EUROPE – The European Commission has admitted that it is “very much aware” that occupational pension schemes lack true portability between European Union member states.

“The Commission is very much aware of the problem that the lack of true ‘portability’ of occupational pensions between member states causes workers,” the Commission says in a communication on the free movement of workers.

The issue of the portability of pensions across EU borders is ongoing. In May 2002 the Commission announced the first stage of consultation of the social partners into the portability of supplementary pension rights.

The Commission also reacts to the European Court of justice’s recent adjudication in the Danner case. It admits that “where national law allows tax deductions in relation to contributions for an occupational pension and private sickness and invalidity insurance, it is discriminatory not to allow equivalent deductions in relation to contributions paid in a migrant workers member state of origin”.

The remarks follow the October 3 judgement in the Danner case. The case involved German-born Rolf Dieter Danner and challenged as contrary to an article of the EC Treaty a Finnish law that taxes pension insurance contributions made in Finland to a foreign institution.

Danner had claimed that Finns wishing to contribute to a scheme outside the country do not receive the same treatment as those paying into domestic schemes. The case focused on whether Finnish legislation violated Article 59 of the European Treaty which deals with the freedom of services.

The Commission says that its 25-page report - “Free movement of Workers – Achieving the Full Benefits and Potential” – is part of a process of addressing the obstacles to the right to free movement by providing accurate and up-to-date information.

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