EUROPE – A number of EU member states would be willing to reach an agreement with the European Commission on a proposed pension portability directive if Brussels agreed to drop pillar one of the revised IORP Directive, IPE understands.

Two sources close to the Commission told IPE negotiations were ongoing among a number of member states, including the Netherlands, to reach agreement on both the pension portability directive and the revised IORP Directive.

"Some countries are currently negotiating the implementation of the pension portability directive, for which the voting is imminent," they said.

"They would be ready to make concessions on some controversial elements of the directive, such as vesting periods and dormant rights, if Brussels abandoned pillar one of the revised IORP Directive."

The sources also noted that five countries currently opposed the shape of the first pillar within the IORP II Directive, namely Belgium, Germany, Ireland, the Netherlands and the UK.

"There is an increasing concern over the proposals and the impact they could have on pension schemes in those countries," they said.

"One more member state opposing the IORP II Directive would lead to a blocking minority, which would then see the proposals being definitely dropped."

According to the sources, the growing number of member states opposing the IORP II Directive has led a number of officials within the Commission to "lose faith" in the directive's future, if it remains in its current form.

"The Commission has seen some of its proposals on pension reforms, including the pension portability directive, rejected in the past – they don't necessarily want to renew the experience," they said.

"At the same time, the current Commission – which is likely to change next year, with a new round of commissioners coming in – wants to leave a legacy and speed up the introduction of the revised directive, even if it means focusing on pillars two and three for now."

The sources insisted the Commission was keen to reach an agreement on the portability directive.

"The project has dragged on since then due to the numerous disagreements and developments happening over time," they said.

The Commission first proposed a draft pension portability directive – aiming to achieve a greater level of harmonisation in vesting periods and transfer rights – in 2005.

After long negotiations, however, it failed to reach unanimity from all the member states represented in the Council, and the directive was rejected.

This ultimately led the Commission to amend the directive, excluding provisions on transferability to focus instead on vesting periods and dormant rights.

Yet again, disagreements arose among member states as to what vesting period should be agreed, since this period sometimes varies from one to three years according to the country, while other countries lack vesting periods altogether.

In September last year, Jung-Duk Lichtenberger, the economic and policy desk officer at the Commission's insurance and pensions unit, said Brussels was planning to step up negotiations on its portability directive and set up tracking services for pension rights.

He added that the Commission was also hoping to "get things moving" to develop the single market for personal pension schemes and improve information for participants.