How are pensions calculated under the pro rata rules in the 2026 UK/EU Treaty in relation to Gibraltar?
Short answer
Under the 2026 UK/EU Treaty in relation to Gibraltar, each jurisdiction calculates a theoretical full pension as if all periods were completed under its own system. It then applies a pro rata formula, paying only the proportion that reflects periods completed under its legislation. The worker receives the higher of any standalone or pro rata entitlement.
Detailed answer
Article SSC.45 establishes a two-step calculation. First, each institution determines the theoretical amount payable if all insurance periods had been completed under its own law. Second, it calculates the actual amount by applying the ratio of domestic insurance periods to total aggregated periods. This ensures Gibraltar is responsible only for the share corresponding to contributions made under its legislation, rather than funding the entire pension of workers with mixed Spanish and Gibraltar careers.