C-244/97

I — Factual and legal context of the main 3. Ms Gerdina Lustig (hereinafter 'the appli­ proceedings cant') was born on 15 January 1929. She worked in the Netherlands from 1946 to 1968 and in Belgium from 1970 to 1988. Had these periods of employment been spent entirely in Belgium, they would have constituted a com­ plete career for the purposes of the Laws of 1980 and 1981. When she attained the age of 60, the Rijksdienst voor Pensioenen (the National Pensions Office, hereinafter 'the 2. Retirement pensions are normally awarded defendant') granted the applicant, as from under Belgian law on the basis of the earn­ 1 February 1989, a Belgian retirement pen­ ings of the retired person during his working sion of BFR 106 834 under the normal regime life. However, in order to avoid the grant of for employed persons, based on her 19 years very low pensions to retired persons who of employment in Belgium. The sum granted were engaged in low-income employment, was 19/40 of that which would have been Belgian law provides for a graduated minimum awarded to her under the normal regime on rate of public retirement pension for employed persons who retire following a complete

1 — Article 152, Law of 8 August 1980, Belgisch Staatsblad of 15 August 1980. 2 — Article 33, Law of 10 February 1981, Belgisch Staatsblad of * Original language: English. 14 February 1981.

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OPINION OF MR FENNELLY — CASE C-244/97

6. The national court has referred the fol­ lowing question to the Court for a prelimi­ nary ruling pursuant to Article 177 of the Treaty establishing the European Community (hereinafter 'the Treaty'): 5. The applicant sought from the defendant, in respect of the period from 1989 to 1994, payment of an equivalent level of pension, to

3 — OJ, English Special Edition 1971 (II), p. 416. This case relates to the version amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983, OJ 1983 L 230, p. 6, and as further amended by Council Regulation (EEC) No 1248/92 'Is Article 49(1 )(b)(ii) of Regulation of 30 April 1992, OJ 1992 L 136, p. 7, and by Council Regu­ No 1408/71 in conjunction with Article 45 of lation (EC) No 3096/95 of 22 December 1995, OJ 1995 L 335, p. 10. that Regulation to be interpreted as meaning

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7. Article 45 of Regulation No 1408/71 estab­ lishes the principle of aggregation of periods of insurance or of residence in different Member States for the purposes of acquiring a right to a retirement pension. When deter­ mining whether to grant a retirement pen­ '(1) If, at a given time, the person concerned sion, the competent national authority takes does not satisfy the conditions laid down for account of periods of insurance or residence the provision of benefits by all the legisla­ in other Member States as if they were spent tions of the Member States to which he has under the legislation which it applies. Arti­ been subject, taking into account where appro­ cle 46 of Regulation No 1408/71 sets out the priate the provisions of Article 45, but satis- method by which the amount of the retire­ ment pension is calculated, even in cases where the retiree has a right to a pension under 4 — Article 46(1) of Regulation No 1408/71. national law alone without recourse to the 5 — Article 46(2) of Regulation No 1408/71. aggregation provisions in Article 45. The com­ 6 — Formerly the second indent of Article 46(1) of Regulation petent authority first calculates the 'indepen­ No 1408/71; Article 46(3) of that Regulation, after the entry into force of Regulation No 1248/92. dent amount' — the amount of benefit pay­ 7 — Loc. cit.

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fies the conditions of one or more of them (2) The benefit or benefits awarded under only, the following provisions shall apply: one or more of the legislations in question, in the case referred to in paragraph 1, shall be recalculated automatically in accordance with the provisions of Article 46, as and when the conditions required by one or more of the other legislations to which the person con­ (a) each of the competent institutions admin­ cerned had been subject are satisfied, taking istering a legislation whose conditions are into account as appropriate the provisions of satisfied shall calculate the amount of the Article 45.' benefit due, in accordance with the provi­ sions of Article 46;

