Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions concerning the implementation by Bulgaria and Romania 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 (Situation at 1 September 2008) {SEC(2009) 813}
Date: 2009-06-26
Institutions: European Commission
Subjects: EU Member State, free movement of workers, pension scheme, report, self-employment, social security, transfer of pension rights, wage earner

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 26.6.2009 
COM(2009) 283 final 

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

concerning the implementation by Bulgaria and Romania 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 

(Situation at 1 September 2008) 

{SEC(2009) 813} 

EN 

   EN 

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

concerning the implementation by Bulgaria and Romania 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 

(Situation at 1 September 2008) 

(Text with EEA relevance) 

1. 

INTRODUCTION 

On 29 June 1998, the Council adopted Directive 98/49/EC on safeguarding the supplementary 
pension rights of employed and self-employed persons moving within the Community. This 
Directive  was  to  be  implemented  on  25 July 2001  in  the  fifteen  old  Member  States, 
1 May 2004 in the ten States acceding to the European Union on that date and 1 January 2007 
in  Bulgaria  and  Romania.  Under  Article  10(3)  of  the  aforementioned  Directive,  its 
implementation has been the subject of a report by the Commission1. This report concerns the 
application of the Directive in Bulgaria and Romania, which acceded to the European Union 
on 1 January 2007. 

To gain an overview of progress in transposing this Directive in Bulgaria and Romania, the 
Commission  sent  a  questionnaire  to  the  governments  of  these  two  Member  States.  Their 
answers  show  that  they  have  adopted  specific  measures  to  transpose  Directive  98/49/EC  in 
their  respective  legal  systems.  Bulgaria  has  done  so  by  means  of  the  Act  of  11 July 2006 
amending  its  Social  Insurance  Code.  Romania  has  complied  with  the  provisions  of  the 
Directive by adopting Act 204 of 22 May 2006 on voluntary pensions. 

2. 

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 arrangement 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  that  are  covered  by  the 
term "legislation" as defined by the first subparagraph of Article 1(j) of Regulation (EEC) No 
1408/71, or in respect of which a Member State makes a declaration under that Article. 

1 

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, COM(2006) 22, final version of 26 January 2006. 

EN 

2 

   EN 

 
 
 
                                                 
The  answers  by  Bulgaria  and  Romania  to  the  questionnaire  provide  concise  descriptions  of 
the supplementary pension schemes covered by the Directive in these two Member States. For 
example, in both Bulgaria and Romania, a supplementary pension scheme for the purposes of 
transposing Directive 98/49/EC includes only voluntary supplementary pension schemes. 

3. 

MEASURES  FOR  SAFEGUARDING  PENSION  RIGHTS  OF  WORKERS 
MOVING WITHIN THE COMMUNITY 

3.1. 

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

The aim of this Article is to ensure that persons moving from one Member State to another are 
in no worse a position than those leaving a job but remaining within the same Member State. 
By  laying  down  this  principle,  Article  4  ensures  as  a  minimum  standard  equal  treatment  of 
domestic and cross-border cases as far as the preservation of vested rights is concerned. 

Paragraphs 1 and 2 of Article 248a of the Bulgarian Social Insurance Code and Article 51 of 
Act 204/2006 in Romania ensure the preservation of the vested pension rights of a member 
who moves to another State. 

3.2. 

Guarantee of cross-border payments 

According to Article 5 of the Directive, Member States shall ensure that all benefits due 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 that may be applicable. The payment of benefits throughout Europe is an 
essential prerequisite for compliance with the principles of free movement of workers and free 
movement of capital. 

Article  248b  referring  to  Articles  256  and  257  of  the  Bulgarian  Social  Insurance  Code  and 
Article 77(5) of Romanian Act 204/2006 guarantee cross-border payments. 

3.3. 

Cross-border membership of posted workers 

Article 6 concerns posted workers within the meaning of Regulation (EEC) No 1408/71. Such 
a posting is a situation where workers are temporarily sent by their employers to a Member 
State  other  than  the  one  in  which  they  are  normally  employed.  The  maximum  period  for  a 
posting is 12 months; in exceptional cases it may be extended to 24 months. Throughout the 
posting period, there is a direct relationship between the posting undertaking and the posted 
worker. 

Article 6 allows cross-border membership by stipulating that employers and posted workers 
must  be  allowed  to  continue  to  make  contributions  to  the  supplementary  pension  scheme 
established  in  the  Member  State  of  origin  throughout  a  posting  to  another  Member  State. 
Where  contributions  continue  to  be  made,  the  Member  States  are  requested  to  ensure  that 
posted  workers  and  employers  are  exempt  from  any  obligation  to  make  contributions  in 
another Member State. 

EN 

3 

   EN 

 
Bulgaria and Romania have correctly transposed the provisions of Article 6 of the Directive in 
their  respective  legal  systems.  The  two  Member  States  guarantee  the  cross-border 
membership  of  posted  workers  by  means  of  paragraphs  8  and  9  of  Article  230  of  the 
Bulgarian Social Insurance Code and Article 77(2) of Romanian Act 204/2006.  

3.4. 

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 must 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. 

Bulgaria  ensures  that  the  holders  of  supplementary  pensions  are  provided  with  adequate 
information by means of Article 123h(2) of its Social Insurance Code and Romania does so 
by means of Article 103 of Act 204/2006. 

4. 

CONCLUSION 

Directive 98/49/EC is part of the acquis communautaire that must be transposed into the legal 
systems  of  prospective  Member  States  before  they  join  the  EU.  The  answers  given  by 
Bulgaria and  Romania  to the European Commission show that these two States ensured the 
application  of  the  aforementioned  Directive  before  their  accession.  For  example,  the  Act 
amending  the  Social  Insurance  Code  adopted  by  Bulgaria  on  11 July 2006  and  Act 204 
adopted by Romania on 22 May 2006 ensure the elimination of any barriers that might have 
been  encountered  by  migrant  workers  attempting  to  safeguard  their  supplementary  pension 
rights. 

Other factors have also made it easier to exercise the right of free movement of workers. For 
example, Regulation (EC) No 2560/2001 of 19 December 2001 on cross-border payments in 
euro  helps  to  lower  any  transaction  charges  that  may  apply.  Likewise,  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  the  "Pension  Fund  Directive")  constitutes  a  substantial  measure  at  EU  level.  The 
mutual  recognition  of  supervision  of  institutions  for  occupational  retirement  provision 
(IORPs), which has been established by the Directive, is a basic condition permitting cross-
border  activity  by  these  institutions  and  therefore  creating  opportunities  for  cross-border 
membership. 

Furthermore,  the  Proposal  for  a  Directive  of  20 October 2005  on  the  portability  of 
supplementary  pension  rights2  is  an  additional  stage  intended  to  improve  the  situation  of 
mobile workers by guaranteeing their rights under supplementary schemes. 

2 

Proposal  for  a  Directive  of  the  European  Parliament  and  the  Council  on  improving  the  portability  of 
supplementary  pension  rights,  COM(2005)  507,  final  version  of  20 October 2005,  and  the  Amended 
Proposal  for  a  Directive  of  the  European  Parliament  and  the  Council  on  minimum  requirements  for 
enhancing worker mobility by improving the vesting and preservation of supplementary pension rights, 
COM(2007), final version of 9 October 2007. 

EN 

4 

   EN 

 
                                                 
This proposal has not yet received the unanimous approval necessary for its adoption by the 
Council and European Parliament. 

EN 

5 

   EN