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Germany the benefits relating to occupa- insurance benefits, as he is obliged to do so tional old-age pension schemes are provi- by virtue of the underlying employment ded according to various methods. The relationship. In particular, as stated by the simplest method is where the employer referring court itself, pursuant to the fourth takes on such obligations directly. How- sentence of Paragraph 1(1) of the BetrAVG, ever, the other methods rely on outside if the insurance conditions fixed under the bodies to fulfil these obligations. Therefore, statute of the Pensionskasse provide for the employer does not pay any benefits, but treatment which is inferior to that stated in makes provision for it indirectly, by means the contract of employment, the employer of: a 'Direktversicherung', that is insurance must make good the shortfall, complying operating under a free market regime, with his own contractual obligations in taken out by the employer in favour of accordance with the principle of equal the employee; an 'Unterstützungskasse', treatment. that is a provident or assistance fund; or, as in this case, a 'Pensionskasse', that is a pension fund entrusted by the employer with administering its occupational pension scheme and financed by contributions paid by it. 6. Finally, the referring court emphasises that the right of the employee is protected in the event of insolvency of the employer under Paragraph 7 of the BetrAVG. In those circumstances, the public body set up for that purpose, the Pensions-Sicher- ungs-Verein a.G., is liable for the employ- 4. With reference to the last option, it er's payments. should be noted that, pursuant to Para- graph 1(3) of the Gesetz zur Verbesserung der betrieblichen Altersversorgung (Law on the Enhancement of Occupational Old-Age Pensions; hereinafter 'the BetrAVG'), the Pensionskasse is a social security institution with a legal personality of its own, which pays an employee or his survivors the benefits due to them, assuming the relevant The Statute of the Pensionskasse für die pension risks in the same way as an Angestellten der Barmer Ersatzkasse insurance undertaking.

The following benefits are paid to members who leave the service of the BEK on 9. Mr Menauer is the widower of Mrs materialisation of the insured risk: Margitta Menauer, who was employed at the Regional Administrative Office of the Barmer Ersatzkasse in Straubing from 1 September 1956 until her death on 12 November 1993. The collective agree- ment applicable to the Barmer Ersatzkasse was applicable to the employment relation- 1. ... ship of Mrs Menauer, in accordance with a reference in her individual agreement. Under that agreement, the Barmer Ersatz- kasse was liable for the payment of benefits in respect of the occupational old-age pensions of its own employees, both male and female. Those benefits comprised a retirement allowance, payable by the 2. A survivor's pension on cessation of employer, and a pension, paid by the pension payments to members or pay- Pensionskasse, to male and female employ- ments of salary: ees who are members of the Pension Fund. Under the abovementioned collective agreement, the Barmer Ersatzkasse had to pay contributions to the Pensionskasse for its own employees, both male and female.

(a) a widow's pension to the widow of a deceased member. A widower's pension is paid to a husband on the death of a wife who was a member 10. Mrs Menauer was a member of the where the deceased was the main defendant pension fund throughout her breadwinner in the family.' employment. After her death, her widower,

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12. The Arbeitsgericht upheld Mr Menauer's claim vis-à-vis the Pensions- kasse, but dismissed it in so far as it concerned the Barmer Ersatzkasse. The Pensionskasse brought an appeal against that judgment, which was dismissed by the Landesarbeitsgericht (Regional Labour Court). The appeal of the Pensionskasse 14. However, in this case, the Bundesar- was then brought before the Bundesarbeits- beitsgericht wonders whether Mr Menauer gericht (Federal Labour Court). can rely on the right to the survivor's pension as against the Pensionskasse, as well as against the employer; more gener- ally it wonders whether the principle of equal pay laid down in Article 119 of the Treaty applies as against an entity such as the Pensionskasse, not only on account of Question referred for a preliminary ruling the legal independence of that fund, but also because, as already stated, the fund is of the nature of an insurance undertaking; as such, it is subject to supervision by the 13. The German court does not display any doubts concerning the incompatibility between Paragraph ll(2)(a) of the Statute 2 — See Case 43/7J Defremie II [1976] ECR 455, para- graph 40, and Case C-184/89 Nimz [1991] ECR I-297, of the Pensionskasse, to the extent that it paragraph 21.

