Portability

The European Parliament, the Council and the European Commission reached a compromise on 27 November 2013 on the directive on minimum requirements for enhancing worker mobility by improving the acquisition and preservation of supplementary pension rights. COREPER endorsed the text on 4 December 2013 and the Employment Committee of the European Parliament adopted the text on 9 December 2013. The Directive does not cover, what is often called "portability" of supplementary pensions, i.e. the possibility of keeping pension entitlements by transferring them to a new scheme in the event of professional mobility. However, the agreed Directive sets out certain rights and obligations for members of supplementary pension schemes.

The directive relates to a European Commission proposal dating back to 2005 on which the Parliament adopted its first reading in 2007. Since then, the proposal has remained blocked in the Council. In 2012 the European Council called for the sustainability of pension systems to be improved and for the acquisition and preservation of supplementary pension rights of mobile workers to be strengthened. Following this request, the Cyprus, Irish and Lithuanian Presidencies have resumed work on the directive. The new rules will be based on Article 46 of the Treaty on the Functioning of the EU (free movement of workers).

Main features of the agreed directive:

  • the directive focuses on cases of labour mobility between Member States only. The Council and the Commission have however added a statement to the minutes of the Council to ensure equal treatment of internally and externally mobile workers. This is up to the Member State. The directive applies to supplementary pension schemes apart from the schemes covered by Regulation 883/2004 and shall only apply to periods of employment falling after its implementation;
  • the directive defined the principle of “outgoing worker” as an active scheme member whose current employment relationship terminates for reasons other than becoming eligible for a supplementary pension, and who moves between Member States;
  • any vesting periods and/or waiting periods (combined) are limited to a maximum of three years;
  • the minimum age for starting the vesting of pension rights, may not exceed 21 years;
  • where a worker has not yet acquired vested pension rights when the employment relationship ends, the supplementary pension scheme shall reimburse the contributions paid by the outgoing worker, or paid on behalf of the outgoing worker;
  • Member States must ensure that outgoing workers’ dormant pension rights or their values are treated in line with the value of the rights of active scheme members, or the development of pension benefits currently in payment, or by other means, such as: safeguarding the nominal value of the rights or adjusting the value of the dormant rights.
  • The Member States must ensure that active scheme members can obtain on request information on how a termination of employment would affect their supplementary pension rights. Furthermore, Member States shall ensure that deferred beneficiaries can obtain on request information regarding the value of their dormant rights or an assessment of the dormant pension rights carried out no more than 12 months preceding the date of the request and the conditions governing the treatment of dormant pension right. A Member State may request that an outgoing worker notifies his/her scheme in case of moving to another Member State.
  • In various parts of the text, the role of the social partners is referred to. Implementation of the provisions set out in this directive can be delegated to social partners, as long as provisions implemented by them do not offer less favorable protection and do not create obstacles to the freedom of movement.
  • The text mentions that Member States shall adopt the Directive no later than 4 years after the date of entry into force.