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Pension calculation when you have contributions in several different European countries

European rules provide coordination between the different social security organisation for European pension rights. You can benefit from this coordination if you are a citizen of the European Economic Area (EEA: European Union + Norway, Iceland, Liechtenstein and Switzerland). The age from when it is possible to claim benefits depends on the country in charge of settling the pension (the different periods must be validated by each state where it has been contributed).

Each institution where you contributed will calculate the amount to be paid according to:
- its legislation (national pension)
- by adding together all working periods in all the state members, and calculating proportionally with the time spent in the state (Proportional or communitarian pension)

Of course each institution will retain the most advantageous amount after comparing the two computations.

The pension formula is such as:
Average annual wage (income/salary) x Settling rate x Quarter/Reference time

- Average annual wage:
Only the wage, income or salary contributed in the state.

- Settling rate:
Varies from 25% to 50%. For example (France), in order to have a full pension (50%) at 60 years old, you need to have contributed for 160 quarters. After 65 year old this rate is always used. However, it is different for national pension and communitarian pension:

* for the national pension, you count all quarters (or equivalent period) contributed in the country (included those you might have bought back or were voluntary).

* for the communitarian pension, you do not take into account the voluntary or bought back periods. You add the periods contributed in other EEA states (but only if they do not match with the same dates contributed in the country ; in this latest case they are lost).
Then, a pension called "theoretical" is calculated as if all the career was made in the country in charge of settling the pension. This amount is reduced according to the number of valid quarters used.

- Quarter/Reference time:
It depends on your date of birth
60 years old in 2006 --> reference time = 156
60 years old in 2007 --> reference time = 158
60 years old in 2008 --> reference time = 160

You contributed 100 quarters in France and then 60 quarters in Germany. You are 60 in 2008 and want to calculate your pension from France:
National pension = wage x 25% x 100/160
Communitarian pension = wage x 50% x 160/160 x 100/160
The communitarian pension is better and therefore will be used for your French pension.

Each state that will calculate a pension on your behalf will do the payment.
The initial request is made in the country where you are resident at the time of the demand. This institution will be in charge of liaising with the other countries. The payment of each country depends usually on the rules existing in each state.

More information on:
http://ec.europa.eu/employment_social/spsi/missoc_en.htm [Mutual Information System on Social Protection]


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