ir * COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 27.05.1998 
COM(1998) 325 final 
97/0265 (CNS) 
Amended proposal for a 
COUNCIL DIRECTIVE 
ON SAFEGUARDING THE SUPPLEMENTARY PENSION RIGHTS 
OF EMPLOYED AND SELF-EMPLOYED PERSONS 
MOVING WITHIN THE EUROPEAN UNION 
(presented by the Commission pursuant to Article 189 a (2) 
of the EC-Treaty) 

EXPLANATORY MEMORANDUM 
On 8 October, the Commission presented a proposal for a Council Directive on 
safeguarding the supplementary pension rights of employed and self-employed 
persons moving within the European Union1. 
The purpose of this Directive is to provide protection, as regards supplementary pension 
schemes (retirement, invalidity or survivors), for the pension rights of workers and 
members of their families who move from one Member State of the European Union to 
another. Such protection covers, in particular, the preservation of supplementary pension 
rights under supplementary schemes, whether membership thereof is optional or 
compulsory, as well as cross-border payment of benefits and possible cross-border 
affiliation for posted workers. 
In the Green Paper on Supplementary Pensions in the Single Market, the Commission 
posed a number of questions to all interested parties (including governments, social 
partners, and supplementary pension scheme representatives) which are intended to 
deepen the analysis of the remaining problems which constitute obstacles to free 
movement. At present, the Commission services are analysing the reactions of all 
involved parties and in the light of the outcome of this debate, the Commission could 
take further action in this area. 
The Economic and Social Committee and the European Parliament have been 
consulted on the basis of Articles 51 and 235 of the Treaty, and the Economic and 
Social Committee has given a favourable opinion on the proposal. 
The European Parliament, in its plenary session of April 1998. adopted several 
amendments to the initial text of the Commission. 
The Commission could accept the majority of the amendments proposed by the 
European Parliament because these amendments clarify the existing provisions. 
Therefore the Commission proposes, on the basis of Article 189 a. § 2 of the Treaty, to 
modify its initial proposal in order to take account of certain amendments proposed by 
the European Parliament in its legislative resolution. 
COM(97) 486 final, JO C-005 du 09.01.98, p. 4 
A 
COMMENT ON PROPOSED MODIFICATIONS 
1. Amendment consisting in the addition of a new Recital 5a after the 5th 
Recital of the initial proposal. 
This amendment reflects the proposal of the Economic Affairs Committee of 
the EP. 
2. Amendment consisting in the addition of a new Recital 7a after the 7,h 
Recital 
This amendment reflects the position of the EP which would like to cover the 
situation of temporary and part-time employment. These forms of 
employment are covered by the proposal of the Commission implicitly. The 
EP is very sensitive to this aspect. 
3. Amendment consisting in the addition of a new Recital 12a after the 12"' 
Recital 
This amendment clarifies that this Directive is a first step on removing 
obstacles to free movement and that there is a need for further action in the 
future for the remaining obstacles relating to the supplementary pensions. 
4. Amendment relating to the 13th Recital 
This amendment clarifies the scope of Article 7 to which refers Recital 13. 
5. Amendment relating to Article 1 
This amendment clarifies the scope of the Directive by insisting that this 
Directive promotes the free movement of employed and self-employed persons 
within the European Union. 
I 
Amendment relating to Article 2 f3 
Amendment to replace the words "members of supplementary pension 
schemes" by "persons entitled to supplementary pension schemes" and the 
words "members of their families and their survivors" by "other entitled 
persons under such schemes". This amendment clarifies certain notions. 
7. Amendment relating to Article 3(a) 
Amendment clarifying that the notion "supplementary pension" means 
invalidity, retirement and survivors' benefits intended to supplement or replace 
those provided in respect of the same contingencies by schemes covered bv 
Regulation (EEC) n° 140S71. 
8. Amendment relating to Article 3(d) 
Amendment consisting of clarifying that the notion of "pension rights" covers 
the invalidity, retirement or survivors' benefits. 
9. Amendment relating to Article 4 
This amendment consists to clarify to scope of Article 4 which ensures the 
principle of equal treatment between persons moving within the same Member 
State and persons moving in another Member State, as far as the preservation 
of vested rights is concerned. It replaces also the words "members of their 
families or their survivors" by the words "other entitled persons under these 
schemes". 
