Federal Constitutional Court - Press office -
Press release no. 17/2011 of 18 February 2011
Order of 11 January 2011 – 1 BvR 3588/08, 1 BvR 555/09 –
Cuts in the reduced earning capacity pensions are constitutional also
where the pension payment starts before the recipient’s 60th year of age
The monthly amount of a pension is calculated according to a pension
formula. In one of the formula’s calculation steps, all remuneration
points which an insured person has acquired in his or her life are
multiplied by what is called the age factor.
Until 31 December 2000, the age factor was 1.0 for reduced earning
capacity pensions. The age factor was reduced by the Act for the Reform
of the Reduced Earning Capacity Pensions (Reform der Renten wegen
verminderter Erwerbsfähigkeit) of 20 December 2000. According to the
version of § 77.2 sentence 1 no. 3 of the Sixth Book of the Code of
Social Law (Sozialgesetzbuch Buch IV – SGB VI) applicable as from 1
January 2001, the age factor of 1.0 is reduced by 0.003 for every month
in which the reduced earning capacity pension is drawn before the
completion of the pensioner’s 63rd year of age. If, however, the pension
payment starts before the completion of the pensioner’s 60th year of
age, the completion of the 60th year of age remains the relevant date
for determining the age factor, i.e. the preceding period of time in
which the pension is drawn does not result in a further reduction. Thus,
the restriction ensures that even if a pension is drawn before the
completion of the pensioner’s 60th year of age, the monthly pension
amount will be reduced by 10.8 % at most.
To mitigate the effect of the pension cut, the legislature at the same
time fully recognised the added period for insured persons from their
55th year of age, while until 31 December 2000 only a third of it had
been recognised. The added period is the period which is added to a
reduced earning capacity pension if the insured person has not yet
completed the 60th year of age. Additional remuneration points are taken
into account in the pension calculation in order to ensure a sufficient
pension also in the case of premature disability.
Furthermore, transitional provisions were created which provided for a
gradual introduction of the new legal situation, so that the age factor
was fully reduced only for insured persons who started drawing their
pensions as from 1 December 2003.
The complainants had been granted a pension on account of partially or
fully reduced earning capacity. As the complainant in proceedings 1 BvR
3588/08 was only 51 years old when he started drawing his pension in
2005, the age factor was reduced according to the new legislation. As a
result, the complainant’s pension was reduced by approximately 3.18 %,
taking into account the change concerning the added period. This
corresponds to a monthly reduction by about 15 euros. For the
complainant in proceedings 1 BvR 555/09, who was 57 years old when she
started drawing her pension in July 2002, the pension reduction which
was due to the new legislation ultimately amounted to approximately 3.88
%, i.e. to about 16 euros per month. As she had started to draw her
pension before 1 January 2004, the transitional provision was applied to
her pension. The respective actions brought by the complainants against
the reduction of their pensions were ultimately unsuccessful before the
Federal Social Court (Bundessozialgericht). By means of their
constitutional complaints, they challenge a violation of their
fundamental right to property under Article 14.1 of the Basic Law
(Grundgesetz – GG), of the general principle of equality (Article 3.1
GG), and of the ban on discrimination under Article 3.3 sentence 2 GG.
The First Senate of the Federal Constitutional Court has rejected the
constitutional complaints as unfounded. It held that the complainants’
fundamental rights are not violated by the contested decisions of public
authorities, by the contested court rulings and by the new provision on
the age factor in § 77.2 sentence 1 no. 3 SGB VI.
In essence, the decision is based on the following considerations:
1. The introduction by § 77.2 sentence 1 no. 3 SGB VI of a reduced age
factor if the payment of a reduced earning capacity pension starts
before the completion of the pensioner’s 63rd year of age concerns the
area of protection of the fundamental right to property. The provision
determines the content and the limits of property, while at the same
time interfering with existing pension entitlements.
However, the provision is constitutional because it serves an objective
of the common good and is proportionate. The new legislation on the age
factor serves the legitimate objective of securing the funding of the
statutory pensions insurance, thus maintaining and improving the
viability of the statutory pensions insurance system and adapting it to
the changed economic situation in everyone’s interest. After introducing
in 1992, by the Pensions Reform Act, reductions when an old-age pension
is drawn prematurely, the legislature assumed that insured persons would
preferably apply for a pension on account of reduced earning capacity
instead of drawing a reduced old-age pension. The reduction of the age
factor for reduced earning capacity pensions was intended to prevent
such an evasion to reduced earning capacity pensions; furthermore, the
reduction was intended as a reaction to pensions being drawn before the
beginning of the standard age for old-age pensions, and thus was
intended as a reaction to the involved extension of the pension term.
The reduction of the age factor was suitable and necessary for achieving
this objective, and it does not disproportionately burden the
complainants. It is true that they had not yet completed their 60th year
of age when the new legislation entered into force. Hence, they had not
complied with one of the prerequisites for prematurely drawing an
old-age pension, so that in their case it was precluded from the outset
that they had applied for a reduced earning capacity pension to avoid
prematurely drawing an old-age pension. However, it can also be
reasonably expected of the insured persons who apply for a reduced
earning capacity pension before completing their 60th year of age to
accept a reduction of the age factor because they do benefit from the
increase in added time, which was introduced by the legislature at the
same time, and from drawing their pensions earlier. Ultimately, this
considerably mitigates the reduction of the reduced earning capacity
pension for this group of insured persons, with the consequence that
insured persons drawing a reduced earning capacity pension are burdened
with considerably lower reductions than those insured persons who
prematurely draw an old-age pension.
Furthermore, the principle of the protection of public confidence has
been sufficiently taken into account by the transitional provisions
created by the legislature.
2. As the determination of the content and limits of property in § 77.2
sentence 1 no. 3 SGB VI proves to be adequate, there is also no
violation of the general principle of equality under Article 3.1 GG. The
fact that the reductions of reduced earning capacity pensions are not
nearly as high as those possible with old-age pensions and that they are
even partly compensated by the increase in added times takes sufficient
account of the circumstance that unlike the premature drawing of an
old-age pension, access to a reduced earning capacity pension
presupposes a fateful development of a person’s state of health.
3. Finally, the complainants’ complaint that the law treats them equally
to non-disabled old-age pensioners with regard to the reductions of the
age factor also cannot substantiate the existence of a violation of the
ban on unfavourable treatment under Article 3.3 sentence 2 GG. On the
one hand, the pensions law’s concept of disabled persons is not
identical to the general concept of disabled persons, focusing on
participation in social life, towards which Article 3.3 sentence 2 GG is
oriented. For the claim to a reduced earning capacity pension is
exclusively based on the ensured person’s abilities on the labour
market; even a temporary illness may be sufficient for drawing such a
pension. On the other hand, to the extent that it concerns disabled
persons within the meaning of Article 3.3 sentence 2 GG, the provision
of § 77.2 sentence 1 no. 3 SGB VI is still justified in comparison to
other forms of unemployment because of the manner described above in
which it takes health-related inability to work into account.
This press release is also available in the original german version.
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