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Reduction of pension claims of expellees and refugees under Foreign Pensions Act constitutional
Press Release No. 73/2010 of 07 September 2010
Order of 21 July 2010
1 BvR 2530/05
From the 1960s on, foreign pensions law was based on the principle of integration, under which expellees and refugees, after they moved to the Federal Republic of Germany, were treated in the same way in the statutory pensions insurance scheme as if their previous employment had been subject to German pensions insurance law. However, the political upheavals in the states of eastern and south eastern Europe from the end of the 1980s on led the legislature to depart from the principle of integration. Thus, among other changes, § 22b.1 sentence 1 of the Foreign Pensions Act (Fremdrentengesetz - FRG) old, which entered into force on 7 May 1996, reduced foreign pension claims to the effect that one person's claim was to be based on a maximum of 25 earnings points (pension credit points) in the statutory pensions insurance scheme. This restriction applied only to those persons entitled who had taken up habitual residence in Germany from 7 May 1996. The provision was interpreted in varying ways in the following years. The pension insurance institutions and social courts proceeded on the assumption that the restriction to 25 earnings points as a total upper limit for one individual included both that person's own pension on the basis of his or her own work in the country of origin and also the person's survivor's pension on the basis of the deceased's work in the country of origin. In contrast, the Fourth Senate of the Federal Social Court (Bundessozialgericht), in its judgment of 30 August 2001, held that the restriction was not applicable as an overall upper limit if the beneficiary, in addition to his or her own old-age pension, was also entitled to a survivor's pension under the Foreign Pensions Act. However, the pension insurance institutions did not follow this interpretation of the law; even the courts of the lower instances did not all follow it. The Pension Insurance Sustainability Act (Rentenversicherungs-Nachhaltigkeitsgesetz - RVNG), which was passed by the Bundestag on 11 March 2004 and promulgated on 26 July 2004, amended § 22b.1 sentence 1 FRG to the effect that foreign pensions based on the recipient's own insurance and on the death of a person entitled were calculated in total on the basis of a maximum of 25 earnings points. Article 15.3 RVNG provided that this amendment should enter into force with effect from 7 May 1996.
The complainant in the proceedings 1 BvR 2530/05 and the plaintiffs in the original proceedings on which the three reviews of a specific statute are based resettled in Germany in the second half of the 1990s but after 7 May 1996 and were recognised here as ethnic German resettlers. Their husbands had either already died while the couple still lived in their country of origin or died only a few years after resettling. In all cases, the calculation of the old age and survivor's pensions was undertaken by the pension insurance institutions observing an upper limit of a total of 25 earnings points, as a result of which the sum of the survivor's pension was either very small or non-existent, because the 25 earnings points were completely (or partly) exhausted by the beneficiary's own old-age pension. In her constitutional complaint, the complainant challenges a decision of the Federal Social Court which ultimately confirmed the ruling of the pension insurance institution. In the other proceedings, the actions instituted against the pension insurance rulings resulted in another Senate of the Federal Social Court making a judicial referral to this Court. This Senate regards the retroactive effect of the revision of § 22b.1 sentence 1 FRG as what is known as genuine retroactive effect, which it submits is impermissible in this case.
The First Senate of the Federal Constitutional Court rejected the constitutional complaint as unfounded and decided in the joined proceedings on the review of the constitutionality of a statute that the (retroactive) application of the joint upper limit of 25 earnings points laid down in Article 15.3 RVNG is compatible with the Basic Law (Grundgesetz - GG). In line with the fact situations in the present cases, the decision relates to the restriction of the amount of such survivor's pensions as are based solely on periods under the Foreign Pensions Act and which have to date not been granted without the restriction provided in § 22b.1 sentence 1 FRG.
The decision, which was passed unanimously, is in essence based on the following considerations:
The application for judicial review is unfounded. The pensions affected in the present case, which are based solely on periods of contribution and work outside the statutory pensions insurance scheme of the Federal Republic of Germany, are not subject to the legal protection of property under Article 14.1 of the Basic Law, since they are not based on the applicant's own contribution to Federal German pensions insurance.
In addition, Article 15.3 RVNG does not result in a violation of the prohibition of retroactive law. At least in formal respects, Article 15.3 RVNG does result in a genuine retroactive effect because it makes the revised provision applicable to a period following 7 May 1996, although it was only on promulgation on 26 July 2004 that its legal existence commenced. It is not necessary to decide here whether the amendment of the restriction on foreign pensions actually made intrinsic changes to the legal position and therefore the principles of the prohibition of retroactive law apply, or whether it merely confirmed in a declaratory manner the legal position which already existed under the former version of the statute, with the result that the prohibition of retroactive law does not apply. For even a genuine retroactive effect would be permissible if the persons entitled lacked reliance meriting protection.
The fundamental prohibition of genuine retroactive effect applies only if legislation was suitable to give rise to reliance on its existence in past periods of time. But the plaintiffs in the original proceedings on the review of the constitutionality of a statute could not rely on more than 25 earnings points being taken into account in the calculation of their old age and survivor's pensions. Until the decision of the Federal Social Court on 30 August 2001, there was no basis for this reliance, because at that time neither the pension insurance institutions nor the social courts proceeded on the basis of such a meaning of the statute, and this was the universal legal view. Nor was the decision to the contrary of the Federal Social Court of 30 August 2001 suitable to create reliance. The case-law of the highest courts such as the Federal Social Court is not statute law and thus does not create any comparable binding legal effect. Reliance meriting protection on a particular legal position on the basis of the decision of the highest courts may at most arise in the case of case-law established over a period of many years, which was not the case here. Instead, the approach of the pension insurance institutions and of a significant proportion of the social courts, which continued to deviate, was an obstacle to the development of reliance on the continuing application of the Federal Social Court's interpretation of § 22b.1 sentence 1 FRG old. The fact that another Senate of the Federal Social Court confirmed its view of the law on 11 March 2004 does not alter this, since the revised version introduced by the Pension Insurance Sustainability Act was passed by the Bundestag on the same date. From the date of the final enactment by the Bundestag on, citizens may no longer rely on the continuing existence of the previous provision, but must seriously expect the amended version to enter into effect.
For the above reasons, the constitutional complaint is also unfounded insofar as the complainant submits that her claim to protection of confidence is violated. Nor are other fundamental rights of the complainant violated by § 22b.1 sentence 1 FRG new. The provision does not result in discrimination against the persons entitled to foreign pensions on the basis of their home country or origin (Article 3.3 of the Basic Law), since the differing treatment of these persons under pensions law is based solely on different insurance histories. Nor is there a violation of the principle of equality before the law under Article 3.1 of the Basic Law. As against the insured persons whose periods of insurance were spent in the Federal Republic of Germany, the unequal treatment of persons entitled to foreign pensions is justified by the fact that they have made no contributions of their own to the German statutory pension scheme. In comparison to former citizens of the German Democratic Republic, who also paid no contributions to pension insurance institutions of the Federal Republic of Germany for the period before reunification, but instead acquired pension rights or expectancies in the GDR, the justification of unequal treatment is based on the fact that the two German states also agreed on unification in the area of social insurance, which included unified pension law. The choice of 7 May 1996 as they key date can also be justified objectively.