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Retrospective reform of the temporary increase in the rate of the retirement pension held constitutional
Press Release No. 34/2012 of 30 May 2012
Order of 2 May 2012
2 BvL 5/10
Civil servants who have acquired, in addition to their civil service pension entitlement, a pension entitlement under the statutory pension scheme from a previous job are in a special pension situation if they retire prior to reaching the statutory pension age - for example due to invalidity or because there is a special age limit. They are initially entirely dependent on their civil service pension benefits since they cannot draw their old-age pension until they reach the statutory pension age. This can be disadvantageous for civil servants if the number of years that can be taken into consideration for the purposes of calculating their pension benefits is few because they did not acquire civil servant status until late in their careers and retired early. § 14a of the Civil Servants' Pensions Act (Beamtenversorgungsgesetz - BeamtVG) compensates for this "gap in pension provision" in the case of persons with what are known as "mixed careers" through a temporary increase in the retirement pension rate until the old-age pension becomes payable.
Under the original version of § 14a.1 BeamtVG, the increase was calculated on the basis of the "retirement pension rate calculated according to the other provisions". The administrative authorities interpreted the provision to mean that only a retirement pension rate calculated ("earned") on the basis of reckonable service was relevant. This was consistent with the rulings of the administrative courts and the opinion of a number of legal scholars. On the other hand, the Federal Administrative Court (Bundesverwaltungsgericht) concluded in its judgment of 23 June 2005 that a minimum retirement pension rate of 35% of pensionable earnings was also a "calculated" retirement pension rate within the meaning of § 14a.1 BeamtVG. The administrative authorities have not, however, followed this interpretation of the law; furthermore, only part of the lower courts have followed it.
The Civil Service Law Reform Act (Dienstrechtsneuordnungsgesetz - DNeuG), which was promulgated on 11 February 2009, amended § 14a.1 BeamtVG so that only the "earned" pension rate would be used as the basis for calculating the temporary increase in the retirement pension rate. Article 17.1 DNeuG provided that the amendment would take effect on 24 June 2005; i.e. at the same time as the conflicting decision handed down by the Federal Administrative Court.
The plaintiff in the original administrative court proceedings had been an officer with the Federal Border Guard (which was later renamed the Federal Police) since 1992. After turning 60, he retired at the end of February 2008 due to age. The Northern Federal Finance Office (Bundesfinanzdirektion Nord) assessed his pension at €1,691.89 and temporarily increased his "earned" retirement pension rate of 32.64% by 24.58% to a total of 57.22 % of pensionable earnings pursuant to § 14a.1 BeamtVG (old). The plaintiff sought to have his retirement pension rate temporarily increased on the basis of the minimum retirement pension rate to a total of 59.58 % of his pensionable earnings so that he would receive a pension of €1,761.68. The Northern Federal Finance Office rejected his application. The action brought by the plaintiff against such rejection resulted in the submission pursuant to Article 100.1 of the Basic Law (Grundgesetz - GG) made to the Federal Constitutional Court by the Federal Administrative Court, which holds the view that the retrospective amendment of § 14a.1 BeamtVG infringed the rule-of-law principle of the protection of legitimate expectations under the Basic Law.
The Second Senate of the Federal Constitutional Court decided that Article 17.1 DNeuG is compatible with the Basic Law and, in particular, with the constitutional requirements placed on the protection of legitimate expectations. According to the Federal Constitutional Court, the retrospective application of the provision is not impermissible under constitutional law and does not infringe the legitimate expectation of civil servants entitled to a pension that they will be provided for in their old age in a manner appropriate to their office, which expectation is protected by Article 33.5 GG.
In essence, the decision is based on the following considerations:
1. Article 17.1 DNeuG has retrospective effect, which is measured in each case in terms of the legal situation used as a basis by the Federal Administrative Court. This is not altered by the fact that the administrative authorities view the retrospective amendment of § 14a.1 BeamtVG (old) simply as a clarification of the existing situation as is stated in the explanatory memorandum. It is for the courts to provide binding interpretations of legal provisions. Accordingly, if the legislature claims that it has the authority to provide an "authentic" interpretation of a provision which is retrospectively amended, such claim cannot be recognised. In deciding whether a retrospective provision has law-altering effect, a finding that the amended provision could be and has been interpreted by the courts according to recognised principles of statutory interpretation in a manner which was intended to be excluded by the amendment suffices. That is the case here. The legislature's amendment of § 14a.1 BeamtVG (old) amounted to a decision on its part of a matter in dispute in a manner diverging from that of the supreme federal court and its decision therefore had a law-altering effect.
2. However, Article 17.1 DNeuG is not objectionable in view of the constitutional limits on retrospective legislation. On the part of the civil servants affected, there are no legitimate expectations worthy of protection that would prevent the retrospective entry into force of § 14a.1 BeamtVG. The confidence in the existing legal situation guaranteed by the principle of the rule of law and Article 33.5 GG is only worthy of protection if the statutory provision is generally suitable for establishing confidence in its continued existence and inducing decisions - in particular dispositions of property - which would prove disadvantageous if the legal situation were to change. It was not possible under the given circumstances for the civil servants affected to develop a sufficiently firm confidence, which was thus worthy of protection, in the fact that the minimum retirement pension rate was a "calculated" retirement pension rate within the meaning of § 14a.1 BeamtVG (old). The regulatory content of § 14a.1 BeamtVG (old) was not clear in this respect. There was no established case law of the supreme federal court on the issue. Instead the Federal Administrative Court's judgment of 23 June 2005 diverged from prior administrative practice and the interpretation of § 14a.1 BeamtVG (old) adopted in the rulings of the lower courts and by a part of the legal scholars. The judgment has been heavily criticised by legal scholars and at least one higher administrative court has failed to follow the case law of the Federal Administrative Court. In addition, the authorities in charge of civil servants' pensions have made it clear that the judgment of 23 June 2005 should not be followed over and beyond the decision in the individual case and that clarification by the legislature is needed. Moreover, legislative initiatives at both the federal and state level for providing a statutory foundation for the unchanged administrative practice have been launched. Under these circumstances it could be expected that the Federal Administrative Court would correct its interpretation of the law. Accordingly, there was an insufficiently secure basis for confidence in the continued existence of the legal situation based on this decision.