EUROPE - Belgium and Germany have been threatened with court over failure to comply with European Union (EU) regulations on cross-border pension movements.

The European Commission warned that the countries were infringing on rights of free movement of citizens, as well as the transfer of accrued pensions when residing in a different member state.

It said failure to make changes would result in a case being brought before the European Court of Justice (ECJ).

The complaint brought against the German government concerns the reduction of pension payments for German residents leaving the country, with a formerly Bulgarian German national complaining after he was informed his pension payments would be cut by almost 40% to €400 a month if he returned to Bulgaria.

The Commission said any such moves infringed on free movement and indicated that agreements in place since before Bulgaria joined the EU addressed the issues raised.

It urged Germany to apply the agreement "in such a way that the full pension amount is exported when citizens concerned take up their residence in another EU member state".

In the case of Belgium, it was noted that pension payments for former residents were only made via bank transfer in eight EU countries, including France and the Netherlands.

Belgians wishing to draw their pension in any of the other 19 countries have instead only been given the option of payment by cheque, incurring a fee - and thereby a loss - of income.

The Commission said income should not be "reduced in any way" simply because a pensioner has moved.

"By refusing to pay pensions directly to a bank account and using cross-border payments, Belgian pensions beneficiaries in 19 member states suffer delayed access to their pension, as well as disproportionate costs and other inconveniences."

The Commission added: "The method chosen by the Belgian institution for providing the pension to residents of other EU member states is considered an obstacle to the free movement of workers and discriminates, in particular, [against] migrant workers indirectly."

Both countries have been given two months to bring national law in line with EU legislation, or otherwise see cases referred to the ECJ.