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Decision in case 2175/2020/MMO on how the European Commission replied to a letter stating that a Swiss rule on pension rights is not in line with EU-Switzerland Agreement on the free movement of persons

Dear Mr X,

On 18 December 2020, you submitted a complaint[1] to the European Ombudsman against the European Commission concerning its reply to your e-mails of 14 and 25 December 2020. I understand from your complaint to the Ombudsman that you consider that the position the Commission took in its replies is not well-founded.

In your e-mails to the Commission, you say that a person who has not previously been affiliated to a Swiss pension fund only has a limited right to transfer funds into the Swiss pension system in the five years following arrival in Switzerland.[2]  During those five years, this amount cannot surpass 20% of the ‘insured salary’.

You consider this provision of Swiss law to be a violation of the EU-Switzerland Agreement on the free movement of persons[3] as, in your view, it constitutes indirect discrimination to the detriment of persons who made use of their right to work in another country.

The Commission replied to you that EU legislation in the field of social security, namely Regulation 883/2004 (the Regulation) [4], foresees the ‘coordination’ and not the ‘harmonisation’ of social security systems. Each Member State is free to determine the functioning of its social security system. The Regulation merely sets out the rules and the general principles that the national authorities of all Member States should respect when they apply their national legislation.

The Commission said that, in view of this and by virtue of the Agreement between the EU and Switzerland on the free movement of persons, the Swiss authorities are entitled to determine the functioning of the Swiss pension system, including the rules on the ‘purchase’ of pension rights. The specific rule you refer to does not seem to be in breach of the principle of equal treatment as the ‘purchase’ of the totality of pension rights can take place over a period of five years, which, according to the Commission, is a reasonable timeframe. The Commission also pointed out that, in some EU Member States, the ‘purchase’ of pension rights is not at all possible, and that is not considered discriminatory.

It is not the role of the Ombudsman to judge upon the interpretation of EU law. The Ombudsman would question an answer provided by the Commission in this regard only in case of a manifest error of assessment. I note that the Commission provided you with clear information why it considers that there is no breach of EU law and that its reply is reasonable. It also gave you the opportunity to comment on its position by taking into account and replying to your second e-mail.

Therefore, I conclude that there was no maladministration by the Commission.

I hope you find that the above explanations helpful.

Yours sincerely,

 

Tina Nilsson
Head of the Case-handling Unit

Strasbourg, 18/01/2021

 

[1] Full information on the procedure and rights pertaining to complaints can be found at https://www.ombudsman.europa.eu/en/document/70707.

[2] Article 60b of the OPP 2 (Ordonnance du 18 avril 1984 sur la prévoyance professionnelle vieillesse, survivants et invalidité)

[3] Agreement between the European Community and its Member States, on the one part, and the Swiss Confederation, on the other, on the free movement of persons, and in particular its Article 8

[https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A22002A0430%2801%29]

[4] Regulation 883/2004 on the coordination of the social security systems [https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32004R0883&from=EN]