Report for the Hearing delivered in Case 130/87

I — Facts and written procedure

Article 11(2) of Annex VIII to the Staff Regulations provides as follows:

‘An official who enters the service of the Communities after leaving the service of a government administration or of a national or international organization or of an undertaking shall have the right, on becoming established with that Community, to pay to it either: (i) the actuarial equivalent of retirement pension rights acquired by him in the government administration, national or international organization or undertaking; or (ii) the sums repaid to him from the pension fund of the government administration, organization or undertaking at the date of his leaving its service. In such case, the institution in which the official serves shall, taking into account his grade on establishment, determine the number of years of pensionable service with which he shall be credited under its own pension scheme in respect of the former period of service, on the basis of the amount of the actuarial equivalent or sums repaid as aforesaid.’

Articles 64 and 65 of the Luxembourg Law of 29 August 1951 on pension insurance for employees in the private sector provide as follows :

‘Where the insured, after having paid contributions for at least 30 months, leaves the insurance scheme without qualifying for a pension, he shall be entitled to the surrender value of those contributions provided that he does not claim the continued insurance provided for under this law and desists from any occupation subject to social insurance in the Grand Duchy or in any foreign country with which there is a social insurance agreement governing the maintenance of rights in the process of acquisition. Where the insured has received the surrender value of his pension he loses any entitlement to benefits from the Pension Fund. If he later becomes liable to pay insurance, the period during which he paid contributions the surrender value of which he has received may not be taken into account.’

Under Article 66 of that law the surrender value must be claimed within two years from the day when the last contribution was due, otherwise the claim is barred.

Article 18 of the Luxembourg Law of 16 December 1963 on coordination of pension schemes, as amended by Article 7 of the Law of 14 March 1979, provides as follows:

‘When a person transfers from a Luxembourg contributory pension scheme to the pension scheme of an international organization which provides for the buying-up of pension rights acquired during periods of employment prior to establishment, contributions paid to the Luxembourg pension scheme shall be transferred upon request by the employed person to the pension scheme of the international organization, including interest of 4% per annum from 31 December of each year of membership.’

Article 21 of that law, which governs periods completed under schemes providing for reimbursement of contributions, stipulates that the right to reimbursement may not be exercised when the insured is affiliated to one of the schemes covered by that law.

The plaintiff in the main proceedings is a Commission official in Brussels. Prior to his establishment on 5 February 1962 he had been employed in the private sector in Luxembourg and had acquired pension rights after being affiliated for 61 months to the Caisse de pension des employés privés (Pension fund for private employees), the defendant in the main proceedings, (hereinafter referred to as ‘the Fund’).

On 1 April 1964 the plaintiff in the main proceedings requested the Fund to reimburse him half of the contributions which had been credited to his account. In his request the plaintiff in the main proceedings declared that he had given up all employment subject to social insurance in the Grand Duchy and acknowledged that, consequent upon the reimbursement requested, the period in respect of which he had paid the contributions concerned could no longer count towards a pension. Subsequently, a sum of LFR 29269 was paid to the plaintiff in the main action since the total sum credited to his account with the Fund was LFR 58536.

On 4 February 1983 the plaintiff in the main proceedings requested the Fund to annul the procedure which had taken place in 1964 and to revive his pension rights upon repayment to the Fund of the sum reimbursed to him in 1964 together with interest. On 15 March 1983 the Fund refused his request. The plaintiff in the main proceedings appealed against that decision to the conseil arbitral des assurances sociales (Social Security Arbitration Board) which dismissed his appeal on 16 November 1983. That judgment was confirmed on appeal by a decision of the conseil supérieur des assurances sociales (Social Security Appeals Board) of 14 November 1984, which in its turn was quashed by the Cour de cassation on 14 November 1985. Upon rehearing the case, the conseil supérieur des assurances sociales declared, in a judgment of 2 July 1986, that the reimbursement of contributions which had taken place in 1964 was null and void and that the plaintiff in the main proceedings was entitled to request the Fund to reactivate his pension rights as they stood in 1964.

The Fund appealed to the Cour de cassation against that judgment. By order of 9 April 1987 the Cour de cassation decided to stay the proceedings and to refer to the Court of Justice the following question for a preliminary ruling under Article 177 of the EEC Treaty:

‘Is Article 11(2) of Annex VIII to the Staff Regulations of Officials and Other Servants of the European Communities to be interpreted as meaning that from its entry into force on 1 January 1962 it conferred on ECSC officials a direct right to have their pension rights transferred from a national pension scheme to the Community pension scheme, subject to the conditions set out in the aforesaid Article 11(2), and may that Community provision therefore be considered to have been integrated as from 1 January 1962, so far as the right to call for such a transfer is concerned, into national legislation on pension schemes and in particular into the ancillary legislation on the coordination of different pension schemes?’

The order making the reference was received at the Court Registry on 21 April 1987.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted by the plaintiff in the main proceedings, represented by Georges Margue, avocat-avoué in Luxembourg, by the defendant in the main action, represented by Fernand Entringer, avocat-avoué in Luxembourg, by the Commission of the European Communities, represented by its Principal Legal Adviser, Henri Etienne, acting as Agent, by the Government of the Grand Duchy of Luxembourg, represented by G. Schroeder, of the Ministry of Social Security, and by the United Kingdom, represented by S. J. Hay of the Treasury Solicitor's Department.