1.0. Amendment relating to Article 5 
Amendment consisting to replace the words "members of their families and 
their survivors" by the words '"other entitled persons under these schemes". 
As for amendment relating to Article 2. this amendment intends 'to clarifv the 
personal scope of the Directive 
11. Amendment relating to Article 12(3) 
Amendment consisting to reduce the 6 years period to present a report on the 
implementation of the Directive to a four years period. 
3-4 
PROPOSAL FOR A COUNCIL 
DIRECTIVE COM(97) 486 final of 8 
October 1997 on safeguarding the 
supplementary pension rights of 
employed and self-employed persons 
moving within the European Union AMENDED PROPOSAL FOR A 
COUNCIL DIRECTIVE on 
safeguarding the supplementary 
pension rights of employed and self-
employed persons moving within the 
European Union 
PREVIOUS VERSION 
presented by the Commission on 8 
October 1997 NEW VERSION 
Taking account of certain amendments 
of the European Parliament 
THE COUNCIL OF THE 
EUROPEAN UNION, 
Having regard to the Treaty establishing 
the European Community, and in 
particular Articles 51 and 235 thereof, 
Having regard to the proposal from the 
Commission (1), 
Having regard to the opinion of the 
European Parliament (2), 
Having regard to the opinion of the 
Economic and Social Committee (3), Unchanged 
Whereas one of the fundamental freedoms 
of the Community is the free movement of 
persons; whereas the Treaty establishing 
the European Community provides that the 
Council shall, acting unanimously, adopt 
such measures in the field of social 
security as are necessary to provide 
freedom of movement of workers; Unchanged 
Whereas the social security of workers is 
assured by statutory social security 
schemes and by supplementary social 
security schemes; Unchanged 
Whereas the legislation already adopted by 
the Council with a view to protecting the 
social security rights of workers moving 
within the Community and of members of 
their family, and more particularly Unchanged 
5" 
Regulations (EEC) Nos 1408/711 and 
574/722 concern only statutory pension 
schemes; 
Whereas the European Council meeting in Unchanged 
Amsterdam on 16-17 June 1997 
reaffirmed the importance it attaches to a 
properly functioning Single Market as an 
essential element of the overall strategy to 
promote competitiveness, economic 
growth and employment throughout the 
Union; 
Whereas to this end, in its Resolution on Unchanged 
Growth and Employment, the European 
Council meeting in Amsterdam on 16-17 
June 1997 has agreed concrete action on 
making maximum progress with the final 
completion of the Single Market: making 
the rules more effective, dealing with the 
main remaining market distortions, 
avoiding harmful tax competition, 
removing the sectorial obstacles to market 
integration and delivering a Single Market 
for the benefit of all citizens3; 
Recital 5a (new) 
Whereas the free movement of workers is 
not only an essential element for the 
proper functioning of the single market 
but also a condition for the proper 
functioning of Economic and Monetary 
Union. 
Whereas in its Recommendation 
92/442/EEC of 27 July 1992 on the 
convergence of social protection objectives 
and policies4 the Council recommends, in 
point LB.5 (h), that Member States should 
"promote, where necessary, changes to the Unchanged 
OJ No L149, 5.7.1971, p.2 ; Regulation as updated by Council Regulation (EC) No 118/97 of 
2 December 1996 amending and updating Regulation (EEC) No 1408/71 on the application of 
social security schemes to employed persons and to members of their families moving within 
the Community and Regulation (EEC) No 574/72 laying down the procedure for 
implementing Regulation (EEC) No 1408/71 (OJNo L28, 30.1.1997) 
OJ no L74, 27.3.1972, p. 1 ; Regulation as updated by Council Regulation (EC) No 118/97 
OJ No C236, 2.8.1997 
OJ No L245, 26.8.1992, p.49 
conditions governing the acquisition of 
pension and, especially, supplementary 
pension rights with a view to eliminating 
obstacles to the mobility of employed 
workers"; 
Whereas this objective can be achieved Unchanged 
only if supplementary pension rights are 
afforded appropriate protection when a 
worker moves from one Member State to 
another; 
Recital 7a (new) 
Whereas adequate pension rights must be 
better guaranteed in respect of temporary 
and part-time employment, which is 
becoming increasingly common; whereas, 
therefore, the Commission should also 
take account of such employment when 
formulating pension proposals. 
