Sections

New EU pensions portability draft text published

EUROPE - The Finnish presidency of the European Union has drafted a new text of the proposed directive on pensions portability, in a bid to meet some of the concerns expressed by Member States.

The new text of the much-criticised proposal, according to a report to permanent representatives seen by IPE, "aims at striking a balance between the need to reduce obstacles to the mobility of workers and the need to take into account the wide diversity of supplementary pension schemes in the Member States".

"At the same time, the aim is not to discourage further development of pension schemes and the maintenance of those which already exists." The new draft is the outcome of the Council working group on Social Questions that discussed the Commission's portability proposal.

The Presidency says that while some regret the new draft is a "lowered level of ambition", it would still mark a "clear step forward in improving the situation for mobile workers in relation to supplementary pension schemes by safeguarding the presentation of pension rights through a fair treatment of dormant rights".

The new text now focuses on two key issues. They are a shift of focus from transferability to the preservation of dormant pension rights and the scope of the directive.

"The question of transferability is the major issue which affects all other provisions of the directive, in particular those on the scope and the preservation of dormant rights," the document states.

"A large number of delegations consider that the preservation of dormant pension rights should be the core of this directive and transferability should be left as a matter for national legislation." But it acknowledges that a number of delegations favour a transfer requirement in the directive.

It adds that some delegations have stressed that the scope should be as wide as possible - although several have supported exclusions. "In particular such concerns related to schemes where outgoing workers who leave the scheme before retirement do not retain any pension rights, to schemes with long vesting periods, and the schemes' ability to pay out and receive transfers."

The vesting criteria and the preservation of dormant pension rights once vested, the report states, have been shown to be key questions in relation to supplementary pension schemes and the mobility of workers.

The new text also stresses that social partners have an important role "in accordance with national law and practice".

Another issue addressed is that of self-employed workers - a majority of delegations consider they should be excluded from the directive.

The new draft will be tabled at the Council of Social Affairs Ministers on December 1.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2571

    Asset class: Equities.
    Asset region: US.
    Size: $400m.
    Closing date: 2019-11-14.

Begin Your Search Here
<