This proposal would ensure that supplementary pension schemes can be easily transferred within and between Member States. EU law already provides for the transfer of state pension rights between Member States; the same rules however do not apply to supplementary pensions. The Commission proposes that rules similar to those that apply to state pensions should also apply to supplementary pensions.
Main Objectives
This proposed Directive aims to reduce the obstacles to worker mobility within and between Member States caused by supplementary pensions. This would be achieved by ensuring that Member States put in place harmonised rules on supplementary pension rights. The proposal would also improve the information given to workers on supplementary pension rights and how moving countries may affect these rights.
The Commission defines a supplementary pension scheme as any occupational retirement pension scheme, established in conformity with national legislation and linked to an employment activity, which is intended to provide a pension for employed or self-employed persons.
Member State Obligations
The proposal requires Member States to ensure that:
• where pension rights have not yet been acquired when employment is terminated, all the contributions paid by, or on behalf of, the outgoing worker are reimbursed or transferred
• where a minimum age is stipulated for the acquisition of pension rights, this is not more than 21 years
• a worker may join a supplementary pension scheme after a maximum period of employment of one year or, where necessary, no later than once he has reached the required minimum age
• a worker acquires pension rights after a maximum membership period of two years
Furthermore, Member States must adopt the measures they deem necessary in order to ensure a fair adjustment of dormant pension rights so as to ensure that outgoing workers are not penalised. Dormant rights are acquired pension rights that are retained under the scheme in which they have been accrued by a deferred beneficiary.
Transferability
Unless a capital payment is made, Member States must take action to ensure that if an outgoing worker is not covered by the same supplementary pension scheme in their new job, then they may obtain on request and within 18 months after the end of their employment the transfer within the same Member State or to another Member State of all their acquired pension rights.
Information
Member States must also ensure that information on pension schemes is provided in understandable written form. This information should cover:
• the conditions governing the acquisition of supplementary pension rights and the effects of applying them when employment is terminated
• the pension benefits envisaged when employment is terminated
• the conditions governing the preservation of dormant pension rights
• the conditions governing the transfer of acquired rights
• details of any administrative costs to be paid during a transfer; Member States must take necessary action to prevent such costs from being disproportionate to the length of time the outgoing worker has been a scheme member
Limits of the Directive
This Directive will not apply to:
• supplementary pension schemes which, as at the date of entry into force of the Directive, will no longer be open to new members
• supplementary pension schemes that are subject to measures intended to preserve or restore their financial situation
• insolvency protection systems, compensation arrangement schemes or national reserve funds
The Directive will also not apply to schemes covered by Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, self-employed persons and to members of their families within the EU covering:
• sickness and maternity benefits
• invalidity
• accidents at work and occupational diseases
• old age and death, death grants
• unemployment benefits and family benefits
• benefits for the dependent children of pensioners and for orphans
Implementation
Member States must adopt laws and provisions necessary to comply with the Directive. Member States may exempt pay-as-you-go pension schemes. All exemptions must, however, be notified to the Commission.
Member States may adopt or maintain existing rules on supplementary pension rights which are more favourable than those rights created by the Directive. The Directive however cannot be used as a means to reduce the degree of transferability of supplementary pension rights which exist in the Member States.
Commission Responsibilities
The Commission will submit a Report to Parliament and Council every five years. Within ten years, the Commission must present a proposal that contains any amendments to this Directive which may be necessary in order to ensure equal treatment in terms of the transferability of acquired rights for workers covered by supplementary pension schemes.