Whereas freedom of movement for Unchanged 
persons, which is one of the cornerstones 
of the Community, is not confined to 
employed persons but also extends to self-
employed persons in the framework of the 
freedom of establishment and the freedom 
to provide services; 
Whereas, in order to enable the right to Unchanged 
free movement to be exercised effectively, 
workers should have certain guarantees 
regarding the preservation of their vested 
rights deriving from supplementary 
pension schemes; 
Whereas the Member States should take Unchanged 
the necessary measures to ensure that 
benefits under supplementary pension 
schemes are paid to members and former 
members thereof as well as to members of 
their families or their survivors in all 
Member States of the European Union, 
given that all restrictions on the free 
movement of payments and capital are 
now prohibited under Article 73b of the 
Treaty establishing the European 
Community; 
A-
Whereas in order to facilitate the exercise Unchanged 
of the right to free movement, national 
regulations should be adjusted in order to 
enable contributions to continue to be 
made to an approved supplementary 
pension scheme established in one 
Member State by or on behalf of workers 
who are posted, for a short duration, to 
another Member State; 
Whereas in this regard the Treaty requires Unchanged 
not only the abolition of any 
discrimination based on nationality but 
also the elimination of any national 
measure likely to impede or render less 
attractive the exercise by workers of the 
fundamental freedoms guaranteed by the 
Treaty as interpreted by the Court of 
Justice in successive judgements; 
Whereas this Directive in the limited field 
of application of posted workers is 
without prejudice to the need to find a 
suitable solution to the wider problem of 
the taxation of supplementary pensions 
within the Community. Recital 12a (new) 
Whereas this directive is merely a first 
step towards the regulation of the 
supplementary pension system with the 
aim of removing obstacles to the mobility 
of workers; whereas, where necessary, the 
Council will in future adopt further legal 
acts 
Whereas this Directive in the limited field 
of application of posted workers is 
without prejudice to the need to find a 
suitable solution at Community level to 
the wider problem of the taxation of 
supplementary pensions within the 
Community, in particular concerning the 
tax deductibility of supplementary 
pension contributions and the taxation of 
the final benefits. 
Whereas workers exercising their right to Unchanged 
free movement should be adequately 
informed by the managers of 
supplementary pension schemes, 
particularly with regard to the choices and 
alternatives available to them; 
% 
Whereas this Directive is without Unchanged 
prejudice to the applicability to 
supplementary pension schemes of the 
single market rules and the competition 
rules of the Treaty establishing the 
European Community; 
Whereas, by reason of the diversity of Unchanged 
supplementary social security schemes, the 
Community should lay down only a 
general framework of objectives, leaving 
the Member States to choose freely what 
measures to adopt to implement those 
objectives; 
Whereas the Member States, in order to Unchanged 
attain these objectives, must adjust their 
national laws and, this being the case, a 
directive is the appropriate legal 
instrument; 
Whereas, in accordance with the principles Unchanged 
of subsidiarity and proportionality as set 
out in Article 3b of the Treaty, the 
objectives of this Directive cannot be 
sufficiently achieved by the Member 
States and can therefore be better achieved 
by the Community; whereas this Directive 
limits itself to the minimum required for 
the attainment of those objectives and does 
not go beyond what is necessary for that 
purpose; 
Whereas one of the fundamental freedoms Unchanged 
of the Community is the free movement of 
persons; whereas the Treaty establishing 
the European Community provides that the 
Council shall, acting unanimously, adopt 
such measures in the field of social 
security as are necessary to provide 
freedom of movement of workers; 
HAS ADOPTED THIS DIRECTIVE 
Article 1 
The aim of this Directive is to ensure that 
appropriate protection is given to rights, The aim of this Directive is to promote the 
free movement of employed and 
acquired or in the course of acquisition, of self-employed persons within the. 
R 
members of supplementary pension 
schemes who move from one Member 
State to another within the European 
Union. Such protection refers in particular 
to the preservation of pension rights under 
both voluntary and compulsory 
supplementary pension schemes, with the 
exception of schemes already covered by 
Council Regulation (EEC)N° 1408/71. European Union by ensuring that the 
pension rights of persons entitled to 
supplementary pensions and who move 
from one Member State to another are 
suitably protected. Such protection refers 
to pension rights under both voluntary 
and compulsory supplementary pension 
schemes with the exception of schemes 
covered by Regulation No 1408/71. 