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ment are not satisfied may result in higher (b) however: levels of benefit in certain situations, to be determined, under the legislations for which the conditions are satisfied; whereas it there­ fore appears useful to supplement Article 49(1)(b)(i) and (ii) in order to permit such periods to be taken into account when it results in the person concerned receiving a higher level of benefit.' (i) if the person concerned satisfies the conditions of at least two legislations without having recourse to periods of insurance or residence completed under the legislations whose con­ ditions are not satisfied, these periods shall not be taken into account for Article 49(1) as so amended now reads, in rel­ the purposes of the provisions of evant part, as follows: Article 46(2) unless taking account of the said periods makes it possible to determine a higher amount of benefit;

III — Observations person does not satisfy simultaneously the conditions — such as, in this case, that regarding age — imposed for award of a pen­ sion by all the systems to which he has been subject, the amount of pension is calculated solely by reference to the legislation whose conditions are satisfied, taking account solely 9. Written and oral observations were sub­ of periods spent subject to this legislation; mitted by the defendant and the Commis­ that is, in the present case, periods spent in sion. In addition, the Kingdom of Belgium employment in Belgium. This, it is said, is the presented written observations and the United clear literal meaning of the terms of Article 49; Kingdom of Great Britain and Northern Ire­ it would be in breach of the principle of legal land presented oral observations. certainty to attribute to them the qualified meaning contended for by the Commission. The amendment effected by Regulation No 3096/95 cannot, therefore, be construed as being merely clarificatory in nature, nor was it understood as such by the Community 10. All of the parties which have submitted legislator; furthermore, if the Commission observations contend that the graduated min­ were correct, the amendment would be super­ imum public retirement pension is not a dis­ fluous. The United Kingdom also places con­ tinct benefit, the conditions for the grant of siderable emphasis on the judgment in which would be subject to Article 45 of Regu­ McLachlan, in which, in its view, the Court lation No 1408/71, and that, on the contrary, interpreted Article 49 as prohibiting a Member the criterion of a complete career in Belgium State from taking into account, for the pur­ constitutes an additional means of calculating poses of calculating the amount of a retire­ the amount of a Belgian retirement pension, ment pension, periods of insurance or resi­ which is subject to, inter alia, Articles 46 and dence in other Member States whose 49 of that Regulation. The applicant does not conditions for grant of such a pension are not need to invoke Article 45 of Regulation satisfied. 11 No 1408/71 in order to be granted a pension under Belgian law, although, of course, she receives a pension lower than the corre­ sponding fraction of the minimum public retirement pension.

cle 51 of the Treaty and given effect by Arti The amendment of Article 49 to this effect, cles 45 and 46 of Regulation No 1408/71, is a introduced by Regulation No 3096/95, must, fundamental principle of Community social therefore, be construed merely as a clarifica security law, designed to ensure that migrant tion of the existing scope of application of workers do not lose social security advan that provision. The agent for the Commission tages guaranteed to them by the laws of the stated at the hearing that the amendment was Member States as a result of the exercise of proposed and made retroactive to 1 June 1992 their right to freedom of movement, in the as a response to what it deemed to be an light of which all the provisions of the Regu incorrect interpretation of Article 49, by at 12 least one Member State, dating from the exten lation should be interpreted.

It seems dance with Article 46 where this would result clear that the Laws of 1980 and 1981 simply in a higher amount of benefit for the retiree. introduced an additional calculation rule, establishing a favourable rate for certain retired persons in receipt of very low retirement pensions, entitlement to which is determined in the first place according to different rules. However, it is worth bearing in mind, when determining whether the principle of aggrega 12 — Case C-406/93 Reichling vINAMI [1994] ECR I-4061, tion should be applied to the calculation of paragraphs 21 and 24 (hereinafter 'Reichling'); Case C-165/91 Van Munster v Rijksdienst voor Pensioenen [1994] the amount of benefit payable to the appli ECR I-4661, paragraph 27; Case C-481/93 Moscato v Bestuur van de Nieuwe Algemene Bedrijfsvereniging [1995] cant, that the present case concerns a rule ECR I-3525, paragraphs 27 and 28; Case C-482/93 Klaus v Bestuur van de Nieuwe Algemene Bedrijfsvereniging [1995] regarding admission to a distinct class of pen ECR I-3551, paragraph 21 (hereinafter 'Klaus'). sion recipients, who benefit from the applica 13 — Case 24/75 Petroní v ONPTS [1975] ECR 1149, para tion of a graduated minimum scale.

