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IPE special report May 2018

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European Parliament, member states reach agreement on Portability Directive

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The European Commission’s Portability Directive is one step closer to reality after representatives from the European Parliament and EU member states reached an agreement on some of the details of the legislation.

The Directive – revived after internal markets commissioner Michel Barnier abandoned plans to include capital requirements for pension funds under the revised IORP Directive – will create equal footing for workers moving among member states, and those who work across European borders.

MEP Ria Oomen-Ruijten said workers could now enjoy “full” pension rights if they moved within the single market.

The Dutch politician – a member of the European People’s Party faction within Parliament and the rapporteur responsible for the Directive – added: “The legislation will help to eliminate barriers to the free movement of workers.”

The agreement would see a vesting period for pension rights of three years for workers captured by the Directive, a controversial timeframe, as it is lower than those applied by a number of member states for domestic workers.

Germany, for example, currently has a five-year vesting period, leading consultancy Mercer to criticise the Directive as an attempt to lower the qualifying timeframe “through the backdoor”.

It is unclear whether the European Parliament will vote on the Directive before the parliamentary elections in 2014.

However, once passed, member states will have four years to apply the changes to national law.

This is not the Commission’s first attempt to pass the Portability Directive, first published eight years ago but abandoned following resistance from a number of member states.

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