Report from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions on the Implementation of 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 {SEC(2006) 82}
Date: 2006-01-26
Institutions: European Commission
Subjects: EU Member State, free movement of workers, pension scheme, report, self-employment, social security, transfer of pension rights, wage earner

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 26.01.2006 
COM(2006) 22 final 

REPORT FROM THE COMMISSION 
TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE EUROPEAN 
ECONOMIC AND SOCIAL COMMITTEE AND 
THE COMMITTEE OF THE REGIONS 

on the Implementation of 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  

{SEC(2006) 82} 

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Table of Content 

I. 

II. 

III. 

1. 

2. 

3. 

a) 

b) 

4. 

INTRODUCTION........................................................................................................ 3 

SCOPE ......................................................................................................................... 4 

MEASURES FOR SAFEGUARDING PENSION RIGHTS OF WORKERS 
MOVING WITHIN THE COMMUNITY................................................................... 4 

Equality of treatment as regards preservation of rights ............................................... 4 

Guarantee of cross-border payments............................................................................ 5 

Cross-border membership of posted workers .............................................................. 6 

Adopted Measures to permit the payment of contributions by and on behalf 
of posted workers, Article 6 (1) ................................................................................... 7 

Exemption from contributions, Article 6 (2)................................................................ 7 

Information provided to scheme members................................................................... 8 

IV. 

CONCLUSION AND DEVELOPMENT.................................................................... 9 

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I. 

INTRODUCTION 

The  supplementary  pension  schemes  have  developed  very  heterogeneously  across  the 
Member States. Now the European Union has 25 Member States, the pension landscape in the 
European  Union  has  become  even  more  diverse.  This  applies  not  only  to  statutory  pension 
schemes  but  also  to  supplementary  pension  schemes,  making  it  difficult  to  classify  the 
schemes according to the traditional three pillar taxonomy1. 

The  implementation  of  the  fundamental  principle  of  freedom  of  movement  of  workers, 
enshrined  in  the  EC  Treaty,  implies  the  protection  of  pension  rights,  either  statutory  or 
supplementary, of workers moving within the European Union. While co-ordination of social 
security  pension  schemes  allows  migrant  workers  to  fully  preserve  their  accrued  statutory 
pension rights, measures to improve the safeguarding of supplementary pension rights are still 
in  their  early  stage.  It  is  widely  recognised  that  the  system  of  co-ordination  provided  for  in 
Regulation 1408/71/EEC, and in particular the rules of aggregation for the statutory pension 
schemes,  are  in  principle  not  appropriate  to  supplementary  pension  schemes.  The  extreme 
diversity  of  such  schemes  within  and  between  the  Member  States  and  the  fact  that 
supplementary pension schemes often do not emanate from legislation but from the initiative 
of  the  private  sector,  make  it  difficult  to  apply  similar  rules.  Thus  Regulation  1408/71/EEC 
does  not  extend  to  most  supplementary  pension  schemes.  A  Directive  in  the  field  of 
supplementary pension provision was rather seen as the appropriate legal instrument in order 
to protect supplementary pension rights of persons moving within the European Union.  

On 29 June 1998 the Council adopted Directive 98/49/EC ("the Directive") on safeguarding 
the supplementary pension rights of employed and self-employed persons moving within the 
Community2. It had to be implemented in the EU-15 Member States by 25 July 2001 and in 
the  new  Member  States  by  1  May  2004.  The  measures  to  be  adopted  according  to  this 
Directive  take  into  account  the  special  nature  and  characteristics  of  supplementary  pension 
schemes. By setting out certain rights for members of such schemes it limits the obstacles to 
free movement caused by the loss of all or some supplementary pension rights as a result of 
moving to another Member State to work. These rights are detailed in part III. 

