Employees who are European Union citizens moving to a different EU country are a step closer to being able to take their full pension rights with them thanks to a draft law approved by the European Parliament on April 15 2014.
The draft law still needs to be formally approved by the EU Council of Ministers.
“The text represents a genuine improvement for many workers. It is a big step forwards for the free movement of workers and a boost for a social Europe,” said rapporteur Ria Oomen-Ruijten, a Dutch MEP for the centre-right European People’s Party, adding that “a good pension is a necessity, now that Europeans can expect to live much longer.”
Current EU rules ensure that workers moving to another EU country do not lose their statutory pension rights, meaning those provided by the state.
However, no such EU-wide rules exist for supplementary pension schemes, financed or co-financed by employers.
So people who move between EU member states risk losing entitlements built up over a period that is not deemed long enough by the state to which they move.
Under the new legislation, the “vesting period”, meaning the period of active membership of a scheme needed for a person to keep supplementary pension entitlements, must not exceed three years.
MEPs inserted a clause stipulating that cross-border workers must also benefit from the same level of protection under the directive, which member states will have four years to put into effect.
The draft text was tabled by the European Commission in 2005 and revised in 2007.
The European Parliament’s first reading took place in 2007. The legislation was then blocked in the Council for six years, due to differences among member states’ pension schemes and the unanimous vote requirement.
The entry into force of the Lisbon Treaty meant the text could be put to a qualified majority vote, enabling negotiations to resume.
These negotiations led to the agreement between the European Parliament and member states approved by MEPs on April 15.