When workers move from one country to another, they keep their statutory (or state) pension rights. However, they often lose rights to supplementary pension schemes, such as group-insurance contracts, pay-as-you-go schemes for whole branches or sectors, funded schemes and 'pension promises'.
The Commission identified this financial loss for mobile workers as an impediment to workers' mobility. As mobility is a basic right of workers in the EU and could help solve many of the problems that labour markets are facing, the Commission proposed, in October 2005, a directive on improving the portability of supplementary pension rights.
The draft directive focused on portability, defined as the "possibility of acquiring and keeping pension entitlements in the event of professional mobility". This comprises three main areas, namely acquisition conditions, the preservation of dormant rights and the transferability of rights (defined as "transferring a capital representing the acquired pension entitlements from one scheme to another").
In the European Parliament, the draft Directive is disputed, mainly due to the criticism of companies which say that the Commission scheme would burden them with having to pay mobile workers' supplementary pensions. MEPs tabled more than 200 amendments, many of which addressed this concern. Dutch rapporteur Ria Oomen-Ruijten negotiated a set of 30 compromise amendments, which the two major groups - her own EPP-ED (centre-right) and the PSE (Socialists) - could agree to.
The amendments adopted fence the Directive's scope in on pension schemes "established in conformity with national legislation and practice and linked to an employment relationship, intended to provide a supplementary pension for employed persons". They clarify that the Directive does not apply retrospectively to the time before its entry into force, nor does it apply to schemes that have stopped accepting new members, to insolvency protection schemes and to liquidation procedures.
Liliane Volozinskis, director for social affairs and employment policy with the small-business association UEAPME, said: "The Parliament’s Committee took a very important decision in deleting all references to portability. The original proposal by the European Commission was completely unworkable, as it failed to consider the complexity and technicalities of transferring rights from one country to another, not to mention the intricacy of the fiscal aspects involved."
The Parliament's plenary is set to vote on the draft directive on 24 April 2007. The German Presidency has already signalled its intention to further water-down the Commission draft.