Opinion of Advocate General Campos Sánchez-Bordona delivered on 29 February 2024.#Bayerische Ärzteversorgung and Others v Deutsche Bundesbank.#Request for a preliminary ruling from the Bundesverwaltungsgericht.#References for a preliminary ruling – Economic and monetary policy – European system of national and regional accounts – Statistical reporting requirements applicable to pension funds – Special pension schemes for the professions – Compulsory membership and contributions.#Case C-758/22.

1.

These two requests for a preliminary ruling provide the Court of Justice with the opportunity to interpret Regulation (EU) 2018/231, ( 2 ) which grants the European Central Bank (‘ECB’), among others, the power to obtain detailed statistical information from pension funds (‘PFs’) concerning their financial intermediation activities.

2.

Occupational mutual social insurance institutions ( 3 ) are well-established in Germany. Six such organisations ( 4 ) are in dispute with the Deutsche Bundesbank (Central Bank, Germany), which requires them to disclose financial information because, as PFs, it considers them to be subject to Regulation 2018/231. Those institutions, on the other hand, claim that they are social security funds, a status which exempts them from supplying the information required.

3.

The dispute centres on the interpretation of the classification of the European system of national and regional accounts in the European Union (‘the ESA 2010’), adopted by Regulation (EU) No 549/2013, ( 5 ) and referred to in Regulation 2018/231. Its interpretation is particularly complex because the ESA 2010 contains a statistical classification of the economy as a whole, based on concepts whose legal meaning is not always straightforward to determine. The Court has already dealt with a number of difficulties raised by the ESA 2010 in some recent judgments. ( 6 )

4.

Article 1 (‘Definitions’) provides:

‘For the purposes of this Regulation:

5.

Article 2 (‘Actual reporting population’) provides:

‘1.   The actual reporting population shall consist of the PFs resident in the euro area Member States.

2.   The PFs in the actual reporting population shall be subject to full statistical reporting requirements unless any derogation granted pursuant to Article 7 applies.

…’

6.

Article 1 (‘Subject matter’) provides:

‘1.   This Regulation sets up the European System of Accounts 2010 (“the ESA 2010” or “the ESA”).

2.   The ESA 2010 provides for:

…’

7.

Chapter 1 (‘General features and basic principles’) of Annex A to the ESA 2010 includes the following paragraphs:

‘…

…

…’

8.

Chapter 2 (‘Units and groupings of units’) of Annex A to the ESA 2010 contains the following paragraphs:

‘…

THE INSTITUTIONAL UNITS

…

THE INSTITUTIONAL SECTORS

…

Financial corporations (S.12)

…

Financial intermediaries

…

…

General government (S.13)

…

Social security funds (S.1314)

9.

Chapter 3 (‘Transactions in products and non-produced assets’) of Annex A to the SEC 2010 includes the following paragraphs:

‘…

Output (P.1)

…

…

…

…

10.

Chapter 17 (‘Social insurance including pensions’) of Annex A to the SEC 2010 includes the following paragraph:

‘…

PENSIONS

…

Social security pension schemes

…’

11.

Chapter 20 (‘The government accounts’) of Annex A to the ESA 2010 reads:

‘…

Government units

…

…

…

Pension funds

…’

12.

The Gesetz über das öffentliche Versorgungswesen ( 7 ) applies in the Free State of Bavaria. In accordance with that Law, occupational mutual insurance institutions:

13.

In the Free State of Saxony, the Sächsisches Heilberufekammergesetz ( 13 ) and the Satzung über die Sächsische Ärzteversorgung ( 14 ) are applicable. According to the order for reference in Case C‑759/22, the content of those provisions does not differ substantially, as regards occupational mutual insurance institutions, from that of the provisions applicable in Case C‑758/22.

14.

The referring court points out the following features of the Säschische Ärtzeversorgung (Occupational Mutual Social Insurance Association for Medical Practitioners of the Free State of Saxony):

15.

