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Pensions portability directive edges closer

EUROPE - European Union officials say they are now one step closer to finalizing the pensions portability directive, after another attempt to improve cross-border pension arrangements was blocked by ministers from Luxembourg and Germany earlier this month.

Both Luxembourg and Germany recently refused their agreement to the package but a Commission spokesman revealed to IPE there is now a more optimistic line as defeat on the directive is now stuck only with Germany.

Brussels's proposals for a directive, to resolve fair portability rights for the supplementary pensions of employees who move jobs across EU state boundaries, yet again met with lack of agreement by national finance ministers, despite years of wrangling, at a meeting  hosted by the Portuguese government last week in its capacity as current holder of the EU presidency.

In the case of the smaller country, objections are thought to have been based on its high holdings of reserves. Germany came down as an opponent to the directive because it could not support the idea of bringing the vesting qualification period down from 10 years to anything lower than five. The Portuguese presidency was seeking two years - a period agreed to by, notably, the Netherlands.

This surprise blockage means a version of the directive which had cleared through the European Parliament in June has failed to make it during the time of the Portuguese presidency of the EU, which ends on December 31. (See earlier IPE story: Portability seeks amendments after MEPs OK)

While future plans still look vague, it is hoped a resolution may be reached during the six months of the Slovenian presidency, beginning on January 1, 2008. At the time of going to publication, however, that nation's provisional agenda had not been published.

The Commission spokesperson added whatever agreement may be reached, the directive would still not achieve implementation before July 1, 2013 and, even then, would not be applicable retroactively but will only apply to newly-acquired rights.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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