On hearing the Report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.

II — Written observations submitted to the Court

The plaintiff in the main proceedings stresses that Community law takes precedence over national law and that Community regulations are directly applicable. Since the Court of Justice has confirmed that the Staff Regulations are binding in their entirety and directly applicable in all Member States, the plaintiff in the main proceedings proposes that the Court should answer the preliminary question in the affirmative.

The Fund submits that, although Community regulations are binding and have direct effect, an individual may only rely on a provision of a regulation before a national court if the rule in question is directly applicable. In the opinion of the Fund it is apparent from the judgment of the Court of 20 October 1981 in Case 137/80 Commission v Belgium [1981] ECR 2393 that the plaintiff in the main action had no right flowing from the Staff Regulations of which he could avail himself before a national court when the Luxembourg legislature had not legislated on the matter, in other words before the Law of 14 March 1979 entered into force.

The Fund therefore suggests that the following response should be given to the question referred to the Court: Article 11(2) of Annex VIII to the Staff Regulations does not confer on individuals any directly enforceable rights in respect of national social security in connection with the application of that provision in so far as the national authorities have not adopted the provisions necessary to harmonize national law with the Community regulation concerned.

The Government of the Grand Duchy of Luxembourg submits that only the national legislature has the power to fix the detailed rules necessary to accomplish the transfer of pension rights and thus the official cannot rely on Community law alone.

The United Kingdom considers that the essence of the question referred to the Court is whether Article 11(2) of Annex VIII to the Staff Regulations must be interpreted as having created a directly enforceable right to transfer an official's pension rights from a national pension scheme to the Community pension scheme.

The United Kingdom considers that the provision concerned is directly applicable in each Member State and that no national legislation is necessary to achieve that direct effect. The United Kingdom refers in particular to the judgment of the Court of 20 October 1981 cited above.

As to the scope of Article 11(2) of Annex VIII of the Staff Regulations, in particular the type of the pension schemes concerned, the United Kingdom argues that direct applicability can only extend to occupational schemes and not to national general social security schemes. Pension rights are only capable of being transferred within a pension scheme based on the employment of the pensionable person.

The United Kingdom therefore suggests that the question referred should be answered as follows:

‘Article 11(2) of Annex VIII to the Staff Regulations confers upon officials transferring their employment to a Community institution a direct right to have their pension rights transferred, from the pension fund of the government administration, national or international organization or undertaking by which they were formerly employed, to the appropriate Community scheme.’

The Commission states that in its view the essence of the question referred by the Cour de cassation is whether Article 11(2) of Annex VIII of the Staff Regulations precludes the sort of reimbursement of contributions made to the plaintiff in the main action.

In this respect the Commission points out that the contributions reimbursed do not correspond to the contributions paid as defined by the Luxembourg Law of 14 March 1979 or to the ‘sums repaid’ as provided for by the Staff Regulations. The Commission considers that Community law does not prevent an official from abandoning insurance rights existing under national law. However, under the Luxembourg legislation it is not possible to abandon pension rights by simple reimbursement of the contributions when those contributions may be transferred to another scheme.

The Commission also notes that although the Staff Regulations do not prohibit the abandonment of rights under a national insurance scheme, Community law does preclude a situation in which it is impossible for an official to exercise, upon his establishment, the option made available to him by Article 11(2) of Annex VIII to the Staff Regulations. This would be the situation every time a national scheme obliged an official to abandon his rights under the national scheme, as in this case. The plaintiff in the main action was obliged to accept the surrender value of his pension because of the legal position obtaining at that time, since Luxembourg law prevented the buying-up of contributions if that right was not invoked within two years of the last payment of contributions.

Since Luxembourg law had not offered conditions of transfer compatible with the Staff Regulations, the conditions for the exercise of the option which the Staff Regulations granted the official at the time of his establishment were not fulfilled. The time-limit for a reimbursement of contributions paid which did not guarantee the individual concerned the possibility of postponing the decision whether to transfer was not compatible with Article 11(2) of Annex VIII to the Staff Regulations.

The Commission therefore suggests that the following reply should be given to the question referred:

‘Article 11(2) of Annex VIII to the Staff Regulations must be interpreted as precluding, from its entry into force on 1 January 1962, the application to an official of any national rules impeding him from exercising the option granted to him by the Staff Regulations of requesting the transfer of his pension rights to the Communities.’

III — Oral procedure

At the sitting on 3 May 1988, the Court (Sixth Chamber) heard oral argument from the participants in the proceedings. The Advocate General delivered his Opinion on 5 July 1988. In his Opinion he raised a point concerning the effect of Article 11(2) of Annex VIII to the ECSC Staff Regulations which were issued by the Committee of the Presidents of the ECSC and entered into force on 1 January 1962. Those ECSC Staff Regulations were never published in the Official Journal.

Since the question referred to the Court concerned the legal effects of the ECSC Staff Regulations and the fact of its non-publication in the Official Journal had not been considered by the parties to the main proceedings, the Governments of the Member States or the Commission, the Court (Sixth Chamber) decided on 4 October 1988, in accordance with Article 61 of the Rules of Procedure and after hearing the Advocate General, to order that the oral procedure be reopened.

By decision of the Court of 7 October 1988 the case was retained before the Sixth Chamber.

M. Diez de Velasco

Judge-Rapporteur

1 Language of the case: French.