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OPINION OF MR FENNELĽY — CASE C-244/97

14 — This provision is at issue in Case C-132/96 Stinco and Pan­ filo v INPS, in which judgment is due on 24 September 1998. 15 — Until the conditions of the Netherlands legislation were sat­ isfied, only periods in Belgium would be taken into account for payment of benefit, although the applicant's career in the 14. For the avoidance of doubt, I should also Netherlands would be used for the purposes of reaching the state at this stage that I do not think that threshold of two thirds or more of a complete career in Bel­ gium for the application of the Belgian graduated minimum Article 50 of Regulation No 1408/71 is of rel­ pension regime.

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RIJKSDIENST VOOR PENSIOENEN v LUSTIG

18 working career in France. It was in this 15. Before proceeding to analyse how, in gen context that the Court made the statement, eral, Article 49 of Regulation No 1408/71 which is invoked in particular by the United should be interpreted in the light of Article 51 Kingdom, that '[t]he taking into account by of the Treaty, I wish to determine the precise [national legislation whose conditions are sat import of the Court's judgment in isfied] of periods completed under the legisla

ings. Persons over 60 who have more than In these circumstances, the independent amount should have been awarded irrespective of whether Article 46, and in par 150 quarterly periods of insurance may not ticular its present section 3, or Article 49, of Regulation No 1408/71 were applicable. However, Advocate Genera! receive unemployment benefit in France, but Lenz states at paragraph 4 of his Opinion in McLachlan that receive instead an old-age pension. The appli the applicant was allocated a pension which amounted to approximately two thirds of a full pension, to which he cant in that case was made redundant at the would have been entitled if he had completed 150 quarterly periods under the French system, which suggests that he age of 61 years and was allocated an old-age may only have received the pro rata amount from the French authorities; he implicitly acknowledges this at paragraph 21 pension, his periods in both France and the of his Opinion. United Kingdom being taken into account in 18 — The exact nature of the applicant's claim in McLachlan is not order to exclude the payment of unemploy entirely clear, in part because he argued, on similar grounds, that the very grant of a pension in lieu of unemployment ment benefit. However, the amount of his benefit was unlawful and that the amount of pension allo cated was too low; see however the question referred by the pension was calculated exclusively on the basis Cour de Cassation, at paragraph 18 of the judgment, and, in of his 120 periods of insurance in France. addition, paragraphs 12, 21, 23, 24 and 36 of the judgment and paragraph 11 of the Opinion. 19 — Loc. cit., paragraph 29. The Court presumably meant that Article 49 aid not require such an outcome, as nothing in Community law curtails a Member State's freedom to adopt purely national rules allocating to retired persons at its own 16 — Loc. cit. In the account which follows, national law is expense amounts of pension corresponding to their periods described as it applied during the period material to the of residence or insurance in another Member State; see fur decision in McLachlan. ther paragraph 31, quoted below.

