CELEX: 51998PC0325
Language: en
Date: 1998-05-27
Title: Amended proposal for a Council Directive on safeguarding the supplementary pension rights of employed and self- employed persons moving within the European Union

COMMISSION OF THE EUROPEAN COMMUNITIES
ir *
                                           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)
 ---pagebreak---  ---pagebreak---                           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
 ---pagebreak---              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
 ---pagebreak---      Amendment relatingf3 to Article 2
     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
 ---pagebreak--- PROPOSAL FOR A COUNCIL                     AMENDED PROPOSAL FOR A
DIRECTIVE COM(97) 486 final of 8           COUNCIL         DIRECTIVE          on
October 1997 on safeguarding the           safeguarding    the     supplementary
supplementary pension rights of            pension rights of employed and self-
employed and self-employed persons         employed persons moving within the
moving within the European Union           European Union
PREVIOUS VERSION                                      NEW VERSION
presented by the Commission on 8           Taking account of certain amendments
October 1997                               of the European Parliament
THE COUNCIL OF THE                         Unchanged
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),
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;
Whereas the social security of workers is Unchanged
assured by statutory social security
schemes and by supplementary social
security schemes;
Whereas the legislation already adopted by Unchanged
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
                                          5"
 ---pagebreak--- 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 Unchanged
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
         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
 ---pagebreak--- 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-
 ---pagebreak--- 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;
                                             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 Whereas this Directive in the limited field
 of application of posted workers is         of application of posted workers is
without prejudice to the need to find a      without prejudice to the need to find a
 suitable solution to the wider problem of   suitable solution at Community level to
the taxation of supplementary pensions       the wider problem of the taxation of
 within the Community.                       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;
                                           %
 ---pagebreak--- 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 The aim of this Directive is to promote the
 appropriate protection is given to rights, free movement of employed and
 acquired or in the course of acquisition, of self-employed    persons within        the.
                                         R
 ---pagebreak--- members of supplementary pension            European Union by ensuring that the
schemes who move from one Member            pension rights of persons entitled to
State to another within the European        supplementary pensions and who move
Union. Such protection refers in particular from one Member State to another are
to the preservation of pension rights under suitably protected. Such protection refers
both       voluntary     and     compulsory to pension rights under both voluntary
supplementary pension schemes, with the     and compulsory supplementary pension
exception of schemes already covered by     schemes with the exception of schemes
Council Regulation (EEC)N° 1408/71.         covered by Regulation No 1408/71.
                   Article 2
This Directive shall apply to members of    This Directive shall apply to persons
supplementary pension schemes who have      entitled to supplementary         pension
acquired or are in the process of acquiring schemes and other entitled persons under
rights in one or more Member States, and    such schemes who have acquired or are in
to members of their families and their      the process of acquiring rights in one or
survivors.                                  more Member States
                 SECTION 2
                  Definitions
                   Article
 For the purpose of this Directive:
 a)      "supplementary pension" means       a) 'supplementary pension' means
 invalidity, retirement and survivors'       invalidity, retirement and survivors'
 benefits intended to supplement or replace  benefits intended to supplement or
 those provided in respect of the same       replace those provided in respect of the
 contingencies by statutory social security  same contingencies by schemes covered
 schemes;                                    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 Unchanged
 scheme" means a supplementary pension
 scheme which, in the Member State in
 which it is established, satisfies the
 conditions required by that Member State
                                            AO
 ---pagebreak--- 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 Unchanged
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;
h)      "Member State of origin" means Unchanged
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;
i)      "host Member State" means the Unchanged
Member State to which a worker is posted.
                SECTION 3
Measures        for    protecting      the
supplementary pension rights of
workers moving within the European
Union
                                           A\
 ---pagebreak---                   Article 4
Member States shall take the necessary        Member States shall take the necessary
measures to ensure that the vested pension    measures to ensure that the vested
rights of supplementary pension scheme        pension rights of supplementary pension
members are preserved when they move          scheme members are preserved when they
from one Member State to another within       move from one Member State to another.
the European Union. To this end Member        To this end, Member States shall ensure
States shall ensure that full preservation of that full preservation of vested pension
vested pension rights shall be guaranteed     rights shall be guaranteed for members,
for members in respect of whom                even if_ contributions are no longer being
contributions are no longer being made to     made to a supplementary pension scheme
a supplementary pension scheme as a           as a consequence of their moving from
consequence of their moving from one          one Member State to another, to the same
Member State to another, at least to the      extent as for members in respect of whom
same extent as for members in respect of      contributions are no longer being made
whom contributions are no longer being        but who remain within the Member State
made but who remain within the Member         in question. This Article shall also apply
State in question. This provision shall also  to other entitled persons under these
apply to members of their families and        schemes.
their survivors.
                  Article 5
Member States shall ensure that, in respect   Member States shall ensure that, in
of members of supplementary pension           respect of members of supplementary
schemes, as well as members of their          pension schemes, as well as members of
families       and       their     survivors, other entitled persons under these
supplementary pension schemes make full       schemes, supplementary pension schemes
payment in other Member States of all         make full payment in other Member
benefits due under such schemes.              States of all benefits due under such
                                              schemes.
                   Article 6
 1. Member States shall adopt such Unchanged
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.
 2. Where, pursuant to this Article,
contributions continue to be made to a
 supplementary pension scheme in the
                                              At
 ---pagebreak---  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 Unchanged
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.
                  Article 8
Member States shall take measures to Unchanged
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.
                 SECTION 4
              Final Provisions
                  Article 9
Member States may provide that the Unchanged
provisions of Article 6 shall apply only to
postings that commence on or after the
date of entry into force of this Directive.
                  Article 10
Member States shall introduce into their Unchanged
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
                                            M
 ---pagebreak--- authorities.
                 Article 11
Member States shall lay down the system Unchanged
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.
                 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 Unchanged
entry into force of this Directive, Member
                                               AU
 ---pagebreak--- 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  On the basis of the information supplied
by Member States, the Commission shall       by Member States, the Commission shall
draw up a report for submission to the       draw up a report for submission to the
European Parliament, the Council and the     European Parliament, the Council and the
Economic and Social Committee, within        Economic and Social Committee, within
six years of the entry into force of this    four years of the entry into force of this
Directive.                                   Directive.
The report shall deal with the application Unchanged
of this Directive and shall, where
appropriate, propose any amendments that
may prove necessary.
                  Article 13
This Directive shall enter into force on the Unchanged
twentieth day following that of its
publication in the Official Journal of the
European Communities.
                  Article 14
This Directive is addressed to the Member
States.
Done at Brussels,
For the Council
The President
                                           4b
 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(98) 325 final
                                              DOCUMENTS
EN                                                            04 05 06 10
                                    Catalogue number : CB-CO-98-329-EN-C
                                                             ISBN 92-78-36363-4
Office for Official Publications of the European Communities
L-2985 Luxembourg
                                              /6