The European Parliament today adopted a first reading report that would seriously water down the proposed directive on the portability of supplementary pension rights. After the vote, UK Green MEP and shadow draftswoman Jean Lambert said:
“The European Parliament has gutted this proposed directive on transferring pension rights and adopted a text with little redeeming features. The purpose of the Commission’s text was to remove barriers to the mobility of workers in the EU by providing for the portability of
supplementary pensions rights but both the EP and the Council have torn the heart out of the proposal, which would no longer provide for the transfer of these rights when changing jobs.
“The remaining text deals with dormant pension rights or establishing minimum standards that should govern supplementary pensions, without facilitating the transfer of these rights. People should not have their contribution to pensions left like drying pieces of salami when they
move jobs. Age poverty is already a major risk and this directive will not help to fight it, if it means that people end up with 10 mini-pensions from 10 different employers over the course of their working lives.
“The Greens have tried to ensure that no minimum age was set for pension holders to hold all pension rights as this would be tantamount to age discrimination but the EP has regrettably rejected this approach and adopted a minimum age of 25 years. Those under 25 years could have to pay into a pension scheme for 5 years before acquiring their dormant rights.
“There were some silver linings to the EP’s vote, such as the proposal for no ‘vesting period’ (1) for pension holders over 25 and the fact that the dormant rights should apply to all pensions, and not just new pensions, as proposed by the Council. Overall though, today’s vote is a bad result, with the directive having being robbed of its main substance.”
(1) Vesting period is the period for which a pension holder would have to pay into a pension scheme before acquiring rights for that pension.