tinued that this result was 'in conformity with tionment between national systems of respon­ the system under Regulation No 1408/71, sibility for payment of benefits, in accordance which allowed different schemes to continue with any additional national conditions, such to exist, creating different claims on different as those regarding age. institutions against which the claimant pos­ 20 sesses direct rights'. It stated that Mr Mc- Lachlan therefore had rights against the com­ petent institutions of the United Kingdom in respect of the periods of insurance completed in that State and against the French institu­ tions in respect of the periods completed in 21 France. As a result, 'each State pays the benefits which correspond to the periods com­ pleted under its legislation'. 22 18. McLachlan involved an attempted decou­ pling of the principles of aggregation and apportionment. The present case is entirely different in character. The applicant seeks merely the application of the rules regarding aggregation and apportionment in Article 46 of Regulation No 1408/71. Although she is entitled to the grant of a Belgian retirement pension in respect of her 19 years' employ­ ment in that country, she cannot qualify during the material period for the application 17. It is clear from these statements that the of a particular minimum rate of pension, also Court recognised the existence of inherent payable in respect only of those 19 years, limits to the application of the principle that unless her period of employment in the Neth­ migrant workers should not be deprived of erlands is also taken into account. In this the advantages which they could have claimed regard, it is worth quoting a further statement under the legislation of a single Member State by the Court in McLachlan: if they had worked there for their entire careers. Those limits are imposed by the very fact of the existence of different systems of social security which operate under different conditions, including those regarding the min­ imum age for the grant of certain benefits. Those limits are also recognised by the regime established by Regulation No 1408/71: con­ sequently, the application of the principle of aggregation in order to determine eligibility 'However, Article 49 does not preclude the for and the amount of certain benefits under legislation of a Member State whose condi­ different national systems is necessarily tem­ tions are satisfied from taking periods of pered by the principle of proportionate appor­ insurance completed under the legislation of another Member State into account for the purposes of the acquisition of the right to an 20 — Ibid., same sentence. The Court cited Case 100/78 Rossi v old-age pension and for determining the rate Caisse de Compensation pour Allocations Familiales [1979]of that pension. Moreover, that article cannot ECR 831, paragraph 13. 21 — Ibid., paragraph 30. preclude their being taken into account, since 22 — Ibid., paragraph 37. the Court has consistently held that Regula-

tion No 1408/71 may not be interpreted as as those referred to in the passage quoted meaning that it may result in depriving migrant immediately above, Community law requires workers of the advantages which they could the application of the principle of aggregation have claimed under the legislation of a single to the determination of the rate of pension 23 Member State.' for a Member State whose conditions for the grant of old-age benefit are satisfied, Article 49(1)(b)(ii) of Regulation No 1408/71 notwithstanding. In my view, it does so require, it always being understood that the principle of apportionment also applies, that is, that the calculation rules in Article 46(2) are observed in full. This conclusion flows 19. In this passage, the Court recognises a first and foremost from the provisions of distinction between the rate of a pension and Article 51 of the Treaty itself, which estab­ its ultimate amount. In a system of aggrega­ lishes the principle of aggregation as the norm tion and apportionment such as that estab­ for the Community-law rules on social secu­ lished by Article 46(2) of Regulation rity for migrant workers, and in the light of No 1408/71, the rate of pension is fixed through the calculation of the theoretical which Regulation No 1408/71 must be inter­ 24 amount; the process of aggregation ensures preted. Furthermore, if Article 49(1)(b)(ii) that, where different rates or scales of old-age were applied without qualification, it would benefit are applicable, depending on the total have the effect of depriving a worker such as length of a retired person's career in the the applicant of benefits at a higher rate which country in question, his entire career in the would have been awarded to her if she had Community is taken into account in deter­ spent her entire career in Belgium. It would mining the applicable rate. The ultimate do so in a fashion which is not related to the amount of pension payable (provided the continued existence of different schemes, independent amount is not higher) is the which create claims on different institutions actual or pro rata amount, whereby pension against which the claimant possesses direct is paid at the rate already identified solely in rights. It is not in dispute that a pension is respect of the proportion of the retired per­ payable in respect of her career in the Neth­ son's career actually spent in the Member erlands only after she reached the age of 65 State in question, even if that period would in years. In cases where a threshold period of itself have given rise under national rules only residence or insurance must be reached for a to a right to a pension payable at a lower rate. higher rate of benefit to be payable under a national social security system, the principle of aggregation is normally applied to the cal­ culation of the amount of benefit precisely in