Pursuant  to  Article  10  (3)  of  the  Directive,  this  report  shall  deal  with  the  application  of  the 
Directive and shall, where appropriate, propose any amendments that may prove necessary. In 
order to obtain an overview as complete as possible, a questionnaire was sent to the Member 
States'  and  EFTA3  governments.  The  Commission  has  also  consulted  the  members  of  the 
Pensions Forum4. This report is mainly based on the information supplied by the respondents. 
It should be noted that the information sent to the Commission varied considerably in terms of 

1 

2 
3 
4 

Described inter alia by the Commission Communication of 11 May 1999 "Towards a single market for 
supplementary pensions – Results of the consultation on the Green Paper on supplementary pensions in 
the single market" (COM(99) 134 final). 
OJ L 209, 25.7.1998, p.46. 
Only Norway replied.  
The Pensions Forum is a Committee in the area of supplementary pensions involving Member States, 
social  partners  and  relevant  European  federations.  It  was  officially  established  by  Commission's 
Decision  C  (2001)  1775  of  9  July  2001.  Replies  were  received  from  the  following  stakeholder 
organisations:  AIM,  EAPSPI  and  EFRP.  Some  national  organisations  replied  individually  to  the 
questionnaire. 

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content  and  detail.  The  content  of  the  report  reflects  the  situation  in  the  Member  States  in 
September 2005.  

II. 

SCOPE 

Within  the  meaning  of  the  Directive,  a  supplementary  pension  scheme  refers  to  any 
occupational pension scheme established in conformity with national legislation and practice 
or collective or other comparable agreement intended to provide a supplementary pension for 
employed or self-employed persons, irrespective of whether such schemes are compulsory or 
voluntary.  The  Directive  excludes  from  its  scope  those  schemes  which  are  covered  by  the 
term  "legislation"  as  defined  by  the  first  subparagraph  of  Article  1  (j)  of  the  Regulation 
1408/71/EEC, or in respect of which a Member State makes a declaration under that article. 

The  Table  1  "Material  scope"  in  the  Annex  1  in  the  Commission  Staff  Working  Document 
annexed to the Report on the Implementation of 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, provides a brief overview of supplementary pension provision 
in  the  Member  States  falling  under  the  scope  of  the  present  Directive.  If  there  are 
supplementary  pension  schemes  exceptionally  covered  by  Regulation  1408/71/EEC,  this  is 
indicated  in  the  table.  All  further  information  given  in  this  report  about  the  implementing 
measures of the Member States refers to the supplementary pension systems indicated in this 
table.  It  should  be  noted  that  this  table  can  not  be  exhaustive  taken  into  account  the 
complexity and great diversity of supplementary pension schemes.  

The  Directive  applies  regardless  of  whether  the  supplementary  pension  scheme  is  based  on 
funding,  pay-as-you-go  schemes  or  book  reserves.  Most  of  the  supplementary  pension 
schemes operate on a funded basis – in simplified terms, this means that "funds" which exist 
separately  from  the  employer  receive  contributions,  invest  them  and  pay  the  benefits.  But 
other  systems  financed  through  pay-as-go  or  combined  with  a  funded  approach  as  well  as 
book reserves do exist. According to the replies to the questionnaire, supplementary pensions 
schemes based on the latter form of financing, i.e., setting aside book reserves in order to back 
pension  promises,  can  be  found  in  almost  half  of  the  Member  States,  these  being:  Austria, 
Belgium,  Denmark,  Germany,  Italy,  Luxembourg,  Portugal,  Spain,  Sweden  and  the  United 
Kingdom and Norway. 

Moreover, the Directive not only applies to retirement pensions but also, where provided for, 
to  invalidity  and  survivors'  benefits.  In  all  Member  States  with  survivorship  as  a  coverable 
biometric risk, spouses and children are possible survivors. This is achieved either by explicit 
reference  or  by  using  wide  terms,  e.g.  legal  heirs  or  beneficiary,  under  which  spouses  and 
children can also be defined.  

III.  MEASURES  FOR  SAFEGUARDING  PENSION  RIGHTS  OF  WORKERS 

MOVING WITHIN THE COMMUNITY 

1. 

Equality of treatment as regards preservation of rights 

Article 4 of the Directive stipulates that where a worker who has acquired vested rights under 
a supplementary pension scheme in one Member State moves to another Member State, those 

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rights are to be preserved at least to the same extent as for workers leaving the occupation but 
remaining within the Member State in question. 

The aim of this Article is to ensure that persons moving to another Member State should be in 
no worse situation than those leaving an employment but remaining within the same Member 
State. By laying down this principle Article 4 ensures as minimum standard equal treatment of 
domestic  and  cross-border  cases  as  far  as  the  preservation  of  already  acquired  rights  is 
concerned. 

