Common use of Calculation of pensions Clause in Contracts

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.