order to ensure that a career spent in more differing substantive conditions, including than one Member State does not result in those regarding age, for the grant of social payment of benefit at a lower rate than would security benefits underlies the Community be applicable to a person with the same rules on aggregation and apportionment. The employment history confined to the country autonomous choice of a Member State to 25 in question. Its application to the calcula­ permit the grant of a full pension at the age tion of the pension due from Member State of 60 is as much entitled to respect, within A, whose conditions are in all other respects the framework of the Community rules pro­ satisfied, in no way gives rise to additional tecting migrant workers, as that of the Member claims against the institutions of another State which provides for this only at the age Member State's system, irrespective of whether of 65. The application in circumstances such that State's conditions for the grant of a pen­ as those of the present case of the rules on sion are fulfilled. aggregation and apportionment is more respectful, within that framework, of that autonomy than would be an unqualified reading of Article 49(1 )(b)(ii) of Regulation No 1408/71, which would subject the award by Belgium, at the age chosen by Belgium, of aggregated pro rata benefits at a rate consis­ 21. The unqualified application of tent with the length of a retired person's Article 49(1)(b)(ii) of Regulation No 1408/71 career in the Community to the requirement could also have illogical consequences. If Bel­ that the different substantive conditions gium also imposed a threshold of two thirds imposed by any other Member State where of a complete career spent in that country for that person had worked were also satisfied. the grant of a basic pension, the applicant In other words, the application of the latter would benefit from the combined application rules would, in effect, superimpose the Dutch of Articles 45 and 46 in order to be paid a age of pension entitlement on the Belgian pension at the graduated minimum rate in system. respect of her 19 years' employment there. The higher age for the payment of an addi­ tional Netherlands pension, also subject, if necessary, to aggregation and apportionment, would be irrelevant in such circumstances, as it also should be, in my view, in the present case.

date, viz. 1 June 1992, nor by the fifth recital not make clear whether it had in mind a sub­ in the preamble to that Regulation. It has," stantive or merely a textual supplementing of admittedly, been plausibly argued that both that provision. In Reichling, the Court said give the impression that the amendment of that its interpretation of a provision was Article 49 was, in substantive terms, an inno­ 'borne out' by subsequent amendments, con­ vation. Regarding the retroactivity point, the trary to the social security body's a contrario Commission explained that the amendment 26 arguments. It referred to the lack of expla­ was proposed in order to respond to a per­ nation of the amendment in the recitals as ceived misconstruction in at least one Member evidence that the amendment was clarifica­ State of the effect of Article 49, which coin­ tory in nature; however, the explanation given cided in time with the general reform of in the fifth recital in the preamble to Regula­ Chapter 3 of Title III introduced by Regula­ tion No 3096/95 does not contradict the thesis tion No 1248/92. This account has not been that the amendment of Article 49 of Regula­ contradicted. In fact, if the Council viewed tion No 1408/71 effected by that measure also the amendment as simply clarificatory in served simply to clarify the law. nature, it would have made sense to give its terms retrospective effect in respect of the period of currency of the apparent misinter- ' prctation of the preexisting provision, in order to correct decisions by national social secu­ rity authorities which might otherwise be protected by, for example, the expiry of time- limits for challenge or the principle of res judicata. This is not inconsistent with the view that the terms of the amendment merely articulate the proper construction of the pre­ ceding text, so that, in substantive terms, the amendment is more apparent than real. 25. In any event, the interpretation of the pre-amendment terms of Article 49 which I propose above is based on a reading of that provision in the light of Article 51 of the Treaty and of the resulting scheme and objec­ tives of Regulation No 1408/71. If the Court determines that that was, from the outset, the proper interpretation of that provision, it would not be within the power of the Council to disturb it, many years after the original provision's enactment, simply by legislating expressly for the same result under the false impression that it was establishing a novel 24. The terms of the fifth recital in the pre­ entitlement. amble to Regulation No 3096/95 do not indi­ cate clearly that the Council regarded the amendment as an innovation. In stating that it 'appear[cd] useful' to supplement Article 49(1)(b)(i) and (ii), the Council does 26 — Ibid., paragraph 29.