Article 2 
This Directive shall apply to members of 
supplementary pension schemes who have 
acquired or are in the process of acquiring 
rights in one or more Member States, and 
to members of their families and their 
survivors. This Directive shall apply to persons 
entitled to supplementary pension 
schemes and other entitled persons under 
such schemes who have acquired or are in 
the process of acquiring rights in one or 
more Member States 
SECTION 2 
Definitions 
Article 
For the purpose of this Directive: 
a) "supplementary pension" means 
invalidity, retirement and survivors' 
benefits intended to supplement or replace 
those provided in respect of the same 
contingencies by statutory social security 
schemes; a) 'supplementary pension' means 
invalidity, retirement and survivors' 
benefits intended to supplement or 
replace those provided in respect of the 
same contingencies by schemes covered 
by Regulation (EEC) No 1408/71. 
b) "supplementary pension scheme" Unchanged 
means any occupational pension scheme 
and collective arrangement serving the 
same aim, such as a group insurance 
contract, branch or sectoral pay-as-you-go 
scheme, funded scheme or pension 
promise backed by book reserves, intended 
to provide a supplementary pension for 
employed or self-employed persons; 
c) "approved supplementary pension 
scheme" means a supplementary pension 
scheme which, in the Member State in 
which it is established, satisfies the 
conditions required by that Member State Unchanged 
AO 
for the granting of particular tax reliefs 
that are available in relation to 
supplementary pension provision; 
d) "pension rights" means any 'pension rights' means any invalidity, 
benefits to which a scheme member is retirement or survivors' benefits to which 
entitled under a supplementary pension a scheme member is entitled under a 
scheme; supplementary pension scheme. 
e) "vested pension rights" means any Unchanged 
rights to benefits obtained after the 
fulfilment of the minimum conditions, in 
particular of vesting periods, required by 
the rules of a supplementary pension 
scheme. "Vesting period" means any 
period taken into consideration for 
admission to a supplementary pension 
scheme and for the acquisition of rights 
thereunder; 
f) "Worker" means an employed or a Unchanged 
self-employed person; 
g) "Posted worker" means a worker 
who is posted to work in another Member 
State and who under the terms of Title II 
of Regulation (EC) 1408/71 continues to 
be subject to the legislation of the 
Member State of origin, and "Posting" 
shall be construed accordingly; Unchanged 
h) "Member State of origin" means 
the Member State in which a worker has 
worked immediately prior to the posting 
and in which the supplementary pension 
scheme of which he is a member is 
established; Unchanged 
i) "host Member State" means the 
Member State to which a worker is posted. Unchanged 
SECTION 3 
Measures for protecting the 
supplementary pension rights of 
workers moving within the European 
Union 
A\ 
Article 4 
Member States shall take the necessary 
measures to ensure that the vested pension 
rights of supplementary pension scheme 
members are preserved when they move 
from one Member State to another within 
the European Union. To this end Member 
States shall ensure that full preservation of 
vested pension rights shall be guaranteed 
for members in respect of whom 
contributions are no longer being made to 
a supplementary pension scheme as a 
consequence of their moving from one 
Member State to another, at least to the 
same extent as for members in respect of 
whom contributions are no longer being 
made but who remain within the Member 
State in question. This provision shall also 
apply to members of their families and 
their survivors. Member States shall take the necessary 
measures to ensure that the vested 
pension rights of supplementary pension 
scheme members are preserved when they 
move from one Member State to another. 
To this end, Member States shall ensure 
that full preservation of vested pension 
rights shall be guaranteed for members, 
even if_ contributions are no longer being 
made to a supplementary pension scheme 
as a consequence of their moving from 
one Member State to another, to the same 
extent as for members in respect of whom 
contributions are no longer being made 
but who remain within the Member State 
in question. This Article shall also apply 
to other entitled persons under these 
schemes. 
