Transfer “IN” of pension rights: favourable judgment!
Transfer “IN” of pension rights – judgment of 15 May 2019 Tuerck v Commission
TRANSFER “IN” OF PENSION
RIGHTS:
Impact of the time elapsed
on the calculation of the period of pensionable service. The application of the
standard interest rate by the Commission may result in unlawful enrichment to
the detriment of the staff
On 15 May 2019 the Court confirmed the judgment of the General
Court of 5 December 2017 in the case of Tuerck v Commission (C-132/18 P) which clarified important aspects of the
transfer IN of pension rights acquired before entering the service of the
European Union.
R&D follows closely the developments of the case law in the field of
pension rights. This case, successfully defended by our lawyers, Mr Orlandi and
Mr Martin, was among the many which were discussed during the conference on
pension rights R&D organised in March 2019 (link).
The facts
The applicant requested the transfer of the capital value of
pension rights she had acquired prior to entering the service of the European
Union. Five years later, the German authority informed the PMO that the amount
of transferable capital corresponding to her acquired pension rights was
EUR 141 652.07.
PMO made an offer to the applicant, assessing the additional
pensionable years under the EU pension scheme at 3 years, 8 months
and 29 days. She accepted.
The German authority transferred an updated capital sum of
EUR 146 714.33. 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 those dates. The PMO therefore took the view that the amount
representing the pension rights previously acquired by the applicant was
EUR 126 048.05, and reduced the additional years to 3 years and 4
months.
The judgment
On 5 December 2017 the General Court annulled the contested
decision, holding that under the Staff Regulations the PMO is not required to
‘update’ the transferred capital in all cases by applying the standard interest
rate.
In particular, Article 11, paragraph 2 of Annex VIII of the Staff
Regulations and Article 7(1) of the GIP do not allow the Commission to
make a calculation of the additional pensionable years on the basis of an
amount lower than that which was available at the time of the registration of
the transfer request and which was communicated to the PMO by the national
authority.
According to the Court, 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, and hence, to an unlawful enrichment of the Union.
On 15 May 2019 the Court fully upheld the judgment of the General
Court, holding that a situation of unjust enrichment would arise if the actual
amount of the appreciation of the pension rights acquired by a given official
is lower than the amount resulting from the application of the standard
interest rate of 3.1% intended by the Commission.
It confirmed 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% can be deducted from the updated capital actually transferred to the
Commission.
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