According to certain Member States, there was no need to adopt specific measures to comply 
with this Article. As reason for this it was most frequently indicated from the governments of 
Member  States  that  the  existing  legal  frameworks  or  collective  agreements  governing  the 
preservation of vested rights do not make any distinctions between workers remaining in one 
Member State and those moving to another Member State. 

A  number  of  Member  States  has  however  introduced  a  specific  regulation  with  the  aim  of 
ensuring that the same principles of preservation of vested pension rights apply equally where 
a scheme member goes to live in another Member State. This sort of specific provision can be 
found  in  the  legislation  of  France,  Germany,  Greece5,  Ireland,  Latvia,  Luxembourg,  the 
Netherlands, Poland, Portugal the United Kingdom and Norway. Among these Member States 
two ways of legal techniques have been used: while France, Ireland and the United Kingdom 
decided  to  implement  a  prohibition  on  differing  rules,  the  other  above-mentioned  Member 
States preferred a positive rule to ensure equal treatment6. According to Estonian authorities, 
Estonia has applied Directive 98/49/EC in respect of the mandatory funded pension scheme, 
the Directive being implemented by Funded Pensions Act7. 

The impact of the Directive on this point in terms of leading to an actual change in practice 
seems  to  have  been  limited,  since  Member  States  indicated  that  non-discrimination  in  this 
context was already provided for prior to the Directive. For the corresponding references in 
the national provisions see Annex 1 - Table 2 "Equal preservation", in the Commission Staff 
Working  Document  annexed  to  the  the  Report  on  the  Implementation  of  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. 

2. 

Guarantee of cross-border payments 

According  to  Article  5  of  the  Directive,  Member  States  shall  ensure  that  benefits  under 
supplementary  pension  schemes  are  paid  to  members  and  former  members,  as  well  as  to 
others  holding  entitlement  under  such  schemes,  in  all  Member  States,  net  of  any  taxes  and 
transaction charges which may be applicable. The payment of benefits throughout Europe is 

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7 

The  Greek  legislation  was  finally  adopted  on  3rd  November  2004  (Presidential  decree  227/2004 
published in OJ 212 of 5 November 2004. 
An example is the Portuguese implementing legislation has the following wording: "Workers who are 
members of a supplementary pension scheme and in respect of whom contributions cease to be paid to 
this scheme because they move from one Member State to another shall preserve vested pension rights 
acquired in these schemes, under the same conditions applicable to members who have ceased to make 
contributions but who remain in the national territory. 2.1 The provisions of (1) shall also apply to other 
persons holding entitlement under the supplementary scheme in question." 
Reply  of  Estonian  authorities  of  1.8.2005.  The  Commission  services  are  in  process  of  evaluating  the 
Esthonian Funded Pension scheme. 

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an essential pre-requisite for the completion of both principles of free movement of workers 
and of free movement of capital.  

Several  Member  States  (Finland,  France,  Greece,  Ireland,  Luxembourg,  Malta,  the 
Netherlands,  Portugal,  Slovenia  and  the  United  Kingdom)  and  Norway.  implemented  a 
specified provision in their legislation stipulating that payments of benefits shall be paid out 
to entitled persons which have moved to another Member State.8  

This  provision  was  -  unlike  the  others  above-mentioned  -  already  adopted  prior  to  the 
Directive.  Cyprus  and  Spain  did  not  adopt  a  specific  provision  only  for  the  purpose  of  the 
implementation  of  the  present  Directive,  but  a  more  general  legislation  stipulating  that 
movement  of  capital  and  payments  between  residents  of  origin  and  residents  of  Member 
States shall be performed without any restriction. 

Where  no  legal  measure  was  taken,  the  respective  Member  States  stated  that  their  legal 
provisions  or  collective  agreements  already  complied  with  the  Article  5  requirement.  This 
follows  -  according  to  most  of  these  Member  States  -  from  the  fact  that  their  existing 
legislation did not make any distinctions, in terms of payment, between members remaining in 
the country and those moving to another Member State. Other Member States stated there was 
no  need  to  adopt  explicit  measures  because  their  legislation  did  not  contain  provisions 
impeding the free movement of capital with respect to cross-border payments made pursuant 
to supplementary pension schemes. 

