European Parliament legislative resolution of 20 June 2007 on the proposal for a directive of the European Parliament and of the Council on improving the portability of supplementary pension rights (COM(2005)0507 – C6-0331/2005 – 2005/0214(COD))
(Codecision procedure: first reading)
The European Parliament
– having regard to the Commission proposal to the European Parliament and the Council (COM(2005)0507)(1)
– having regard to Article 251(2) and Articles 42 and 94 of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C6-0331/2005),
– having regard to Rule 51 of its Rules of Procedure,
– having regard to the report of the Committee on Employment and Social Affairs and the opinions of the Committee on Economic and Monetary Affairs and the Committee on Women's Rights and Gender Equality (A6-0080/2007),
1. Approves the Commission proposal as amended;
2. Calls on the Commission to refer the matter to Parliament again if it intends to amend the proposal substantially or replace it with another text;
3. Instructs its President to forward its position to the Council and Commission.
Position of the European Parliament adopted at first reading on 20 June 2007 with a view to the adoption of Directive
of the European Parliament and of the Council on improving the portability of supplementary pension rights
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Articles 42 and 94 thereof,
Having regard to the proposal from the Commission
Having regard to the opinion of the European Economic and Social Committee(1)
of the Committee of the Regions
Acting in accordance with the procedure laid down in Article 251 of the Treaty(2)
(1) The free movement of persons is one of the fundamental freedoms of the Community; in Article 42, the Treaty stipulates that, in
accordance with the procedure referred to in Article 251, such
measures in the field of social security shall be adopted
as are necessary to provide freedom of movement for workers.
(2) The social protection of workers with regard to pensions is guaranteed by statutory social security schemes, together with supplementary social security schemes linked to the employment contract, which are becoming increasingly common in the Member States.
(3) The legislator
has wide powers of discretion regarding the choice of measures which are the most appropriate when it comes to achieving the objective of Article 42 of the Treaty; the system of coordination provided for in Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of
their families moving within the Community(3)
and Council Regulation (EEC) No 574/72(4)
of 21 March 1972 laying down
the procedure for implementing Regulation (EEC) No 1408/71 and, in particular, the rules applicable to aggregation do not relate to supplementary pension schemes, except for schemes covered by the term "legislation", as defined in the first paragraph of Article 1(j) of Regulation (EEC) No 1408/71, or which have been the subject of a declaration by
a Member State pursuant to that provision
. Supplementary pension schemes should therefore be the subject of specific measures in order to take account of their nature and specific characteristics and of the diverse nature of these schemes within the Member States and from one Member State to another, and in particular the role played by the social partners in their implementation.
(4) Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community(5)
represents an initial specific measure designed to improve the exercise of the right of employed and self-employed persons
to freedom of movement as regards supplementary pension schemes.
(5) Recourse should also be had to Article 94 of the Treaty, given that the disparities between the national legislation governing supplementary pension schemes are likely to hamper both the exercise of the right of workers to freedom of movement and the operation of the internal market. Thus, in order to improve the rights
of workers moving within the Community and within the same Member State, provision should be made for
certain minimum requirements for the establishment and preservation of the vested
pension rights of outgoing workers in a supplementary pension scheme linked to an employment relationship
(6)Moreover, account should be taken of the characteristics and special nature of supplementary pension schemes and the way they differ within and among the Member States. The introduction of new schemes, the sustainability of existing schemes and the expectations and rights of current pension scheme members should be adequately protected. This Directive should also take particular account of the role of the social partners in designing and implementing supplementary pension schemes.
(7)This Directive should not require Member States that have no supplementary pension schemes to adopt legislation to introduce such schemes.
(8)This Directive should apply only to supplementary pensions which, according to the rules of the relevant pension scheme or national law, are based on reaching retirement age or fulfilling other conditions. It should apply neither to individual pension arrangements with no employer participation nor to invalidity or survivors" pensions.