By letters of 7 September 2018 and 25 March 2019, the Deutsche Bundesbank (Central Bank) informed four Bavarian institutions that, in accordance with Articles 1 and 2 of Regulation 2018/231, they were subject to statistical reporting requirements in their capacity as PFs and that, from 30 September 2019, they would have to provide it, on a quarterly basis, with certain data, which it set out, regarding their financial circumstances.

16.

By means of almost identically worded letters of 12 November 2018 and 17 July 2019, it instructed another applicant institution to submit more limited data on an annual basis.

17.

The institutions each brought administrative proceedings, seeking the annulment of the communications concerning them and, in the alternative, a declaration that they were not subject to reporting requirements.

18.

In the judgment of 4 November 2021, the Verwaltungsgericht Frankfurt am Main (Administrative Court, Frankfurt am Main, Germany) dismissed the actions, holding that the applicants were PFs for the purposes of Article 1(1) of Regulation 2018/231, and that they were subject to reporting requirements pursuant to Article 2(1) of that regulation.

19.

The applicant mutual institutions brought leapfrog appeals for review against the first-instance judgment before the Bundesverwaltungsgericht (Federal Administrative Court, Germany).

20.

In their appeals, the applicants submitted that they are non-market producers, that their compulsory benefits constitute the major part of their output and that they are not sold at economically significant prices. In this respect, the compulsory members do not have the freedom, as is required under point (b) of the first subparagraph of paragraph 3.19 of Annex A to Regulation No 549/2013, to choose whether or not to acquire the pension benefits on the basis of the required contributions. The applicants argue that the 50% rule laid down in the third subparagraph of paragraph 3.19 of Annex A to the ESA is not relevant, since it serves only to determine the output. In any event, those mutual institutions are part of the social security funds subsector.

21.

The facts and conduct of the main proceedings are, with the exception of the specific features of each case, essentially the same as those of Case C‑758/22.

22.

Against that background, the Bundesverwaltungsgericht (Federal Administrative Court) asks the Court for a preliminary ruling on the following questions, which are identical in both proceedings:

23.

The requests for a preliminary ruling were received at the Registry of the Court of Justice on 15 December 2022. In view of their similarity, the two cases were joined.

24.

Written observations were lodged by the ECB, the Deutsche Bundesbank (Central Bank), the Bayerische Ärzteversorgung, representing the five Bavarian pension funds, the Sächsische Ärzteversorgung, and the European Commission. All those parties took part in the hearing held on 13 December 2023.

25.

Before replying specifically to the questions referred for a preliminary ruling, I believe that it is helpful to set out why, in view of their importance to the economic and monetary policy of the Member States, PFs are subject to certain reporting requirements. I shall also deal, as a preliminary point, with the features of the pension system existing in Germany, in so far as is important for these references, and the essential characteristics of the ESA 2010.

26.

PFs play an important role in the economy of the euro zone and the European Union as a whole, since they provide households with an opportunity to save for retirement and, at the same time, contribute to the efficient long-term allocation of capital.

27.

Since the 2008 financial crisis, the assets of PFs have multiplied and, according to some estimates, those assets come to more than EUR 3 trillion. Those estimates indicate that their percentage of GDP in the euro zone has almost doubled, rising from 13% in 2008 to more than 25% now. ( 17 )

28.

The assets in which PFs invest the most are units in investment funds and debt securities. Other smaller-scale investments include shares and holdings, financial derivatives, cash and loans. ( 18 )

29.

The gaps in the available information and the lack of comparability between countries made it difficult to ascertain the impact of PFs on the transmission of monetary policy and the risks associated with the investment behaviour of PFs and their interconnection with the rest of the financial system and the real economy.

30.

Therefore, the ECB considered it essential to have harmonised, quality statistics on PFs in the euro zone, which explains the legislative process used in relation to the provision of detailed statistical information.

31.

Originally, Article 2(a) of Regulation (EC) No 2533/98 ( 19 ) excluded PFs from what it called the ‘reference reporting population’. ( 20 ) However, the ECB recommended ( 21 ) the inclusion of PFs, which was brought about by Regulation (EC) No 951/2009. ( 22 )

32.

The arguments put forward in support of that change were that:

33.