Like Article 4, this Article does not seem to have led to a significant change in the practice of 
the  Member  States.  Even  the  Member  States  which  adopted  an  explicit  provision  did  not 
report  that  before  its  adoption  there  had  been  a  different  practice  in  place.  This  seems  to 
indicate  that  the  guarantee  of  payment  of  benefits  without  restrictions  to  (former)  scheme 
members residing in another Member State was easy to meet for almost all types of schemes.  

For  the  corresponding  references  in  the  national  provisions  see  Annex  1  -  Table  3  "Cross-
border payments" in the Commission Staff Working Document annexed to the Report on the 
Implementation  of  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. 

3. 

Cross-border membership of posted workers  

Article 6 concerns the posted workers within the meaning of Regulation 1408/71/EEC. Such a 
posting is a situation where a worker is temporarily sent by his employer to a Member State 
other than the one in which he is normally employed. The maximum period for posting is 12 
months;  in  exceptional  cases  it  can  be  extended  up  to  24  months.  Throughout  the  whole 
period  of  posting  there  exists  a  direct  relationship  between  the  posting  undertaken  and  the 
posted worker.  

8 

The following wording of the Finnish Insurance Funds Act is an example of such a specific provision: 
"Supplementary benefits for members of a fund, or other insured persons who are or have been covered 
by  the  system  of  supplementary  benefits,  shall  also  be  paid  out  to  other  member  countries  of  the 
European Economic Area under the same conditions as in Finland. Unless otherwise stipulated in the 
fund's  statutes,  supplementary  benefits  may  also  be  paid  out  to  countries  outside  the  European 
Economic Area." 

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A  worker  who  is  poised  to  work  abroad  temporarily  for  his  employer  has  the  legitimate 
expectation that he will not suffer any economic disadvantages as regards his supplementary 
pension rights. Changing to a new scheme while he is abroad - provided there is one - could 
cause  him  considerable  financial  loss.  For  instance,  it  could  occur  that  the  worker  does  not 
accrue any rights during his posting because of his failure to meet the vesting period that may 
apply in this country. Equally, it may result in difficulties if the new scheme is not compatible 
with  the  former  scheme.  For  example,  it  is  complicated  to  calculate  the  corresponding 
provision needs in the case of changing from a defined benefit to a defined contribution plan. 
These problems can be avoided through cross-border membership which means remaining in 
the  scheme  of  origin  during  the  period  of  posting.  Article  6  therefore  allows  cross-border 
membership by stipulating that employers and posted workers must be allowed to continue to 
make  contributions  to  the  supplementary  scheme  established  in  the  Member  State  of  origin 
during the period of the posting to another Member State. Where contributions continue to be 
made,  the  Member  States  are  required  to  ensure  that  posted  workers  and  employers  are 
exempted from any obligation to make contributions in another Member State.  

a) 

Adopted Measures to permit the payment of contributions by and on behalf of posted 
workers, Article 6 (1) 

Certain Member States reported that there was no need to adopt specific measures allowing 
continuation of payment of contributions during the posting. As a rule, the reason given by the 
Member States is that, in the case of a posting, the contracts and collective agreements related 
to  supplementary  pension  provision  in  the  Member  State  of  origin  remain  applicable  to  the 
parties. Therefore - according to these Member States - the contributions by and on behalf of 
posted workers are paid as normal in accordance with the provisions governing the payment 
of contributions. Moreover, it is claimed that the compliance with Article 6 (1) arises from the 
non-existence  of  regulations  prohibiting  payment of  contributions  to  supplementary  pension 
schemes during a posting.  

However, some Member States adopted explicit provisions in order to ensure the continuation 
of  payment  during  a  posting.  Such  provisions  were  implemented  in  France,  Greece, 
Luxembourg, Malta, the Netherlands, Portugal, Sweden, the United Kingdom and Norway. 

