GERMANY - Larger German local authorities must tender occupational pension services, the European Court of Justice (ECJ) has ruled
The European Commission (EC) took Germany to court in 2007 over its collective agreement for local authorities, under which supplementary pension schemes are automatically chosen as occupational pension providers.
But in a ruling yesterday the ECJ agreed that local authorities which had more than 2,042 employees in 2006-07 had breached EU regulations on free trade in services by not tendering mandates for pension provision.
Although the ruling is likely to affect larger local authorities only, supplementary pension schemes will have to take part in the tendering process on pension provision for those local authorities in future.
Denmark and Sweden's local authorities are also exempt from a tendering process for occupational pension services and both supported Germany in the court case.
Issuing its ruling, ECJ said: "In view of all the foregoing considerations, it must be held that, in so far as service contracts in respect of occupational old-age pensions were awarded directly, without a call for tenders at European Union level... in 2004 by local authorities ...which then had more than 4 505 employees, in 2005 by local authorities ... which then had more than 3 133 employees and in 2006 and in 2007 by local authorities ... which then had more than 2 402 employees, the Federal Republic of Germany failed to fulfil its obligations ...relating to the coordination of procedures for the award of public service contracts."
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