Following their inclusion in the reference reporting population, Regulation 2018/231 imposed on PFs requirements to report statistical information to central banks in the euro zone. ( 23 ) In that way, the ECB has certain knowledge of the role of PFs in the monetary policy transmission mechanism.

34.

At the hearing, the ECB confirmed that, for the adoption of its decisions, Regulation 2018/231 now allows it to hold the essential detailed quarterly statistics concerning the financial activities of PFs. Before, it could only obtain those statistics, through an indirect route and on an annual basis, in relation to the assets but not the liabilities of PFs.

35.

In Germany, retirement insurance is provided through a number of schemes (pillars). The general scheme is the retirement insurance scheme established as a branch of social security, but other schemes exist, ( 24 ) including the scheme provided by mutual social insurance institutions for certain professions. ( 25 )

36.

Occupational mutual institutions are governed by the provisions in force in each Land. A Land usually authorises occupational mutual institutions at the request of professional associations, and they are set up as independent institutions governed by public law or as funds under the control of the professional associations which administer them. The professions covered are not identical in each Land.

37.

Occupational mutual institutions are financed by the contributions of their members, who are exempt from contributing to the general social security scheme. They obtain additional profits from the funds collected through those contributions and invest these in capital markets, like any other financial intermediary.

38.

Members of a profession have been required to join a mutual institution since these were created in the Land where they work, and they must pay a compulsory contribution, in addition to which they may pay a voluntary contribution. Members who cease their activity may continue as voluntary members of the mutual institution. When mutual institutions calculate contributions, they do not differentiate between compulsory and voluntary membership.

39.

Occupational mutual institutions finance pensions using members’ contributions. Therefore, they operate on the basis of the risk-pooling principle: their governing bodies decide the amount of the contributions and the criteria for calculating the pensions to be paid to their members.

40.

Occupational mutual institutions cover their own administration costs and they do not receive any public funding or support. That factor, among others, distinguishes them from the general retirement pension scheme of the social security system, for which any losses are offset by the State budget.

41.

The importance of the PFs set up by German occupational mutual institutions is considerable. In particular, according to some estimates, in 2022, the investments of the five Bavarian mutual institutions in Case C‑758/22 came to EUR 106800 million and those of the Saxon mutual institution (Case C‑759/22) came to EUR 4700 million. ( 26 )

42.

At the hearing, the Bundesbank stated that the six applicant mutual institutions were alone in objecting to the provision of detailed quarterly statistical information to the ECB, in accordance with Regulation 2018/231. Other similar German organisations have accepted their classification as PFs and have provided that information.

43.

In order to determine which PFs are required to provide detailed statistical information to the ECB, Regulation 2018/231 refers to the concepts laid down by Regulation No 549/2013 in the ESA 2010.

44.

The ESA 2010 is a statistical classification set out in Annex A to Regulation No 549/2013. It is ‘an internationally compatible accounting framework for a systematic and detailed description of a total economy (that is, a region, country or group of countries), its components and its relations with other total economies.’ ( 27 )

45.

The Court has ruled on the ESA 2010, holding that:

46.

Since the ESA is a statistical instrument, its interpretation must take into account the fact that the concepts it uses are not always the same as the corresponding administrative concepts. Furthermore, Regulation No 549/2013 states that ‘the concepts in the ESA usually differ from their administrative counterparts in that: … (d) the administrative concepts are generally not optimal for economic analysis and the evaluation of economic policy.’ ( 30 )

47.

The concepts and terms used in the SEC 2010 reflect an overall economic approach and cannot be read in isolation or literally. The determination of the underlying logic of those concepts and terms is possible only by means of an interpretation based on systematic and purposive criteria. ( 31 ) It is also necessary to bear in mind that the definitions in the ESA are supplemented by indicators, as an aid for verifying whether the components of those definitions are satisfied, and by diagrams creating links between the stages of the examination resulting from the individual definitions.

48.

In particular, when the paragraphs of different chapters deal with the same issue and pursue the same objective, even though there are variations in their wording, they ‘must … receive a common interpretation and be regarded as forming one and the same provision.’ ( 32 )

49.