While  in  Greece  the  right  to  continue  to  make  contributions  must  be  asserted  within  thirty 
days  of  receiving  notification  of  posting  by  the  worker,  in  the  other  above-mentioned 
countries  there  are  no  specific  limitations  to  the  exercise  of  this  right.  Luxembourg  and 
Swedish provisions stipulate that payment may not only be continued, but shall be continued 
during the period of the posting. 

b) 

Exemption from contributions, Article 6 (2) 

This requirement is relevant for Member States which have supplementary pension schemes 
which  are  compulsory.  In  the  same  way  as  a  compulsory  supplementary  pension  scheme  in 
general  or  a  compulsory  membership  for  a  certain  sector,  such  schemes  could  constitute  an 
obstacle  to  the  principle  of  exemption  from  payment  of  contributions  to  supplementary 
pension schemes in another Member State. Thus in these cases the host Member State must 
ensure that posted workers and their employers are not covered by the compulsory scheme. 

Certain Member States have stated that they did not need an explicit provision to implement 
Article  6  (2).  In  explanation  for  this,  it  was  generally  claimed  by  these  Member  States  that 

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there  are  no  obligatory  supplementary  pension  schemes  in  general  or  that  there  is  no 
legislation which makes membership of a scheme compulsory.  

Other  Member  States  have  however  enacted  specified  provisions.  The  Dutch  law,  for 
example,  stipulates  that  where,  during  a  posting  in  the  Netherlands,  the  payment  of 
contributions is continued in another Member State, the employee posted in the Netherlands 
and  his  employer  are  exempt  from  the  obligation  to  pay  contributions  in  the  Netherlands. 
Belgium,  Denmark,  France,  Sweden  (the 
latter  only  partially)  and  Norway.  have 
corresponding provisions. 

Greece,  Luxembourg,  Malta  and  Portugal  have  also  implemented  specific  provisions 
concerning  this  matter,  but  from  another  point  of  view.  For  example,  Greek  law  lays  down 
that the posted worker and, where provided, his employer, are exempt from any obligation to 
make  contributions 
in  another  Member  State. 
Luxembourg, Malta and Portugal have adopted nearly the same provision. The Commission 
services  consider  that  this  kind  of  provision  might  not  contribute  to  the  implementation  of 
Article  6  (2),  as  it  is  questionable  whether  this  provision  can  be  legally  enforced  in  the 
Member States in which the worker is posted. 

to  supplementary  pension  schemes 

in  a  simple  procedure  without 

If a worker is going to work abroad for a short time for his employer, he needs to know what 
will  happen  to  his  supplementary  pension  rights  during  this  time.  He  and  his  employer  are 
interested 
incurring  additional  costs  and  complex 
administrative  arrangements.  Through  cross-border  membership  they  have  an  instrument  to 
render  this  possible.  In  particular  employees  of  multinational  companies  who  may  in  the 
course  of  their  careers  undertake  a  number  of  such  postings  benefit  from  this  instrument. 
Where there was no legal right for cross-border membership it was up to the wording of the 
respective contracts if continuation of contributions was permitted or not. By codification of 
this right, the worker and employer gained the legal certainty in this respect which is essential 
for planning postings. 

For  the  corresponding  references  in  the  national  provisions  see  Annex  1  -  Table  4  "Cross-
border membership of posted workers" in the Commission Staff Working Document annexed 
to  the  Report  on  the  Implementation  of  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. 

4. 

Information provided to scheme members 

According  to  Article  7  of  the  Directive,  Member  States  shall  take  measures  to  ensure  that 
employers,  trustees  or  others  responsible  for  the  management  of  supplementary  pension 
schemes provide mobile workers with adequate information on their pension rights and on the 
options open to them when moving to another Member State. Such information shall at least 
correspond to information given to scheme members in respect of whom contributions cease 
to be made but who remain within the same Member State. 

Supplementary pensions, especially in the case of Member States with supplementary pension 
schemes  which  provide  a  high  benefit  level,  constitute  an  important  part  of  the  income 
protection in old age. It is therefore natural that persons intending to work in another Member 
State  want  to  have  a  clear  idea  what  the  consequences  for  their  acquired  pension  rights  are 
before taking a final decision. Therefore adequate information in this field is indispensable. 

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Certain Member States referred to the latter minimum requirement and stated that no specific 
measures  with  regard  to  information  to  be  given  to  scheme  members  were  adopted.  In  this 
context  it  is  argued  that  the  range  of  information  is  harmonised  with  the  content  of  the 
Directive and is identical for all scheme members regardless of whether they remain in their 
Member State of origin or move to another Member State.  