(9)This Directive should apply to all supplementary pension schemes established in conformity with national legislation and practice that offer supplementary pensions for workers, such as group insurance contracts, pay-as-you-go schemes agreed by one or more branches or sectors, funded schemes or pension promises backed by book reserves, or any collective or other comparable arrangement.
(10)This Directive should not apply to supplementary pension schemes that have been closed to the effect that no new members can be accepted, because the introduction of new rules could place an unjustifiable burden on such schemes.
(11)This Directive does not aim to harmonise or affect national law on reorganisation measures and winding-up proceedings; for these purposes it is irrelevant whether any such proceedings are opened because of insolvency, or whether they are entered into voluntarily or compulsorily. Similarly, this Directive does not affect national legislation on reorganisation measures under Directive 2001/17/EC(6). Measures taken under Article 16(2) of Directive 2003/41/EC(7) do not constitute reorganisation measures for these purposes.
(12)This Directive should not affect any arrangements for insolvency protection or compensation arrangements which are not part of a supplementary pension scheme linked to an employment relationship and which aim to protect the pension rights of workers in the event of insolvency of the undertaking or the pension scheme. Similarly, this Directive should not affect national pension reserve funds.
(13)Since supplementary retirement provision is becoming increasingly important in all the Member States for securing people's standard of living in old age, the conditions for acquiring, maintaining and transferring vested pension rights should be improved.
(14)If the pension scheme or employer bears the investment risk (particularly for defined-benefit schemes), the scheme should refund the contributions of the outgoing worker, regardless of the current investment value of the contributions. If the outgoing worker bears the investment risk (particularly for defined-contribution schemes), the pension scheme should refund the investment value produced from these contributions. The investment value may be higher or lower than the sum of the contributions paid by the outgoing worker. If the investment value is negative, the amount should not be repaid.
(15)Outgoing workers should have the right to leave their vested pension rights as dormant rights in the supplementary pension scheme in which their entitlement was established.
(16) In conformity with national legislation and practice,
steps should be
taken to ensure fair treatment of the value
of dormant rights. The value of the rights when the employee leaves the pension scheme can be calculated according to generally recognised actuarial principles. In calculating the value, account should be taken of the particularities of the scheme, the interests of the outgoing worker, and those of the members remaining in the
(17)If the value of the vested pension rights of an outgoing worker does not exceed a threshold amount established by the Member State, and in order to avoid excessive costs arising
from the management of a large number of low-value dormant rights, pension schemes must be given the option not to preserve those vested pension rights, but to pay
a capital sum in proportion to the vested rights. The amount of the capital payment should always be determined by recognised actuarial principles and reflect the current value of the vested pension rights at the time of the payment
(18)This Directive does not aim to limit outgoing workers" ability to transfer vested pension rights. To encourage the freedom of movement for workers, Member States should endeavour, as far as possible and in particular when introducing new supplementary pension schemes, gradually to improve the transferability of vested pension rights.
(19) Without prejudice to Directive 2003/41/EC
who exercise or plan to exercise their right to freedom of movement should be suitably informed by those responsible for managing supplementary pension schemes, particularly regarding how a termination of their employment would affect their supplementary pension rights.
(20) In view of the diverse nature of supplementary social security schemes, the Community must confine itself to establishing the objectives to be achieved in general terms, which means that a
directive is the appropriate legal instrument.
of this Directive
, namely to reduce the obstacles to the exercise of the right of workers to freedom of movement on the one hand
and to the operation of the internal market on the other
, cannot be sufficiently achieved by
the Member States and can
therefore, by reason
of the scope of the measures, be better achieved at
Community level, the Community may adopt measures
in accordance with the principle of subsidiarity as
set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out
in that Article, this Directive, based on an impact assessment conducted with the help of the committee in the area of supplementary pensions, does
not go beyond what is necessary in order
to achieve that objective
(22) This Directive establishes minimum requirements, thus enabling the Member States to adopt or maintain more favourable provisions. The implementation of this Directive cannot be used to justify a regression vis-à-vis the existing situation in each Member State.