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preliminary ruling, pursuant to Article 177 the Court, as the Bundesarbeitsgericht of the EC Treaty: confirms to some degree. I shall therefore proceed to examine those arguments, with ample recourse to that case-law.

'Must Article 119 of the EC Treaty be interpreted as meaning that pension funds must be considered to be employers and obliged to treat men and women equally as regards payments of occupational old-age Significance of the legal nature of the pensions, even though disadvantaged pension funds employees have an entitlement, which is secured against insolvency and excludes discrimination, against the body directly responsible for provision of a pension, that is to say their employer as a party to the employment contract?' 19. As we have already seen, one of the main arguments put forward by the Bun- desarbeitsgericht, and also by the Pensions- kasse and the German Government, to exclude the application of Article 119 of the Treaty to pension funds, concerns the legal nature of those funds and the negative implications that such application would mean in the German legal system. Legal assessment

20. I should like to state first of all on this Preliminary observations point, in very general terms at this stage, that while those implications exist, the argument could not be conclusive because it is a settled principle of Community law that the transposition of that law into the legal systems of the Member States may not 18. Moving on to the case before us, I must be impeded by the difficulties or incompat- emphasise at once, as the Commission and ibilities which may arise from that trans- the Netherlands Government did in their position. 4 respective observations, that the answer to the arguments stated in the order for reference and summarised above is to be 4 — Ex multis and with specific reference to this argument, see found to a large extent in the case-law of Coloroll, cited above, paragraph 41 et seq.

24. That approach had been taken in the judgment in Barber, in which the applic- ability of the principle of equal pay for men and women was affirmed also with respect to private occupational pension schemes '... set up in the form of a trust and adminis- tered by trustees who are technically inde- pendent of the employer, since Article 119 22. It is also settled case-law that a survi- also applies to consideration received indir- vor's pension falls within the concept of ectly from the employer'.8 It was then 'other consideration', contained in Arti- followed, as the Bundesarbeitsgericht also cle 119 of the Treaty, paid by the employer points out, in the subsequent judgments in to the employee in respect of his employ- Coloroll and Fisscher, in which the Court ment through the instrument of an occupa- held that while both the trustees under tional pension scheme. Even though that United Kingdom law and the directors of pension is not paid to the employee, but to an occupational pension scheme under the surviving spouse, the pension benefit is Netherlands law are technically indepen- a consideration which arises from the dent of the employer and are '... not party survivor's spouse's membership of the occu- to the employment relationship, [they] are pational pension scheme.6 called upon to pay out benefits which constitute pay within the meaning of Arti- cle 119', with the result that '... they must 5 —Sec Case 170/84 Bilka [1986] ECR 1607, paragraph 20; Case C-262/88 Barber [1990] ECR I-1889, paragraph 28, and Case C-110/91 Moram |1993] ECR I-6591, para- graph 15 et seq. 6 — Sec Case C-109/91 Ten Oever |1993| ECR I-4879, para- 7 — Sec Barber, cited ahovc, paragraphs 28 and 29; Co/oro//, graph S et seq.; Co/oro//, cited above , paragraph 18, and cited ahove, paragraph 20, antl Fisscher , cited above , Case C-147/95 Eurenopoulos |1997| ECR I-2057, para- paragraph 31. graph 22. 8 — Barber, cited above , paragraph 29; emphasis added.