Article 5 
Member States shall ensure that, in respect 
of members of supplementary pension 
schemes, as well as members of their 
families and their survivors, 
supplementary pension schemes make full 
payment in other Member States of all 
benefits due under such schemes. Member States shall ensure that, in 
respect of members of supplementary 
pension schemes, as well as members of 
other entitled persons under these 
schemes, supplementary pension schemes 
make full payment in other Member 
States of all benefits due under such 
schemes. 
Article 6 
1. Member States shall adopt such 
measures as are necessary to enable 
contributions to continue to be made to a 
supplementary pension scheme 
established in the Member State of origin 
by or on behalf of a posted worker who is 
a member of such scheme during the 
period of his or her posting to the host 
Member State. Unchanged 
2. Where, pursuant to this Article, 
contributions continue to be made to a 
supplementary pension scheme in the 
At 
Member State of origin, the host Member 
State shall recognise these as equivalent 
to contributions to a supplementary 
pension scheme in the host Member 
State. 
Article 7 
Where contributions continue to be made 
in accordance with Article 6 (1) to an 
approved supplementary pension scheme, 
a host Member State shall, to the extent 
that it has taxing rights, treat such 
contributions in the same way as it would 
treat contributions paid to a comparable 
approved supplementary pension scheme 
established in the host Member State. Unchanged 
Article 8 
Member States shall take measures to 
ensure that managers of supplementary 
pension schemes provide adequate 
information to scheme members as to their 
pension rights and the choices which are 
available to them under the scheme when 
they move to another Member State. Unchanged 
SECTION 4 
Final Provisions 
Article 9 
Member States may provide that the 
provisions of Article 6 shall apply only to 
postings that commence on or after the 
date of entry into force of this Directive. Unchanged 
Article 10 
Member States shall introduce into their 
national legal systems such measures as 
are necessary to enable all persons who 
consider themselves wronged by failure to 
apply the provisions of this Directive to 
pursue their claims by judicial process 
after possible recourse to other competent Unchanged 
M 
authorities. 
Article 11 
Member States shall lay down the system 
of penalties for breaching the national 
provisions adopted pursuant to this 
Directive, and shall take all the measures 
necessary to ensure that those penalties are 
applied. The penalties thus provided for 
shall be effective, proportionate and 
dissuasive. Member States shall 
communicate the relevant provisions to the 
Commission not later than 18 months 
following the entry into force of this 
Directive and shall communicate any 
subsequent changes as soon as possible. Unchanged 
Article 12 
1. Member States shall bring into force the Unchanged 
laws, regulations and administrative 
provisions necessary to comply with this 
Directive not later than 18 months 
following the date of its entry into force, or 
shall ensure by that date at the latest that 
management and labour introduce the 
required provisions by way of agreement; 
the Member States being obliged to take 
all necessary steps enabling them at all 
times to guarantee the results imposed by 
this Directive: They shall immediately 
inform the Commission thereof. 
When Member States adopt these 
provisions, these shall contain a reference 
to this Directive or shall be accompanied 
by such reference at the time of their 
official publication. The procedure for 
such reference shall be adopted by 
Member States. 
They shall inform the Commission of the 
national authorities to be contacted 
regarding the application of this Directive. 
2. Not later than two years following, the 
entry into force of this Directive, Member Unchanged 
AU 
States shall communicate to the 
Commission the text of the provisions of 
national law which they adopt in the field 
covered by this Directive. 
Member States shall supply, by the same 
date, a correlation table showing the pre­
existing national provisions or those which 
have been introduced in order to comply 
with each provision of this Directive. 
3. On the basis of the information supplied 
by Member States, the Commission shall 
draw up a report for submission to the 
European Parliament, the Council and the 
Economic and Social Committee, within 
six years of the entry into force of this 
Directive. On the basis of the information supplied 
by Member States, the Commission shall 
draw up a report for submission to the 
European Parliament, the Council and the 
Economic and Social Committee, within 
four years of the entry into force of this 
Directive. 
The report shall deal with the application 
of this Directive and shall, where 
appropriate, propose any amendments that 
may prove necessary. Unchanged 
Article 13 
This Directive shall enter into force on the 
twentieth day following that of its 
publication in the Official Journal of the 
European Communities. Unchanged 
Article 14 
This Directive is addressed to the Member 
States. 
Done at Brussels, 
For the Council 
The President 
4 b 



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