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IP/11/420

Brussels, April 6th 2011

Free movement: Commission requests Germany to pay beneficiaries full pension granted under bilateral agreements

The European Commission has requested Germany to pay pension beneficiaries the full amount of pensions granted under a bilateral agreement when a citizen moves to another EU Member State. The Commission considers that by reducing the amount of pension paid to the pensioner because they move residence to another Member State, Germany is creating an obstacle to free movement. The freedom to move and work in another Member State is an EU fundamental right, as is the right to export a pension. The Commission's request takes the form of a 'reasoned opinion' under EU infringement procedures. Germany has two months to inform Commission of measures it has taken to bring its legislation into line with EU law. Otherwise the Commission may decide to refer Germany to the EU's Court of Justice.

The European Commission contacted the German authorities after receiving a complaint from a former Bulgarian, now German national, who has lived in Germany for 50 years. Since 1988 he has been receiving a German old-age pension however the German pension institution has informed him that if he takes up residence in Bulgaria, the amount of his pension transferred to Bulgaria would be reduced by more than one third, from over €650 to less than €400.

This agreement established between Bulgaria and Germany (before Bulgaria joined the European Union in 2007), provides for the payment of a differential supplement. To calculate this supplement, a comparison is made between the work periods acquired in Bulgaria and in Germany (pro rata amounts, based on the periods of insurance in each country) and the theoretical amount which is based on a calculation as if all periods were acquired in the country of residence. If the amount of the two pro rata pensions is lower than the theoretical amount, the state of residence must pay, in addition to its pro rata pension, this differential amount. According to Germany, if the citizen moves to Bulgaria, he loses this differential amount since Germany is no longer the state of residence.

The Commission considers that this bilateral Agreement must be applied in such a way that the full pension amount is exported when citizens concerned take up their residence in another EU Member State. If not, this creates an unjustified restriction to the right of free movement and indirect discrimination based on nationality.

Further information

Free movement of workers and coordination of social security systems:

http://ec.europa.eu/social/main.jsp?catId=26&langId=en

For more information on the infringement procedures:

http://ec.europa.eu/eu_law/infringements/infringements_en.htm

Subscribe to the European Commission's free e-mail newsletter on employment, social affairs and inclusion:

http://ec.europa.eu/social/e-newsletter

For more information on EU infringement procedures, see MEMO/11/220


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