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Mercer Germany blasts Portability Directive's stance on vesting periods

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  • Mercer Germany blasts Portability Directive's stance on vesting periods

EUROPE – A consultant at Mercer Germany has spoken out against the current draft of the European Commission's Portability Directive, saying it was a means of introducing shorter vesting periods "through the backdoor".

The European Council has agreed on a Portability Directive that recommends leaving decisions on domestic migrant labour to individual EU member states.

But it also aims to introduce unified vesting periods for all workers crossing borders.

Stefan Oecking, head of international retirement at Mercer Germany, said: "The introduction of two sets of vesting rights might prove impossible if not inadmissible."

In effect, he said, all countries might have to introduce the lower vesting period recommended for cross-border workers, if only to avoid breaching the principles of equality set down in national and EU law.

Oecking argued that the Commission's efforts to dictate the particulars of vesting rights "ran contrary to the subsidiarity principle".

He also pointed out that the Commission, in order to sidestep the subsidiarity principle, claimed that too high vesting periods hindered workers' mobility within the EU.

But Oecking added that only 1% of workers in Europe cross borders during their working life.

He said the introduction of shorter vesting periods "via the back door" meant the blame for extra costs would lie with the countries themselves, as they were officially setting the periods and not the European Commission.

In his original guest commentary on the subject, published by the German newsletter Leiter-bAV, Oecking called the directive a "fake" and said there was no real choice for member states setting vesting periods.

The German employer association BDA has frequently warned against lowering the vesting period, which is currently five years in the German second pillar, as this would increase costs for companies.

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