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The acquisition of the right to the so-called early retirement prior to 1 January 2013 vs. the acquisition of the right to an old-age pension P 20/16

On 6 March 2019 at 10.00 a.m., the Constitutional Tribunal considered a question of law referred by the Circuit Court in Szczecin (the 6th Division – Labour and Social Insurance) with regard to the acquisition of the right to the so-called early retirement prior to 1 January 2013.

The Constitutional Tribunal adjudicated that Article 25(1b) of the Act of 17 December 1998 on Old-Age and Disability Pensions from the Social Insurance Fund, in the version that was binding until 30 September 2017 – insofar as it applies to women born in 1953, who prior to 1 January 2013 acquired the right to the so-called early retirement under Article 46 of the said Act – is inconsistent with Article 2 of the Constitution of the Republic of Poland.

The Constitutional Tribunal discontinued the review proceedings as to the remainder.

The ruling was unanimous.

In the case under consideration, the Tribunal examined whether it was admissible for the legislator to use the mechanism of calculating the basis of an old-age pension, under the universal pension system, with the deduction of early retirement benefits collected by insured women born in 1953, as well as reviewed the conformity of the legislator’s solution with Article 2 of the Constitution.

The right to early retirement, arising from Article 46 in conjunction with Article 29 of the said Act was – in the circumstances of the 1999 reform – one of the special statutory solutions. This constituted an element facilitating a shift to the new old-age pension system for persons who had attained at least the age of 50 and, at the same time, had many years of service.

When examining the conformity of Article 25(1b) of the said Act with Article 2 of the Constitution and with the principle of citizens’ trust in the state and its laws, which arises from Article 2 of the Constitution, the Tribunal considered that women who had decided to take the opportunity to retire early had not known – at the time of taking the decision – about the impact that the decision would have on the calculation of the amount of their future old-age benefits i.e. old-age pensions acquired after the attainment of the retirement age required under the universal old-age pension system.

The said persons decided to retire early, trusting that the state would not change the rules governing early retirement in connection with retirement under the universal old-age pension system. However, the said rules were modified, without giving the addressees of the rules the possibility of reacting accordingly.

As pointed out by the Tribunal, it was due to the legislator’s explicit decision that the modification of the old-age pension system did not cover the above-indicated group of women where they had met the requirements of early retirement and had decided to retire early. Thus, the legislator provided for additional guarantees of the realisation of old-age pension rights under the rules of the old system. Due to the fact that the said rights were transitional in character – i.e. were valid until their expiry – this, in a way, enhanced the justified conviction of those women that the legislator would not retract from the realisation of those rights and that they would not be subject to any new provisions in this respect.

As emphasised by the Tribunal, insured persons’ decisions to retire early may not result in uncertainty as to the regulation of their legal situation in the future if such decisions are made on the basis of binding legal provisions. The fact of beginning to exercise the right to early retirement, which directly affects the amount of an old-age pension under the universal old-age pension system – on the basis of the principle of citizens’ trust in the state and its laws – gives rise to a justified expectation that the legislator will not change “the rules of the game” to the detriment of persons exercising their rights in compliance with the statute. In other words, this will not be a trap for those who have exercised their rights, trusting in the binding law which specified the time-limit for the availability of certain benefits and the rules for the allocation thereof.

The rational legislator should take account of ensuing effects in the realm of public finance, the planning of which must – within the old-age pension system – cover the statistical length of the life of those persons after they become retirees. The principle of citizens’ trust in the state and its laws rules out the possibility that the state would formulate empty promises or retract earlier promises and/or established rules of conduct. This indeed constitutes authorities’ inadmissible abuse of their position with regard to citizens. This in particular pertains to the situation where citizens – when handling their interests – make long-term decisions and predict the consequences thereof on the basis of binding legal provisions. A change in those provisions comes as a surprise that could not, in given circumstances, have been predicted by citizens, and hence they could not adjust to this new situation in a way that would have no negative impact on their rights.

As regards the effects of its judgment, the Tribunal pointed out that persons who – prior to 1 January 2013 – retired early on the basis of Article 46 of the aforementioned Act have the right to the so-called rectification of constitutionality, as provided for in Article 190(4) of the Constitution,[i] by means of a relevant procedure that is appropriate for proceedings falling within the scope of social insurance.

The Presiding Judge of the adjudicating bench was Judge Sławomira Wronkowska-Jaśkiewicz, and the Judge Rapporteur was Judge Leon Kieres.

 


[i] [Article 190(4) of the Constitution of the Republic of Poland reads as follows:
“A judgment of the Constitutional Tribunal on the non-conformity to the Constitution, an international agreement or statute, of a normative act on the basis of which a legally effective judgment of a court, a final administrative decision or settlement of other matters was issued, shall be a basis for reopening proceedings, or for quashing the decision or other settlement in a manner and on principles specified in provisions applicable to the given proceedings.”; the full text of the official English translation of the Constitution is available at this address: https://www.sejm.gov.pl/prawo/konst/angielski/kon1.htm ]