Calculation of pensions Clause Samples
The 'Calculation of pensions' clause defines the method and criteria used to determine the amount of pension benefits an individual is entitled to receive. Typically, this clause outlines the formula for calculating pension payments, which may consider factors such as years of service, average salary, and age at retirement. By specifying these parameters, the clause ensures transparency and consistency in how pension entitlements are determined, thereby preventing disputes and providing clarity for both the employer and the employee regarding future retirement benefits.
Calculation of pensions. 1. If a person is entitled to an old-age, disability or survivors’ pension under the Norwegian legislation without proceeding to totalization, the Norwegian agency shall calculate the pension entitlement directly on the basis of the insurance periods completed in Norway and only under the Norwegian legislation. That competent agency shall also calculate the amount of the old-age, disability or survivors’ pension that would be obtained by applying the rules specified in paragraph 2. Only the higher of these two amounts shall be taken into consideration.
2. If a person is entitled to an old-age, disability or survivors’ pension by virtue of the Norwegian legislation, with his right being created solely by taking the totalization of the insurance periods into account pursuant to Article 11, the following rules apply:
a) the competent agency shall calculate the theoretical amount of the pension due as if all the insurance periods completed according to the two Contracting States' legislations were exclusively completed under the Norwegian legislation;
b) the competent agency shall then calculate the amount due, on the basis of the amount specified under a), in proportion to the duration of the insurance periods under Norwegian legislation, in relation to the duration of all insurance periods accounted under a);
c) if the period of coverage in Norway or the sum of Norwegian and Indian periods of coverage exceeds 40 years, the years in excess shall be disregarded for the purposes of this calculation. With regard to determining supplementary pensions, only pension point years in Norway and insurance periods in India shall be taken into account.
Calculation of pensions. 1. Where a person may claim a benefit under the laws of one of the Contracting States without the need to apply articles 11 and 12, the competent agency shall calculate, in accordance with the laws it applies, the benefit corresponding to the total duration of the periods of coverage to be taken into account under those laws. That agency shall also calculate the benefit which would be payable if the provisions of paragraph 2 of this article were applied. It shall pay to the person concerned the higher amount of the benefit calculated in accordance with the two methods.
2. Where a person may claim a benefit, entitlement to which is acquired only by aggregating periods as provided for in articles 11 and 12, the following rules shall apply:
(a) The agency shall calculate the theoretical amount of the benefit which the applicant could claim if all the periods of coverage completed under the laws of the two Contracting States had been completed solely under its own laws;
(b) To determine the theoretical amount referred to in subparagraph (a) above, the bases for the calculation shall be established taking into account only the periods of coverage completed under the laws which the competent agency applies;
(c) On the basis of this theoretical amount, the agency shall then establish the actual amount of the benefit, prorated according to the ratio of the duration of the periods of coverage completed under the laws it applies to the total duration of the periods of coverage completed under the laws of the two Contracting States. That total duration shall not exceed the maximum period required by the laws which the agency applies for the receipt of full benefit.
3. If a person can claim a benefit only by applying the provisions of article 12 of this Agreement, periods of coverage completed under the laws of a third State shall be taken into account in applying the preceding paragraph.
Calculation of pensions. 1. Where a person may claim a pension under the laws of a Contracting State without the need to apply articles 6 and 14, the competent agency shall calculate, in accordance with the laws it applies, the pension corresponding to the total duration of the periods of coverage to be taken into account under those laws. That agency shall also calculate the pension that would be payable if the provisions of paragraph 2 were applied. Only the higher amount shall be retained.
2. Where a person may claim a pension, entitlement to which is acquired only by aggregating periods as provided for in articles 6 and 14, the following rules shall apply:
(a) The competent agency shall calculate the theoretical amount of the pension which the applicant could claim if all the periods of coverage completed under the laws of the two Contracting States had been completed solely under its own laws;
(b) To determine the theoretical amount referred to in subparagraph (a), the bases for the calculation shall be established taking into account only the periods of coverage completed under the laws which the competent agency applies;
(c) On the basis of this theoretical amount, the competent agency shall then establish the actual amount of the pension, prorated according to the ratio of the duration of the periods of coverage completed under the laws it applies to the total duration of the periods of coverage completed under the laws of the two Contracting States.
3. When the aforementioned calculation of the theoretical amount and prorating are effected, if the total duration of the periods of coverage completed under the laws of the two Contracting States before the materialization of the risk exceeds the maximum period required by the laws of one of the Contracting States for the receipt of full benefit, the competent agency of that Contracting State shall take into account that maximum period instead of the total duration of the periods completed. This method of calculation shall not result in that agency being obliged to pay greater benefit than the full benefit provided for in the laws it applies.
4. Where a person may claim a pension only if the provisions of article 14, paragraph 2, are applied, the periods of coverage completed under the laws of the third State concerned shall be taken into account for the application of paragraph 2.
Calculation of pensions. 1. The competent institution of a Contracting Party shall calculate the amount of the pension:
a) as regards the Republic of Serbia – on the basis of the insurance period; - as regards the Republic of Azerbaijan – on the basis of the insurance period or pension capital acquired in its territory and under its legislation, if the conditions for entitlement to the pension have been satisfied exclusively under its legislation;
b) proportionally according to the ratio of the length of insurance periods completed in its territory and under its legislation to the total sum of aggregated periods, in such a case: - the competent institution shall calculate the theoretical pension amount of the pension which could have been claimed provided that all insurance periods had been completed under its legislation and - then - on the basis of the theoretical amount calculated in accordance with second part of subparagraph b) determine the amount of pension payable by applying the ratio of the duration of insurance periods completed under its legislation to the total insurance periods.
2. When calculating the amount of the pension, the competent institution of a Contracting Party shall take into account only the incomes or contributions for the insurance periods completed in its territory and under the legislation it applies.
Calculation of pensions. (1) If under the legislation of one Contracting State the conditions for the entitlement to benefits are satisfied even without taking into account the periods of insurance completed under the legislation of the other Contracting State, the competent institution of the first Contracting State will determine the benefit
a) on the basis of the periods of insurance completed exclusively under its legislation, and at the same time
b) according to the rules provided by paragraph 2, with the exception when the result of this calculation is equal to or lower than the result of the calculation under a).
(2) If under the legislation of one Contracting State the right to benefits can be acquired only with regard to periods of insurance completed under the legislation of the other Contracting State or the third state within the meaning of Article 13 paragraph 2 of this Agreement, then the competent institution of the first Contracting State:
a) shall calculate the theoretical amount of the benefit which could be claimed provided that all periods of insurance have been completed under the legislation of this first Contracting State and b) then - on the basis of the theoretical amount calculated with respect to letter a) - shall determine the actual amount of the benefit in accordance with the ratio of the duration of the periods of insurance completed under the legislation of the first Contracting State to the total periods of insurance. Where, under the legislation of one Contracting State, benefits are calculated on the basis of average wages or salaries, the competent institution shall – in applying the provision of this paragraph - take into account wages or salaries gained during the periods of insurance completed under the legislation which it applies - with exclusion of wages or salaries and periods completed under the legislation of the other Contracting State or the third state taken into account within the meaning of Article 13 paragraph 2 of this Agreement.
(3) The person concerned shall be entitled to the highest amount calculated in accordance with paragraphs 1 and 2 from the competent institution of each Contracting State.