02 May 2013

Insurance Europe Position Paper on the proposal on the acquisition and preservation of pension rights

The Commission's original proposal points to the existing barriers to free movement of workers in Europe, and suggests that removing such obstacles would ease worker mobility. However, increasing the possibility for worker mobility should be achieved in a way that does not inadvertently undermine the development of pension systems in EU Member States. Care should be taken to safeguard the development of occupational and supplementary pension provisions in Member States, thus enhancing the social protection of citizens.

The draft Directive as proposed by the Commission in 2005 deals mainly with the acquisition of pension rights and the preservation of dormant rights. Insurance Europe strongly believes that conditions relating to the acquisition and the preservation of pension rights are matters of subsidiarity, as these are areas that are effectively dealt with at Member State level. The differing approaches to state pension provision and the wide variation in supplementary pension provision between Member States further justify the argument for action at Member State level only.

In addition to matching the needs of both employees and employers, social partners negotiate collective agreements in many Member States. Interference in these well-functioning processes could disrupt the organisation of national pension systems. Any EU action should complement actions at national level, and recognise the different approaches to state pensions in the various Member States.

Insurance Europe therefore believes that Member States are best placed to impose any legislation on minimum conditions for the acquisition of rights and for the preservation of the vested pension rights of departing workers, and that this should not be covered in the draft Directive. Insurance Europe is concerned that the current proposal for a Directive could bring further negative effects.

The provision of supplementary pension schemes by employers can be either voluntary or mandatory and is only possible if the employer is fully integrated in the process. The harmonisation of minimum conditions for occupational pension schemes (e.g. reducing acquisition requirements, different treatment of dormant rights) could lead to an increase in costs for employers, as a result of which they might choose not to provide pensions at all. This in turn could adversely affect the development of pension provision across the EU, and could lead to a substantial decline in the sector over time.

Full paper

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