Thorkelsson v Iceland (decision), 12 April 2001 [ECtHR]

Case no 35771/97

2.  The applicants complained that their compulsory participation in the United Pension Fund entailed an unjustifiable interference with their right to negative freedom of association as guaranteed by Article 11 of the Convention ..

Even assuming that there has been an interference with the applicants' right to freedom of association within the meaning of paragraph 1 of Article 11, the Court is satisfied that the interference fulfilled the conditions set out in its paragraph 2.

In the first place, the Court sees no reason to doubt that the impugned obligation to participate in the United Pension Fund was “prescribed by law”, namely section 2 of the 1980 Act.

Moreover, it is clear that the contested interference pursued a legitimate aim, namely the protection of the rights and freedoms of others. 

As regards the further question, whether the interference was necessary in a democratic society, the applicants submitted that their wish had been to purchase annuity rights with a pension fund subject to separate property arrangements, not to participate in a fund with joint property rights. Under the latter type of arrangement the fund members accumulated assets by means of premium payments throughout their working lives, without the assets being earmarked for individual fund members. Instead they would as from a certain age be entitled to monthly annuity payments, the amounts of which were to be determined in the light of the total premium payments made by each fund member. 

The applicants further maintained that, since pension fund members would not always agree with the funds' investment policies, members should have a free choice as to which fund to join. If they were to continue participating in the United Pension Fund, they could not expect to obtain a pension from the fund which was commensurate with the premium paid. During the past years, the fund's financial situation had given the applicants reason to believe that the fund would be unable to honour its obligations when time comes for payment of pension. According to a 1992 report of the Bank Inspectorate of the Central Bank of Iceland, in 1991 the United Pension Fund was short of 260% assets to be able to meet its total obligations.

The Court notes that the applicants' objections to participation in the United Pension Fund, as opposed to the Free Pension Fund, were essentially of an economic nature and did not appear to involve considerations of personal conviction or opinion (cf. the Sigurður A. Sigurjónsson v. Iceland judgment of 30 June 1993, Series A no. 264, pp. 17–18, §§ 37 and 41). The rationale for the impugned compulsion was, as explained by the Government, to make members of particular occupational groups join a specific fund in order better to meet the particular needs and concerns of that group. It was to ensure that each participant, on the basis of the same principles, bear the costs of establishing their pension rights, not only for the benefit of their own individual interests but also those of the nation at large. The distribution of risk among the participants was an inherent feature of such a system, where a participant's benefits could be smaller than his or her contributions but could also be greater. 

In the view of the Court, the applicants' compulsory participation in the United Pension Fund was thus based on relevant and sufficient reasons and clearly fell within the wide margin of appreciation that States must enjoy in the area under consideration. 

It is further to be noted that, as stated by the Icelandic Supreme Court, the applicants had not shown that the United Pension Fund was unable to honour their pension rights as guaranteed under national law. Moreover, the legal compulsion to contribute to the pension fund in question had not prevented them from contributing to other funds such as the Free Pension Fund. The Court finds that there is nothing to indicate that the compulsion at issue affected the applicants' right to freedom of association in a manner which was disproportionate for the purpose of the necessity test under Article 11 § 2 of the Convention. 

The above considerations are not diminished by the fact that the legislature in the respondent State later deemed it desirable to afford employees a freedom of choice with respect to pension funds. On the contrary, the entry into force of the 1997 Act seems to have removed the legal situation of which the applicants complained under the Convention.

Against this background, the facts of the present case disclose no appearance of a violation of Article 11 of the Convention. This part of the application must be rejected as being manifestly ill-founded pursuant to Article 35 §§ 3 and 4 of the Convention.

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