(23) In view of the need to take account of the effects of this Directive, in particular on the financial sustainability of supplementary pension schemes, the Member States may be granted more time in which gradually to implement those provisions which are likely to have effects of this kind.
(24) In accordance with the national provisions governing the organisation of supplementary pension schemes, the Member States may grant the social partners, at their joint request, responsibility for implementing this Directive as regards the provisions relating to collective agreements, provided that they take all the necessary steps to ensure that they are at all times able to guarantee the outcomes prescribed in this Directive,
HAVE ADOPTED THIS DIRECTIVE:
The aim of this Directive is to facilitate the exercise of the right of persons
to freedom of movement and of the right to occupational mobility, as well as the early, comprehensive development of supplementary pension provision,
the obstacles created by certain provisions on
supplementary pension schemes
1. This Directive applies to supplementary pension schemes apart from the schemes covered by Regulation (EEC) No 1408/71 on the coordination of social security schemes
2.This Directive does not apply to the following:
supplementary pension schemes that, on ...(8), no longer accept new active members and remain closed to them;
supplementary pension schemes that are subject to measures that provide for intervention by a Member State's authority or court, with the aim of safeguarding or restoring their financial situation, including liquidation procedures; or
insolvency protection arrangements, compensation arrangements and national pension reserve funds.
For the purposes of this Directive
"supplementary pension" means a
retirement pension provided
for by the rules of a supplementary pension scheme established in conformity with national legislation and practice
"supplementary pension scheme" means a pension
scheme established in conformity with national legislation and practice and linked to an employment relationship,which is
intended to provide a supplementary pension for employed persons
scheme members" means workers
whose current employment relationship
entitles them or is likely to entitle them, after fulfilling any membership conditions,
to a supplementary pension in accordance with the provisions of a supplementary pension scheme;
pension rights" means any entitlement to a supplementary pension that has been acquired, after fulfilling any membership conditions,
under the rules of a supplementary pension scheme and, where applicable, under national legislation;
"vesting period" means the period of active membership of a scheme required under national law or under the rules of a supplementary pension scheme in order to trigger entitlement to a supplementary pension;
"outgoing worker" means an active scheme member whose current
employment relationship ends before he has acquired a supplementary pension
"inactive scheme member"
means a former member of a
supplementary pension scheme who has acquired pension rights in the scheme but is no longer an active member of the scheme and is not yet receiving any
supplementary pension from the scheme
"dormant pension rights" means vested
pension rights retained in
the scheme in
which an inactive scheme member
"value of dormant entitlement"
means the capital value of the pension rights, calculated according to recognised actuarial principles in conformity with national practice
Conditions governing acquisition
The Member States shall take all necessary steps to ensure that:
where an outgoing worker has not yet acquired vested pension rights when the employment relationship is terminated, the supplementary pension scheme shall reimburse the contributions paid by the outgoing worker, or by the employer on the worker's behalf, in accordance with the relevant legal provisions or collective agreements or contracts, or, if the outgoing worker bears the investment risk, the investment value arising from those contributions
where the supplementary pension scheme stipulates a vesting period, that period shall not exceed five
years. In any event, no vesting condition shall be applied to the member of a supplementary pension scheme once that member has reached the age of 25;
a worker may join a supplementary pension scheme after a maximum period of employment of one year or, where appropriate
, no later than once he has reached the required minimum age;
in objectively justified cases, the Member States may allow the social partners to include in collective agreements non-discriminatory arrangements not covered by points (a) and (b), on the basis that those arrangements provide at least equivalent protection
Preservation of dormant pension rights
1.Member States shall adopt the measures they deem necessary to ensure that outgoing workers can retain their vested pension rights in the supplementary pension scheme in which they have acquired them, in accordance with paragraphs 2 and 3.