For the purposes of the ESA 2010, any institutional unit ( 33 ) must be linked to one of the five mutually exclusive national sectors (non-financial corporations, financial corporations, general government, households, and non-profit institutions serving households). ( 34 )

50.

The questions referred for a preliminary ruling concern two of those five sectors included in Annex A: ( 35 )

51.

I believe that the most appropriate order for replying to the questions submitted by the referring court is, first, to deal with the fourth, fifth and sixth questions together, in order to determine whether the applicant mutual institutions are PFs or social security funds. The dispute turns on the selection of just one of those two options, to the exclusion of any others. ( 36 )

52.

The classification of institutional units in the ESA 2010 must be carried out by means of an overall assessment of their features by reference to the economic activity that they perform. ( 37 ) A strict reading of the definitions and criteria in the ESA 2010 which does not take account of the principal economic activity of the institutional unit concerned is not appropriate. So-called decision trees (like diagram 2.1 in the ESA 2010) must be used flexibly, without any need to follow a strict, fixed order that disregards the institutional unit’s economic activity. That is, I stress, the key factor of the classification.

53.

The referring court expresses its uncertainty regarding how to coordinate the concept of PF in Regulation 2018/231 with the definitions and criteria used in the ESA 2010 for characterising that type of institutional unit.

54.

In accordance with Article 2(1) of Regulation 2018/231, the actual reporting population subject to the requirement of comprehensive statistical reporting to the ECB is to consist of the PFs resident in the euro area Member States.

55.

In laying down the definition of a PF, Article 1(1) of Regulation 2018/231 refers to subsector S.129 of the ESA 2010, which does not preclude it from using its own definition ( 38 ) and from excluding from that definition ‘social security funds as defined in paragraph 2.117 of the ESA 2010’. The definition of PF in Regulation 2018/231 is basically the same as that in paragraph 2.105 of the ESA 2010.

56.

In principle, on account of their purpose, the applicant mutual institutions come within the definitions of PF in Regulation 2018/231 and the ESA 2010, since they are principally engaged in financial intermediation (within the meaning of Article 1(1) of Regulation 2018/231) and provide an income in the event of retirement, disability and death.

57.

My analysis will consider: (a) the classification of the applicant mutual institutions as PFs; (b) the reasons for not including them in the social security funds category; and (c) their relationship with the concept of ‘general government’.

58.

Paragraphs 2.107 to 2.110 of the ESA 2010 contain criteria for characterising PFs, which I shall go through below in relation to the applicant mutual institutions.

59.

First, examples of participants in PFs ‘include employees of a single enterprise or a group of enterprises, employees of a branch or industry, and persons having the same profession.’ ( 39 ) The applicant mutual institutions cover persons who practise regulated professions in the German Länder.

60.

Secondly, ‘the benefits included in the insurance contract [of those PFs] can be: paid after the death of the insured to the widow(er) and children; paid after retirement; or paid after the insured becomes disabled.’ ( 40 ) The applicant mutual institutions cover retirement and, as the case may be, death and disability.

61.

Thirdly, ‘in contrast to life insurance corporations, pension funds are restricted by law to specified groups of employees and self-employed’. ( 41 ) The membership of the applicant mutual institutions encompasses only one type of self-employed worker, namely, persons who practise certain regulated professions.

62.

Fourthly, ‘pension fund schemes may be organised by employers or by general government. They may also be organised by insurance corporations on behalf of employees; or separate institutional units may be established to hold and manage the assets to be used to meet the pension entitlements and to distribute the pensions.’ ( 42 ) In the case of Germany, it is professional associations, which have the status of public entities, which foster the creation of mutual institutions, that manage themselves independently. ( 43 )

63.

It is not possible for an entity to be classified as a PF and to fall within subsector S.1314 (social security funds), which comes under sector 13 of the ESA 2010 (general government). Those are mutually exclusive categories.

64.

In accordance with paragraph 2.117 of the ESA 2010, the ‘social security funds’ subsector includes units: (a) whose principal activity is to provide social benefits by law or by regulation to groups of the population which are obliged to participate in the scheme or to pay contributions; and (b) whose management in respect of the settlement or approval of the contributions and benefits is the responsibility of general government. ( 44 )

65.