However, eight States (Greece, Portugal, Malta, the Netherlands, Ireland, Latvia, Luxembourg 
and Norway) adopted explicit rules in this respect. It is very important that workers receive 
adequate  information,  particularly  with  regard  to  the  choices  and  alternatives  available  to 
them  before  going  to  work  in  another  Member  State.  In  some  Member  States  the  Directive 
gave rise to an extension of the information rights in this respect. But most of the countries 
referred to their already existing information requirements prior to the Directive.  

For  the  corresponding  references  in  the  national  provisions  see  Annex  1  -  Table  5 
"Information provided to scheme members" in the Commission Staff Working Document of 
the  Report  on  the  Implementation  of  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. 

IV. 

CONCLUSION AND DEVELOPMENT 

As  far  as  the  first  two  measures  for  safeguarding  of  pension  rights  are  concerned  -  equal 
preservation  and  cross-border  payments  –  the  analysis  of  the  Member  States'  responses 
reveals  that  according  to  certain  Member  States  these  rights  were  already  sufficiently 
guaranteed  in  these  Member  States  before  the  entering  into  force  of  the  Directive. 
Nevertheless,  the  codification  of  these  rights  through  the  Directive  will  give  more  legal 
certainty, helping workers who are considering whether they will move abroad. Moreover, by 
enshrining these principles in EU legislation there is a guarantee that the mobile worker will 
not be confronted with a situation that falls behind the standards set at EU-level.  

The rights laid down in Article 6 not only serve to increase legal certainty, but also provide a 
simple  procedure for  allowing  a  member to continue to build up his supplementary pension 
entitlements  during  his  period  of  posting.  Therefore  Article  6,  which  allows  cross-border 
membership, serves to provide adequate protection for workers who are temporarily posted to 
another  Member  State.  It  is  just  as  important  that  this  cross-border  membership  does  not 
become less attractive because the employer or his worker has to pay contributions due to an 
obligatory pension  scheme established  in the  Member States  in  which  the  worker is posted. 
Accordingly, facilitating cross-border membership of posted workers can be considered as an 
important step towards facilitating labour mobility in the field of short-term posting within the 
meaning of Regulation 1408/71/EEC.  

As regards the information provided to scheme members, the impact of the Directive on the 
Member States' information regulations was important, even if the majority of existing rules 
already required the provision of information to the minimum level stipulated in Article 7.  

Supplementary  pension  schemes  have  not  yet  developed  in  all  Member  States  into  a 
significant component of national pension systems. However, as the joint report on adequate 

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and  sustainable  pensions9  demonstrated  many  Member  States  have  recently  made  structural 
pension reforms which impact on the design of their supplementary pension schemes. These 
reforms  often  result  in  an  increasing  role  for  supplementary  pension  provision  in  ensuring 
adequate income protection in old age for citizens of the European Union. It is therefore of 
great importance that the supplementary pension rights of a worker exercising his right to live 
and work in another Member State become adequately protected.  

Following  the  adoption  of  the  present  Directive,  further  legal  actions  at  EU-level  have 
contributed to enhance the exercise of the right of freedom of movement of workers: 

Cross-border payments 

The first action concerns the guarantee of cross-border payments, net of taxes and transaction 
charges  which  may  be  applicable.  Not  only  the  non-receipt  of  a  payment,  but  also  the 
deduction of high transaction charges before a payment is made to another country, can affect 
the  mobility  of  workers.  Regulation  (EC)  No  2560/2001  of  19  December  2001  on  cross-
border payments in euro helps to lower such charges.  

Cross-border membership 

In the area of cross-border membership the adoption of Directive 2003/41/EC of 3 June 2003 
on the activities and supervision of institutions for occupational retirement provision ("IORP 
Directive", also known as "Pension Fund Directive") constitutes a further legal action at EU-
level. Mutual recognition of supervision of institutions for occupational retirement provision 
(IORPs),  introduced  by  the  Directive,  was  a  basic  condition  which  allowed  cross-border 
activity  of  these  institutions,  and  consequently  opened  possibilities  for  cross-border 
membership.  Through  such  provisions,  the  IORP  Directive  significantly  facilitates  cross-
border  mobility.  Cross-border  membership  has  the  advantage  that  the  worker  can  remain  in 
the  same  scheme  while  moving  to  a  job  in  another  Member  State,  so  that  no  change  of  a 
scheme takes place.  

