Pension portability directive on cards from Dimas

By Peter Chapman

Date: 15/04/04

THE European Commission is poised to unveil a law that would make it easier for EU workers to move jobs without losing out on their company pensions.

European Voice has learned that aides to Stavros Dimas, the new commissioner for employment and social affairs, are preparing to brief member states on the plans before pressing ahead with a directive.

Governments would be given a chance to comment on the pensions blueprint before a June deadline, sources said.

The Commission would then be ready to unveil the draft law - which does not cover state pension entitlement - later this summer or, more likely, in the Autumn, they added.

The directive would tackle the worst barriers that could make workers think twice before they swap jobs - lest they jeopardize their pensions nest eggs.

For example, in cases where workers opt not to transfer pension entitlements accumulated with their old employer, these funds must take into account the effects of inflation.

At the same time, lengthy 'vesting periods', during which a new worker is not entitled to pension rights, would be targeted.

In some member states, such as Germany, staff are often forced to work for five years before they can benefit from company pension schemes. Experts believe this makes workers reluctant to switch jobs.

The move to draft a law follows the lack of interest from employers to thrash-out a formal agreement on the issue in discussions with the Commission and other so-called social partners.

Therese de Liedekerke, director for social affairs of EU-wide employers' group UNICE, said her organization believes the Commission should focus more of its efforts on tax barriers on pensions that are preventing workers moving to other member states. She also said bosses doubt whether national barriers to pension portability targeted during two rounds of consultation on the issue should be tackled at EU level.

Antonia Mochan, a spokeswoman for Commissioner Dimas, would not confirm the timing for the planned directive but acknowledged that the Commission had reserved the right to launch a binding law should discussions with employers and trade unions fail to yield an accord.

Dimas has only recently taken over from Anna Diamantopoulou, who returned to Greek politics in the run up to the recent election, and is understood to be reluctant to launch new legislation until he has mastered his brief.

The European Commission is considering a new directive which would make it easier for workers to change employment without losing out on their company pensions.