Although the applicant mutual institutions fulfil, to a large extent, the first criterion (compulsory membership) ( 45 ) for classification as social security funds, ( 46 ) that does not appear to be the case as regards the second criterion (management responsibility lies with general government).

66.

The applicant mutual institutions are required to comply with a number of statutory minimum requirements, ( 47 ) but the settlement and approval of their contributions and benefits is not decided on by general government, unlike in the case of social security funds.

67.

According to the information in the case file, the applicant mutual institutions:

68.

In my view, paragraph 20.39 of the ESA 2010 confirms categorically that mutual institutions like the applicants do not form part of the social security system. In accordance with that paragraph, there is no social security scheme where there is no government guarantee on the level of pensions due, and that amount depends on asset performance.

69.

In this case, the amount of the pensions to be covered by the applicant mutual institutions depends on the profits from the intermediation activity they undertake, that is, on the performance of their assets. If their investments yield good profits, they will be able to pay better benefits and vice versa if they do not. There is no government guarantee on the amount of pensions owed.

70.

The above is not precluded by paragraph 17.43 ( 49 ) of the ESA 2010, contrary to what the referring court appears to suggest. That court takes the view that the definition of social security pension schemes in paragraph 17.43 may be independent and exhaustive, so that the term ‘general government’ includes legal persons governed by public law which are independent vis-à-vis the primary unit. That is the case of the applicant mutual institutions; they would have to be classified as social security pension schemes because the law requires their compulsory members to participate in their pension schemes and because they provide their benefits as institutional units, with separate legal personality, of a Land.

71.

To my mind, however, paragraphs 2.117 and 17.43 of the ESA 2010 are complementary and must be applied together in accordance with a uniform, consistent interpretation. ( 50 )

72.

Paragraph 17.43 is included in Chapter 17 of the ESA 2010 and concerns social insurance, including pensions, but, I stress, it must be read in combination (and consistently) with paragraph 2.117, which identifies institutional units that may be classified as social security funds. ( 51 )

73.

The conditions set out in paragraph 2.117 for the application of the criteria in paragraph 17.43 are essential. It is not possible to classify institutional units without taking into account the paragraphs in Chapter 2 of the ESA 2010.

74.

Paragraph 2.117 of the ESA 2010 defines the social security funds subsector, whereas paragraph 17.43 is a specific provision, intended to draw a distinction within that subsector. Paragraph 17.43 presupposes fulfilment of all the elements of the definition in paragraph 2.117 and supplements it by means of a number of characteristics in order to distinguish social security pension schemes.

75.

I conclude, therefore, that mutual institutions like the applicants cannot be classified as social security funds.

76.

In its sixth question, the referring court asks whether the concept of ‘general government’ used in paragraph 2.117(b) and paragraph 17.43 of the ESA 2010 refers only ‘to the respective primary unit’ or whether it also includes ‘legally independent pension institutions that have been established on a statutory basis, are organised on the basis of compulsory membership and financed by contributions, and which have the right to self-governance and separate accounting’. ( 52 )

77.

In my opinion, paragraphs 2.117(b), 17.43 and 20.39 of the ESA 2010 do not enable the applicant mutual institutions, which act as financial institutions that administer pension funds, to be classified within the general government category.

78.

I agree with the Bundesbank (Central Bank) that the authority which regulates the legal framework of occupational mutual institutions can be regarded as general government but not the occupational mutual institutions themselves, which have complete autonomy and responsibility vis-à-vis their members and act as financial intermediaries in the administration of their PFs.

79.

Moreover, as I have already pointed out, paragraph 20.39 of the ESA 2010 indicates that, even where a mutual institution is established by general government, it is not a social security scheme where there is no government guarantee on the level of pensions due.

80.

Nor is the solution which I propose precluded by paragraph 20.10 of the ESA 2010 since, according to the information supplied to the Court, the applicant mutual institutions do not receive transfers from the State budget. Therefore, they cannot be classified as extra-budgetary units.

81.

