ECJ clarifies when contribution periods of the host state are to be considered when calculating benefits.

In its judgement (C-866/19) of 21 October 2021, the ECJ ruled that the respective Member State must take into account all insurance periods relevant under pension law, including those completed in other European Member States. However, the pro rata benefit shall be exclusively calculated for the insurance periods completed under the legislation of the Member State concerned. The same applies to the determination of the limit of non-contributory periods – in this form, a special feature of Polish pension insurance law.

The facts

The petitioner, who had completed insurance periods relevant under pension law in both Poland and the Netherlands, contested the calculation of his retirement pension to be granted by Zakład Ubezpieczeń Społecznych (ZUS) pursuant to Article 52 para. 1 of Coordination Regulation (EC) No. 883/04. He appealed against the calculation made, arguing that the non-contributory periods completed under Polish law should be taken into greater account when calculating his pension. In this regard, he argued that the ECJ had already held in the Tomaszewska case (C-440/09) that all insurance periods, including those in other EU Member States, must be taken into account when determining the periods required for pension entitlement, in particular with regard to the limit for non-contributory periods specific to Poland.

ZUS filed a cassation appeal against the annulment of the pension decision to the Polish Supreme Court. It concluded that Article 52 para. 1 sub-para. b of Regulation (EC) No. 883/2004 could be interpreted in three different ways:

1. Only Polish insurance periods are taken into account for determining the non-contributory periods to be considered.

2. Contribution periods from other EU Member States are taken into account and a theoretical pension amount is calculated for the non-contributory periods. However, the pro rata temporis principle applies. The non-contributory periods actually included in the benefit calculation are then calculated as under 1.

3. All national and European contribution periods are taken into account both for the calculation of the maximum limit of non-contributory periods to be taken into account and for the actual inclusion in the calculation of benefits. National and European contribution periods are, therefore, always to be regarded as fully equivalent.

The proceedings were stayed in order to refer the matter to the ECJ for a preliminary ruling.

ECJ remains prudent

The ECJ stated that the principle of aggregation of all periods must be applied when calculating the theoretical pension amount to which the person would be entitled if he or she had completed all insurance periods in Poland. This also applies to the calculation of the maximum limit of non-contributory periods in relation to the contribution periods stipulated under Polish law and is aimed at preventing disadvantages for mobile workers. The principle of aggregation does not apply to the calculation of the actual pension amount on the basis of the theoretical pension amount and the ratio of the insurance and residence period under Polish law to the total insurance period as this would artificially increase the amount payable by Poland

Therefore, Article 52 para. 1 sub-para. b of Regulation (EC) No. 883/2004 must be interpreted as meaning that only the periods completed under national legislation are to be taken into account for calculating the actual amount. Consequently, the maximum limit for taking into account non-contributory periods in Poland does not apply.

Conclusions

In the future, national legislation providing for such a maximum limit for consideration of non-contributory periods may have to be repealed. However, this is irrelevant for the German pension insurance since national law does not recognise such maximum limits for the consideration of non-contributory periods.