eunbil · GT0N1308 · 2006-05-31 00:00:00 — THE EUROPEAN UNION , 18 2006 2005/0214 (COD) 9100/1/06 from : The Presidency to : (Part I) / Council (EPSCO) No. doc. : 7700/06 SOC 148 ECOFIN 118 CODEC 275 No. : 13686/05 SOC 412 ECOFIN 324 CODEC 933 - COM (2005) 507 final + REV 1 Subject : Proposal for a Directive of Parliament and of the portability of supplementary pension rights - Progress Report I. INTRODUCTION On 20 October 2005, the Commission adopted a proposal for a Directive on improving the portability of supplementary pension rights. By improving workers" possibilities to accrue, preserve and transfer their supplementary pension rights when changing employers, the draft Directive aims at facilitating both workers" freedom of movement between Member States and their occupational mobility within the same . During the UK Presidency, on , Commissioner pidla presented the proposal to the . The Working Party discussions were also started by the UK Presidency and these discussions have been continued during the Austrian presidency. The Social Questions Working Party has already met eight times to discuss the proposal. During the discussions, delegations have stressed that the supplementary pension systems in the different Member States vary and that these systems have evolved over lengthy periods of time. In a number of Member States, these systems are presently in transition or new legislation on supplementary pensions schemes is being considered. Some delegations have indicated that, in their Member States, no occupational supplementary pension systems exist. For the time being, most delegations have maintained their general scrutiny reservations on the proposal and a number of delegations have also entered parliamentary scrutiny reservations. MAJOR OUTSTANDING ISSUES UNDER DISCUSSION The Working Party"s discussions have concentrated on clarifying the technical aspects of the proposal, especially on the scope of the Directive and on the definitions used. The open issues can be summarised as follows: Supplementary pension schemes to be covered by the Directive A number of delegations wish an exclusion from the scope of the Directive for certain supplementary pension schemes, especially when the schemes" rules would need to be substantially changed as a result of the Directive. In addition, a number of delegations consider that other schemes should be excluded from certain of the Directive"s requirements or treated differently, for example in cases where the transfers of pension rights from these supplementary schemes could pose problems to the financial viability of the schemes (in case of under-funding). The role of the social partners in shaping the content and principles of supplementary pension schemes A large number of delegations have stressed the important role of the social partners, in their Member States, in designing and managing supplementary pension schemes. The social partners" role was already noted by the Commission in its proposal. In this connection, several delegations are concerned that the Directive, for example by setting upper limits to waiting and vesting periods (Article 4), might impinge on the social partners" leeway at the national level. Level of harmonisation needed in rules governing supplementary pension schemes While some delegations see a need for harmonisation regarding the joining and vesting criteria (in Article 4), some others stress the subsidiarity principle and consider that these issues could be dealt with at the national level. Transitional periods and application to pension rights accrued before the entry into force of the Directive A number of delegations have raised the issue of how the Directive should apply to supplementary pension rights accrued and/or vested before the entry into force of the Directive. Transfers of supplementary pension rights to other schemes A number of delegations consider that the transfer of vested pension rights from supplementary pension schemes to other financial institutions (i.e. to so-called third pillar schemes) should not be included in the Directive. Some others, however, consider that transfers to other financial institutions should be permitted by the Directive. Furthermore, some delegations are of the opinion that appropriate rules for preserving dormant pension rights would imply that there would be no need to provide for a right to transfer. A further important point in the discussions has been the question of whether and what kind of rights / obligations can be related to the transfer of supplementary pension rights from a pension scheme. Definitions to be used in the Directive This is an important question as supplementary systems vary widely between Member States, including the terminology used. Many of the definitions will need, therefore, to be further refined. The term "portability" A number of delegations have considered that the term itself, "portability", would be misleading and that the three separate concepts of the accrual, preservation and transferability of rights should be used instead. The Commission"s original proposal in principle did not include the self-employed . While a large number of delegations are able to accept this view, some delegations are open to accepting their inclusion. During the Austrian presidency, a clear picture of the outstanding issues has emerged. These issues have to be discussed further, including with Parliament, whose first reading opinion is expected during the latter part of 2006. 9100/1/06 REV 1 MH/mk DG G II EN