The  initiative  of  the  Commission  in  the  field  of  pension's  taxation  to  eliminate  all  tax  rules 
that  discriminate  non-domestic  pension  funds,  aims  to  facilitate  cross-border  membership.. 
With the Communication (COM (2001) 214), the Commission announced to monitor national 
tax rules impeding cross-border participation in pension schemes and take the necessary steps 
to  ensure  effective  compliance  with  the  Treaty.  As  a  result,  the  Commission  has  launched 
infringement proceedings under Article 226 of the EC Treaty against some Member States10. 

Information requirements 

In  the  field  of  information  further  action  was  also  taken  in  the  framework  of  the  IORP 
Directive.  It  took  a  step  forward  by  requiring  institutions  for  occupational  retirement 
provision to provide their scheme members and beneficiaries with a range of information on 
matters affecting their benefits. However, as the scope of the IORP Directive is not identical 

9 

10 

Joint report by the Commission and the Council on adequate and sustainable pensions, as endorsed by 
the  Council  on  6  March  (Employment,  Social  Policy,  Health  and  Consumer  Affairs)  and  on 
7 March 2003  (Economic  and  Financial  Affairs)  as  a  contribution  to  the  European  Council  on 
20-21 March 2003, pages 8-9, Council Ref. 6527/2/03/REV 2. 
Further information is available at:   
http://europa.eu.int/comm/taxation_customs/taxation/personal_tax/pensions/index_en.htm 

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to  the  present  Directive,  these  provisions  do  not  concern  all  providers  of  supplementary 
pension provision. 

Perspectives 

None  of  the  governments  reported  that  discrimination  still  existed  in  domestic  and  cross-
border  cases,  or  that  the  exercise  of  the  rights  relating  to  postings  of  workers  within  the 
Member  is  hampered  in  practice.  This  is  almost  without  exception  the  case  regarding  the 
replies  from  the  members  of  the  Pensions  Forum.  Only  one  member  stated  that  there  are 
problems with regard to the practical application of the Directive 

For example, the member indicated that there are difficulties in exercising the right  to keep 
contributing to the scheme of origin during the period of posting.  

If  there  were  reports  of  disadvantages  the  workers  are  faced  with  in  this  context,  the 
governments  and  the  members  of  the  Pensions  Forum  most  frequently  referred  to  problems 
which result from different fiscal systems and different rules on the acquisition of rights. The 
latter  refers  to  what  is  often  called  "portability"  of  supplementary  pension  rights,  i.e.  the 
possibility  of  acquiring  and  keeping  pension  entitlements  in  the  event  of  professional 
mobility. In other cases there might be not the problem of vesting but the problem of claiming 
rights in practice.  

However, the present Directive does not address these obstacles to mobility. Thus, obstacles 
to free movement of workers in the field of supplementary pensions still exist. The Directive 
itself  expresses  this  view  by  saying  that  the  Directive  constitutes  only  a  first  measure  (see 
recital 4) and just "contributes" to the removal of obstacles to the free movement (see recital 
(7) and Article 1).  

The Commission has recognised that insufficient portability of supplementary pension rights 
can  create  important  obstacles  to  workers'  mobility,  and  therefore  to  the  free  movement  of 
workers which is one of the basic rights enshrined in the Treaty. 

The  Commission  consulted  the  social  partners  at  two  occasions,  lastly  in  September  2003 
(SEC(2003)916).  With  this  communication  it  has  launched  the  second  stage  consultation  of 
social  partners  on  measures  to  improve  the  portability  of  occupational  pension  rights  and 
suggested  that  a  European  collective  framework  should  be  negotiated  in  this  field.  As  the 
social  partners  have  diverging  opinions  on  the  need  to  start  negotiations,  the  Commission 
presented  the  20th  October  2005  a  proposal  for  a  directive  improving  the  portability  of 
supplementary pension rights11. 

11 

(COM(2005) 507 final of 20.10.2005). Proposal for a Directive of the European Parliament and of the 
Council on improving the portability of supplementary pension rights 

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