Commission defends proposals on pension ‘portability’


Despite failing to reach an agreement with the other EU institutions, the Commission has been sufficiently encouraged by two academic studies to carry on its work on the transferability of company pension schemes when workers move across borders.

“These new studies clearly demonstrate the need for an effective and proportionate directive to reduce obstacles to mobility without placing undue burdens on pension providers,” said EU Commissioner for Employment, Social Affairs and Equal Opportunities Vladimír Špidla, presenting the two studies in Brussels on 22 January 2007. He added: “We need to enable workers to move freely around the EU without losing important work-related pension benefits.”

Supplementary pensions are retirement schemes, and sometimes also invalidity and survivors’ benefits, which supplement or replace statutory social-security schemes. When people move across borders, they often suffer a loss of pension rights. Some occupational pension schemes impose waiting periods while other schemes impose vesting periods. Not all such schemes allow the transfer of rights to other schemes within the same country or between EU member states.

In October 2007, the Commission had to drop a plan to make supplementary pensions transferable across borders throughout the EU (See EURACTIV 10/10/07). However, two academic studies carried out by human resources consultancy Hewitt Associates and by researchers at the Catholic University of Leuven “clearly demonstrate the need for a directive,” the Commission says. The directive, according to the Commission, would “introduce minimum standards to improve mobile workers’ access to supplementary pension rights” and would “protect these rights in the years between leaving an employer and retiring”. 

Both studies seem to confirm that at a time of growing job mobility, there is a need to reduce vesting periods – the length of time that workers have to work in a company before being entitled to benefits from a supplementary pension scheme. 

The Commission announced that over the coming months it will be “working together with the Slovenian Presidency to make progress on finding agreement within the Council and the European Parliament for an effective and proportionate directive that reduces obstacles to mobility without placing undue burdens on pension providers”.

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