25. In my view, it can be inferred generally 26. Nor do I think that this conclusion can from that case-law that third parties be avoided through another argument entrusted by the employer with administer- mentioned above, according to which, ing the occupational scheme, irrespective of given that the principle of equality in force their legal form and the way in which they in insurance law requires the payment of are assigned the task of managing the insurance benefits equal to the contribu- pension rights of the employee arising from tions paid, the application of Article 119 of his employment relationship, must comply the Treaty to the Pensionskasse might result with the principle laid down in Article 119 in an increase in contributions. I would of the Treaty. Even in the cases just cited point out in that regard that that objection the third party entrusted by the employer had already been dealt with, and dismissed, with administering its own occupational in the judgment in Coloroll. The Court pension fund — such as the Pensionskasse stated in that case that 'the fact that there in this case — is technically independent are difficulties in applying the principle of with respect to the employer, but that was equal pay because the funds held by the not considered by the Court to be sufficient trustees are insufficient or the employer for it to avoid the application of Arti- cannot provide additional funds is a prob- cle 119 of the Treaty. Similarly, the legal lem to be resolved in accordance with form which the pensions entity may have, national law', with the result that 'any because of the specific nature of each problems arising because the funds held by national legal system, was not considered the trustees are insufficient to equalise to be a determining factor. On the contrary, benefits must be resolved on the basis of the Court considered the fact that those national law in the light of the principle of entities were 'called upon to pay out equal pay', therefore, in full compliance benefits which constitute pay within the with Article 119 of the Treaty. 11 meaning of Article 119' to be a determining factor. 10 I therefore conclude that the legal independence of the Pensionskasse with respect to the employer and its nature as an insurance entity are not sufficient for it to avoid compliance with that fundamental principle, while the fact that the Pensions- kasse was entrusted by the employer with the payment of the occupational pension 27. I do not think that in the present case arguments have been put forward which

30. That point having been made, there seems to me to be no doubt that such 28. To avoid those objections, both the contracts must include agreements entered Bundesarbeitsgericht and the German Gov- into by the employer with third parties ernment have recourse to other arguments, responsible for administering pension also mentioned above. Above all, they schemes. The Court itself endorsed that emphasise the fact that, in the case of the inference when it stated that 'the effective- Pensionskasse, the employer remains liable ness of Article 119 would be considerably for the pension benefits, being obliged to diminished and the legal protection do so by virtue of the underlying contract required to ensure real equality would be of employment. Accordingly, where the seriously impaired if an employee or an benefits laid down in the statute of the employee's dependants could rely on that pension fund remain below the amount the provision only as against the employer, and employer is obliged to ensure under that not against the trustees, who are expressly contract, the employee will be able to charged with performing the employer's obtain a supplementary pension benefit by obligations'. 13 If that were not the case, the having recourse to the person primarily employer would be able to 'avoid the liable for payment of that pension, that is obligations incumbent on him under Arti- the employer himself. In addition, it will be remembered that under the German system the right of the employee or the persons 12 — Sec Defrenne II, cited above, paragraphs 12 and 39; Case C-33/89 Kowalska [1990] ECR 1-2591, paragraph 12; claiming under him is protected also Coloroll, cited above, paragraph 26. against the risk of insolvency of the 13 — Coloroll, cited above, paragraph 23; in the same vein, with reference to the directors of a pension scheme, Fisscher, employer. cited above, paragraph 31; emphasis added.

15 — See Council Directive 80/987/EEC of 20 October 1980 on 32. Nor, in my view, is the other argument the approximation of the laws of the Member States mentioned above of any relevance, namely relating to the protection of employees in the event of the insolvency of the employer (OJ 1980 L 283, p. 23). that even if the employer were to become 16 — Council Directive 86/378/EEC of 24 July 1986, on the insolvent the legal protection of an implementation of the principle of equal treatment for men and women in occupational social security schemes employee belonging to the category discri- (OJ 1986 L 225, p. 40). That provision was interpreted in this way by Advocate General Van Gerven in the minated against would not be weakened or Opinion delivered on 28 April 1993 in the cases already restricted, as the public entity set up to cited, Ten Oever and Coloroll ([1993] ECR I-4893, paragraph 57). In the version in Council Directive 96/97/ provide legal protection against the insol- EC of 20 December 1996, amending Council Directive 86/378/EEC on the implementation of the principle of equal treatment for men and women in occupational social security schemes (OJ 1996 L 46, p. 20), it is also stated that the scheme management bodies 'must take account of 14 — Coloroll, cited above, paragraph 21; emphasis added. the principle of equal treatment'.

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tional or replacement occupational pension 34. For the foregoing reasons, I consider is left to the discretion of the scheme that the employee and the persons claiming management bodies, 'they must take under him should be able to rely on account of the principle of equal treat- Article 119 of the Treaty in respect not ment'. only of the employer but also the third parties entrusted by him with occupational pension schemes, such as the pension fund.