Supplementary pensions are an important source of income for many Europeans. As the social security coordination does not apply to most supplementary schemes, the EU has agreed upon special rules to protect the supplementary pension rights of mobile workers. These rules apply to pension schemes linked to employment ('occupational pensions').
Certain rules of supplementary pension schemes may cause workers to lose out on their pension rights when they move in the EU.
Schemes may require participants to fulfil certain conditions before their pension rights are irrevocably acquired, or 'vested'. For example, an employee who leaves the job and moves to another Member State may not earn any pension rights if he has not worked for the employer long enough.
Even if the pension rights have been vested when the worker leaves the scheme, their future value may be eroded by inflation, unless the pension rights are adequately preserved by adjusting their value over time.
Directive 98/49/EC on safeguarding the supplementary pension rights of employed and self-employed persons constituted a first step in removing obstacles to free movement relating to supplementary pensions. The principal provisions could be summarised as follows:
Directive 2014/50/EU on the acquisition and preservation of supplementary pension rights was adopted on 16 April 2014. It establishes the following minimum standards for the protection of mobile workers' pension rights, which Member States must transpose into national law by 21 May 2018:
The Directive applies to workers who move between Member States, however Member States may extend the same standards to workers who change jobs within the country.
The Directive does not cover the transferability of supplementary pensions, i.e. the possibility to transfer one's pension rights to a new scheme in the event of professional mobility.