2. Member States shall adopt the measures they deem necessary, having regard to the nature of the pension scheme,
in order to ensure fair treatment
of the value of the
dormant pension rights of outgoing workers and to protect those pension rights against the risk of insolvency of the undertaking. Fair treatment means, in particular, that:
the value of the dormant rights develops generally in line with the value of the rights of active scheme members;
the pension rights in the supplementary pension scheme are set as a nominal sum;
the inactive scheme member continues to benefit from a rate of interest built into the pension scheme; or
the value of the dormant pension rights is adjusted in accordance with the inflation rate, salary levels, current pensions or the return on investment intended by the supplementary pension provider.
3. The Member States may allow supplementary pension schemes not to preserve vested
rights but to pay
a capital sum equivalent to the value of the vested pension rights to the outgoing worker, as long as the value of the vested pension rights does
not exceed any
threshold established by the Member State concerned. The Member State shall inform the Commission of any
4.The Member States may allow the social partners to include in collective agreements arrangements not covered by paragraphs 2 and 3, as long as those arrangements provide at least equivalent protection for the people concerned.
1. Without prejudice to the obligations of the institutions for occupational retirement provision stemming from Article 11 of Directive 2003/41/EC, to provide information to
members and beneficiaries, the Member States shall adopt the measures they deem to be necessary
to ensure that active pension scheme members can request information on
how a termination of employment will affect their supplementary pension rights, in accordance with paragraph 2
2. Sufficient information shall be provided in writing and
within a reasonable period of time to active pension scheme members
who request it. Such information
shall relate, in particular, to the
governing the establishment
of supplementary pension rights and the effects of applying them when an
benefits envisaged when an
is terminated; and
preservation of dormant pension rights
3. An inactive scheme member
who so requests shall receive from the person responsible for managing the supplementary pension scheme information on dormant pension rights and on all changes to the rules governing the supplementary pension scheme concerning them
Minimum requirements - non-regression
1. The Member States may adopt or maintain provisions on the establishment and preservation
of supplementary pension rights by outgoing workers
which are more favourable than those set out in this Directive.
2. The implementation of this Directive may not under any circumstances be used as a reason for cutting back the existing provisions
in the Member States for the establishment and preservation of supplementary pension rights by outgoing workers
States shall adopt the laws, regulations and administrative provisions necessary to comply with this Directive before
1 July 2008, or they shall ensure that, by that date,
the social partners introduce
provisions by way of agreement. The
Member States shall take the
necessary steps enabling them at all times
to guarantee the results imposed by
this Directive. They shall forthwith inform the Commission thereof.
2. Notwithstanding paragraph 1
, the Member States may be granted, where necessary, an extension of 60 months starting on 1 July 2008 in order to achieve the objective referred to in Articles 4 and 5.
Any Member State wishing to be granted that
extension shall inform the Commission accordingly, indicating the provisions and schemes concerned and the specific reasons for the extension.
3.When they are adopted by Member States, these measures shall
contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by the Member States.
4. The Member States shall inform the Commission of the measures taken in order to implement the provisions of Article 5.
1. Every five years after 1 July 2008, the Commission shall draw up a report for submission to the European Parliament,
the Council, the
European Economic and Social Committee and the Committee of the Regions on the basis of the information provided by the Member States. That report shall contain an assessment of employers" willingness to offer a supplementary pension scheme following the entry into force of this Directive
2.The report shall include a proposal on how, when vested pension rights are transferred, the undertaking's liability for such rights can be excluded.
3.No later than ...(9), the Commission shall draw up a report, in particular with regard to the conditions of transferring capital representing workers" supplementary pension rights. On the basis of that report, the Commission shall present any proposal containing amendments to this Directive or other instruments which prove necessary in order further to reduce the obstacles to the mobility of workers created by certain rules on supplementary pension provision.
Entry into force
This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.