The same applies to paragraph 20.12 of the ESA 2010, where it states that ‘social security schemes are social insurance schemes covering all or a large part of the community as a whole, which are imposed and controlled by government.’ ( 53 ) By contrast, the applicant mutual institutions cover a limited, circumscribed section of workers (liberal professions) and, I repeat, general government has no control over them.

82.

In short, my view is that the applicant mutual institutions should be classified as PFs, and not as social security funds, within the meaning of Article 1(1) of Regulation 2018/231 and paragraphs 2.105 to 2.110 of Regulation No 549/2013.

83.

The first, second and third questions concern the classification of institutional units on the basis of whether or not they carry out a commercial activity.

84.

Acceptance that the applicant mutual institutions do not form part of the social security funds subsector (S.1314), which is included in the general government sector (S.13), and that they supply financial intermediation services as PFs means, implicitly, that they carry out a market activity.

85.

However, with a view to clarifying the uncertainties raised in the first three questions referred for a preliminary ruling, I believe that it is helpful to confirm why those mutual institutions perform a market activity, according to the terminology of the ESA 2010. Furthermore, that is required by the approach which should govern the application of the ESA 2010.

86.

The binary test (market/non-market) adopted by the ESA 2010 is readily applicable to what can be called the ‘classic’ production of goods and services. However, the application of that test to financial intermediation institutions requires an overall assessment of the indicators in the ESA 2010.

87.

In accordance with paragraph 2.55 of the ESA 2010, ‘the financial corporations sector (S.12) consists of institutional units which are independent legal entities and market producers, and whose principal activity is the production of financial services’. ( 54 )

88.

According to the order for reference, it is common ground that the applicant mutual institutions fulfil the first and third of those three conditions: they are institutions governed by public law and they provide financial intermediation services, as the consequence of the pooling of the risks and needs of those they insure. ( 55 )

89.

The referring court’s uncertainties therefore concern the second condition, in other words, whether the applicant mutual institutions are market producers. In setting out those uncertainties, the referring court refers to the presence or absence of certain quantitative (first and second questions) or qualitative (third question) indicators which determine market output in the ESA 2010.

90.

However, as the ECB observes, ( 56 ) that approach is incomplete: the indicators referred to do not determine the classification of institutional units as market producers, a condition which is derived, fundamentally, from the principal activity performed by those units. Only an overall assessment of their activity will make it possible to reach an acceptable outcome in the framework of the ESA 2010.

91.

The general criteria for differentiating between market producers and output and non-market producers and output are set out in paragraphs 3.16 to 3.26 of the ESA 2010. The referring court’s questions are focused specifically on the interpretation of paragraph 3.19.

92.

In accordance with paragraph 1.37 of the ESA 2010, an activity is to be considered as a market activity when the corresponding goods and services are traded under conditions set out therein, in relation to sellers, buyers and the existence of markets on which sellers and buyers come together. ( 57 )

93.

Market output includes, inter alia, ‘products sold at economically significant prices’, to which paragraph 3.19 of the ESA 2010 refers. ( 58 ) Economically significant prices are prices ‘that have a substantial effect on the amounts of products that producers are willing to supply and on the amounts of products that purchasers wish to acquire’.

94.

Economically significant prices arise, in turn, when two conditions apply: (a) the producer has an incentive to adjust supply either with the goal of making a profit in the long run or, at a minimum, covering capital and other costs; and (b) consumers have the freedom to purchase or not purchase and make the choice on the basis of the prices charged.

95.

Since it is not always possible to verify fulfilment of those two conditions, paragraph 3.19 in fine of the ESA 2010 sets out a quantitative criterion based on the covering of at least 50% of the costs through the sales of the institutional unit concerned. ( 59 )

96.

In accordance with paragraph 2.40 of the ESA 2010, ‘differentiating between market and non-market, and so for public sector entities classification between the general government sector and the corporations sector, depends on the criteria set out in paragraph 1.37’.

97.

That paragraph (1.37) is part of Chapter 1 of Annex A, which contains an overview of the concepts and principles of the ESA 2010. Therefore, the conditions laid down in paragraph 1.37 must be supplemented by the indicators contained in the special chapters of the ESA 2010.

98.

