PARTLY DISSENTING OPINION OF JUDGE PANOVA

I agree with the majority that the pensions cap is a measure that is provided for by law and pursues a legitimate aim. However, in my view the protracted restriction of the applicants’ right to receive the full amount of their pensions is not proportionate to the aim sought to be attained and thus not necessary in a democratic society.

First, I fully agree that each State is in the best position to determine how to allocate its budget and in particular how to organise and allocate its social security budget. In that sense, a State has a wide margin of appreciation to determine the measures that it has to take at any given time to achieve its legitimate aim – in the case at hand, a reorganisation of the social security budget at a time when the Bulgarian economy was undergoing a transition and when the pension system was being reorganised. In 1989 Bulgaria entered a period of transition from a centralised socialist economy to a market economy. However, that process cannot be endless and unlimited in time – twenty ‑ two years have now elapsed since 1989 – and cannot perpetually serve to justify limitations on citizens’ social rights. Whilst until the end of the 1990s, when section 47c of the Pensions Act 1957 was in force, it could be considered that the State had the right to achieve its legitimate aim by capping pensions in order to organise the pensions budget, after that the restriction obviously started to become disproportionate because it affected citizens’ rights for too long and therefore in an excessive manner.

Secondly, the measure impugned by the applicants, consisting of a cap on their pensions, was introduced with paragraph 6 of the transitional and concluding provisions of the Social Security Code 1999 and has been in effect from the beginning of 2000 to the present day. It is by nature a rule limited in time. It provides for a time ‑ limit for the capping of pensions, but that time-limit is constantly being postponed. It has thus far been extended on three occasions: once until the end of 2009, a second time until the end of 2011, and most recently until the end of 2013. There is no guarantee that at the end of 2013, when the cap is currently due to expire, the provisional measure will not be extended again. Thus, the recommendation made by the Constitutional Court in judgment no. 21 of 1998, that it would be desirable for the impugned legislative solution to be repealed in the future, has for thirteen years not been heeded, in spite of the changed social and economic circumstances. The continued existence of that measure, originally envisaged as a provisional one, creates legal uncertainty for the applicants and for others in a similar situation. That makes the measure – the pensions cap – disproportionate in relation to the attainment of its otherwise legitimate aim.

Thirdly, it is true that the applicants’ pension contributions were being made on their behalf by the State, but that cannot serve as grounds for the conclusion reached by the majority in paragraph 95 of the judgment, namely that the State can freely modify the amount of the pensions that are due to the applicants. The State has made and continues to make pension contributions for civil servants. The applicants are not the only group of individuals who were not paying their pension contributions themselves. However, they have exercised professions entailing a very high risk for their life and physical integrity, and that has been recompensed with higher remunerations and thus with higher pension contributions paid into the social security budget. Even though the pension system in Bulgaria is organised on a pay ‑ as ‑ you ‑ go basis, the applicants’ pension contributions financed the pensions of those who were in retirement back then. The reorganisation of the pension system has to take into account the legitimate expectations of citizens in relation to their retirement. The purpose of social security is to provide for risks resulting from the attainment of an age after which those concerned are no longer expected to be able to work. In the applicants’ case, that risk, in view of the nature of their jobs, was markedly higher. Moreover, one cannot overlook the fact that because of the higher salaries that they were receiving while employed the applicants were paying higher taxes, which also went into the State’s budget.

Fourthly, the applicants, who are entitled to social security in the form of pensions but not to a particular amount of pension, nonetheless had a legitimate expectation that their pensions would be determined in the same way as all other pensions in the country and would thus correspond to a foreseeable amount. The applicants’ problem is that their pensions were set in amounts determined in decisions of the National Social Security Institute. However, they have never received those amounts as a result of a provisional restriction imposed by the legislature that has thus far been maintained for eleven years. This is not about amounts that were taken in equal proportions from all those entitled to a pension, but about amounts that are by law due and not being paid as a result of a provisional restriction. It has not been disputed that the applicants are among those who have for a number of years exercised heavy and risk ‑ laden professions, which was probably the reason for their not unjustified, and indeed statute ‑ based, expectation that they would be entitled to higher pensions. If those individuals had been aware that in spite of their high pension contributions they would never be able to receive the full amount of their pensions, they probably would not have exercised those professions for very long, in order to preserve their health.

Lastly, I do not agree with the conclusion in paragraph 97 of the judgment that the applicants do not have to endure a considerable and actual decrease in their pension benefits because they have always been affected by some sort of pension ceiling and because they remain among the highest ‑ paid pensioners. The facts of the case show that they receive two or three times less than the full amount of their pensions. The maximum amount of their pensions is approximately five times higher than the minimum (social) pension in Bulgaria – BGN 136 (equivalent to EUR 69.54) – which is received by people who have reached retirement age but have never worked. In view of the nature of the applicants’ professions, such a difference is disproportionate and unjust. The legitimate aim – social justice – cannot be attained if there is no justice for the individual. The issue here is not deprivation of an increase in the amount of the pension, but deprivation of the basic amount of the pension. In addition, it should not be overlooked that the measure affecting the applicants also affects a considerable proportion of pensioners in the country – approximately one ‑ fiftieth of them. It is true that since 2000 in Bulgaria there have been two other tiers of pension: a mandatory second tier for those born after 1 January 1960, and a voluntary third tier consisting of private pension funds. However, neither of those schemes is relevant for or available to the applicants, because they had already retired by the time the schemes came into existence. They therefore have no means of securing a higher pension amount. That makes the pensions cap even more disproportionate to the aim pursued.

For all these reasons I believe that the Bulgarian authorities have infringed the right of the applicants to receive their real amounts of their pensions and that this constitutes a violation of Article 1 of Protocol No. 1.

[1] . Under the currency revalorisation of 5 July 1999, one new Bulgarian lev (BGN) equals 1,000 old Bulgarian levs (BGL).

[2] . Since 1998 the exchange rate between the euro and the Bulgarian lev has been fixed by law (section 29(2) of the Bulgarian National Bank Act 1997, and decision no. 223 of the Bulgarian National Bank of 31 December 1998). EUR 1 is equal to BGN 1.95583 (BGL 1,955.83).

[3] . Between 1998 and 2003 the third ‑ tier scheme was governed by the Additional Voluntary Pension Insurance Act 1998. In 2003 the relevant provisions were incorporated into the Social Security Code 1999.

[4] . In January 2000 the minimum monthly salary was BGN 67. Between February and September 2000, it was BGN 75. Between October 2000 and March 2001, it was BGN 79. Between April and September 2001, it was BGN 85. From October 2001 until the end of that year, it was BGN 100. Thus, the maximum income for social security purposes during those periods was respectively BGN 670, BGN 750, BGN 790, BGN 850, and BGN 1,000.