2015, and the amount actually transferred to the Commission on 11 September 2015, which reflects capital appreciation between the date of the application and the actual date of transfer, arises from an agreement on the implementation of Article 11 of Annex VIII of the Staff Regulations which was concluded between the Federal Republic of Germany and the Commission in 1994. Under that agreement, the competent German pension body is required to add 3.5%, per full year, to the amount which is retroactively made available to it by the national authorities, for the period from the date on which the funds in question were transferred to that body to the date of the transfer by that body to the EU pension scheme. Thus, in the present case, the amount of EUR 5 062.26 is the result of applying the rate of 3.5% per full year to the amount which was made available to the DRV in two stages, more specifically on 13 May 2014 and 30 July 2014, then transferred by that body to the Commission on 11 September 2015.
34 It follows from all of the foregoing that in making a deduction, from the updated capital actually transferred, of simple interest at 3.1% per year in respect of the period between the date on which the application for transfer was made and the date of the actual transfer, even though, in the particular circumstances of the present case, the DRV had not been unable to supply the value of the pension rights acquired by the applicant as at the date of registration of her application, the Commission erred in law.
35 Having regard to all of the foregoing, it being unnecessary to consider the merits of the applicant’s second plea, the present action must succeed and the contested decision must be annulled.
Costs
36 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has been unsuccessful, it must, in accordance with the form of order sought by the applicant, be ordered to pay the costs.
On those grounds,
THE GENERAL COURT (First Chamber)
hereby:
1. Annuls the decision of the European Commission of 10 December 2015 confirming the transfer to the European Union scheme of the pension rights acquired by Ms Sabine Tuerk prior to her entry into the service of the Union;
2. Orders the Commission to pay the costs.
Pelikánová | Valančius | Öberg |
Delivered in open court in Luxembourg on 5 December 2017.
[Signatures]