I recognise that the criteria for differentiating between market and non-market output set out in paragraphs 3.16 to 3.26 and 1.37 of the ESA 2010 are not straightforward to apply to financial corporations like the applicant mutual institutions.

99.

The referring court is aware of that difficulty ( 60 ) when it places the emphasis on paragraph 3.19 of the ESA 2010. Although the referring court accepts that the first condition laid down in that paragraph is satisfied in this case (the producer has an incentive to adjust supply, at least with the goal of covering costs), the same cannot be said of the second condition (consumers have the freedom to purchase or not purchase and make the choice on the basis of the prices charged).

100.

According to the referring court’s reading of paragraph 3.19 of the ESA 2010, that provision requires, in principle, that all consumers must have the freedom to purchase or not purchase all the products offered to them and to choose those products on the basis of the prices charged. That does not occur in the case of the applicant mutual institutions, whose services are available only to professionals whose membership of those institutions is compulsory and to those who, under strict conditions, are entitled to become voluntary members. Moreover, the contributions paid by the latter are not the consequence of the interplay of supply and demand under market conditions. ( 61 )

101.

The referring court appears, therefore, to be inclined to disagree (contrary to the first-instance court’s position) ( 62 ) that the quantitative criterion of 50% (paragraph 3.19 in fine of the ESA 2010) is sufficient for classification as a market producer. In any event, that classification requires the fulfilment of two elements of the definition of economically significant prices (points (a) and (b) of paragraph 3.19 of the ESA 2010). ( 63 )

102.

Finally, in the referring court’s view, paragraph 1.37 takes the same approach as paragraph 3.19(b) of the ESA 2010, in setting out the trading conditions between sellers and buyers, and the requirement of the existence of effective markets to which sellers and buyers have access and about which they have information. Yet paragraph 1.37 accepts that an effective market can operate even if those conditions are not met perfectly, a statement which leads the referring court to question what should be ‘the nature and intensity of the access restrictions or purchase obligations that would be necessary in order to rule out market-driven activity and economically significant prices’. ( 64 )

103.

For my part, I consider that an isolated interpretation of the two paragraphs at issue (paragraphs 3.19 and 1.37 of the ESA 2010), like that carried out by the referring court, would probably be correct if the remaining rules included in the ESA 2010 were disregarded. Those rules make it possible to overcome the apparent contradiction between those two paragraphs and other, equally important paragraphs of its enacting terms.

104.

The isolated and strict application of the ‘economically significant prices’ factor or of the conditions laid down in paragraph 1.37 of the ESA 2010 to entities which provide financial intermediation services does not appear to me to be appropriate. In order to classify such institutions as market producers, the decisive factor is, I stress, an overall assessment ( 65 ) of their principal activity, which reflects their economic behaviour.

105.

I stated above that the applicant mutual institutions are institutional units which, in accordance with paragraph 2.55 of the ESA 2010, are part of the ‘financial corporations’ sector, whose principal activity is the production of financial services. Paragraph 2.69 of the ESA 2010 identifies insurance corporations and PFs as financial intermediaries.

106.

Therefore, the final assessment in order to determine whether the applicant mutual institutions are market producers must be carried out, in so far as is possible, by bringing the general criteria laid down in paragraphs 3.16 to 3.26 and 1.37 of the ESA 2010 into line with paragraphs 2.55 to 2.62, 20.32 to 20.34 and 20.38 of the ESA 2010, which refer specifically to the activity of financial intermediation and to PFs as financial intermediaries.

107.

In order to assist with that interpretation, the Court may provide the referring court with a set guidelines, which I shall list below.

108.

First, the (voluntary or compulsory) legal relationship between the institutional unit and the insured persons is not decisive for the purposes of assessing whether the financial intermediation performed by the applicant mutual institutions is a market activity. What is important is not that the engagement of the services of those mutual institutions is compulsory for the majority of their contributors but rather the principal activity which the institutions carry out, which is financial intermediation. ( 66 )

109.

Secondly, the fact that the applicant mutual institutions are not authorised to distribute profits, which they must use for the payment of benefits to their members, is irrelevant for the purposes of classifying their financial intermediation activity as a market activity. Paragraph 2.107 specifically characterises PFs as financial corporations whose aim is to pay benefits in the event of the retirement, death and disability of those whom they insure.

110.

Thirdly, financial intermediation is a market activity when PFs act to maximise their utility given their limited resources, by buying according to which products best meet their needs at the offered price (paragraph 1.37(2) of the ESA 2010). That indicator is fulfilled when a financial intermediary, like the applicant mutual institutions, places itself at risk by incurring liabilities on its own account (paragraph 20.33 of the ESA 2010), where there is no government guarantee on the level of pensions due, and the level of pensions depends on asset performance (paragraph 20.39). ( 67 )

111.

Fourthly, in accordance with paragraph 1.37(3) of the ESA 2010, financial intermediation is a market activity if effective markets exist where sellers and buyers have access to, and information on, the market. An effective market can operate even if these conditions are not met perfectly.

112.

For the purposes of conducting that assessment, the fact that the financial intermediary may obtain as consumers of its services only a defined group of clients (in the case of the mutual institutions, those who practise the profession covered) and may not provide its services to any consumer who is prepared to pay the contributions is, once again, irrelevant. Further, paragraph 2.107 of the ESA 2010 stipulates that participants in PF schemes include employees of a single enterprise or a group of enterprises, employees of a branch or industry, and persons having the same profession.

113.

The quantitative criterion of 50% (paragraph 3.19 in fine of the ESA 2010) does not determine whether or not PFs carry on a commercial activity. That can be inferred from paragraph 20.34 of the ESA 2010: ‘applying the quantitative criterion of the market/non-market test to public corporations involved in financial intermediation or in managing assets is generally not relevant, because their earnings arise from both property income and holding gains.’ The 50% test set out in paragraph 3.19 in fine of the ESA 2010 does not appear to be conclusive in this case. ( 68 )

114.

Paragraph 2.55 in fine of the ESA 2010 provides that the financial corporations sector (S.12) also includes ‘institutional units providing financial services, where most of either their assets or their liabilities are not transacted on open markets’. That occurs in the case of the PFs of the applicant mutual institutions, which usually operate on markets limited by law.

115.

Lastly, the financial intermediation performed by the applicant mutual institutions cannot be classified as non-market output that is provided for free or at prices that are not economically significant.

116.

As is stated in paragraph 3.23 of the ESA 2010, non-market output exists because it is technically impossible to make individuals pay for collective services because their consumption of such services cannot be monitored and controlled. The production of collective services is organised by government units and financed out of funds other than receipts from sales, namely taxation or other government incomes. The financial intermediation undertaken by the applicant mutual institutions is intended, by contrast, to guarantee that insured persons receive their (retirement, death and disability) benefits, through the investment of their contributions in financial assets in order to obtain profits with which to cover those benefits in addition to the operating costs of the institutions. Benefits are not paid from taxation or other government incomes.

117.

In summary, to determine whether mutual institutions like the applicants are market producers or non-market producers, an overall assessment must be carried out taking account of the general criteria laid down in paragraphs 3.16 to 3.26 and 1.37 of the ESA 2010, and paragraphs 2.55 to 2.62, 20.32 to 20.34 and 20.38 of the ESA 2010 relating to the activity of financial intermediation.

118.

In the light of the foregoing considerations, I propose that the Court of Justice reply to the Bundesverwaltungsgericht (Federal Administrative Court, Germany) as follows.

Article 1(1) of Regulation (EU) 2018/231 of the European Central Bank of 26 January 2018 on statistical reporting requirements for pension funds, and, as a whole, the paragraphs included in Annex A to Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013 on the European system of national and regional accounts in the European Union,

are to be interpreted as meaning that occupational mutual social insurance institutions created by organisations governed by public law, having a system of compulsory membership for the members of certain professions, constitute pension funds that are subject to statistical reporting requirements and not social security funds, where those institutions carry out financial intermediation in order to pay the pension, death and disability claims of their members, pay their operating costs using their members’ contributions, which are set by the institutions themselves, manage themselves, are responsible for their own financial management, and do not have State support to pay benefits to their members.