EUROPE - Supplementary pension schemes continue to hinder workers' mobility across Europe, according to two studies presented by the European Commission (EC) today.

"The studies support the case for a Europe-wide initiative to improve people's access to supplementary pension rights when changing jobs or working in another EU country," pleaded the EC today.

The studies reveal over 40% of current workers might be disadvantaged from the current lack of proper regulation.

Vladimír Špidla, former Czech prime minister and EU commissioner for employment, social affairs and equal opportunities, called for a directive to improve worker mobility in the EU.

"These new studies clearly demonstrate the need for an effective and proportionate directive to reduce obstacles to mobility without placing undue burdens on pension providers," said Špidla.

The first study, 'Quantitative overview on supplementary pension provision', conducted by Hewitt Associates, examines supplementary pension scheme rules in major organisation from nine EU countries.

"Key findings show that many pension schemes do not impose any vesting period - the amount of time required for workers to accumulate pension rights - although there are still 32% of defined benefit (DB) schemes requiring workers to contribute to a pension scheme for more than two years before they acquire a right to a pension in retirement," said the EC.

The commission added the study also shows a quarter of DB schemes offer no revaluation of workers' dormant pension benefits when they move jobs: "In effect these rights are frozen until retirement."

The second study, entitled The mobility profile of 25 EU Member States - based on the Eurobarometer on Mobility, conducted by researchers at the Higher Institute for Labour Studies at the University of Leuven, shows on average 41% of current workers change jobs within five years and are therefore potentially disadvantages by the operation of long vesting periods found in supplementary pension schemes.

The results demonstrate the need for a directive to introduce "minimum standards to improve mobile workers' access to supplementary pension rights", and the need for those rights to be protected in the years between leaving an employer and retiring, commented officials at the EC.

"The measures proposed by the Commission in its amended proposal of October 2007 and subsequently developed during the Portuguese presidency can be seen as both a proportionate response to the problem and a meaningful step towards reducing obstacles to mobility found in some supplementary pension systems across the EU," added the EC.

Špidla said he will work with the Slovenian presidency on finding an agreement on the topic with council and parliament.

IPE reported last month EC officials thought they were one step closer to achieving an agreement on the vesting period applied to pension schemes - so individuals could transfer their pensions assets around Europe - but were struggling to persuade some governments a vesting period of less than five years was necessary. (See earlier IPE story: Pensions portability edges closer)

Have Your Say: Cees Paul of Kas Bank, commented:

"Portability may very well be just one problem in a cluster, hindering the mobility. Connected are differences in loan, housing and tax regulations, which tend to be untouchable 'holy houses' for the differing Member States. It would be nice to see the connection between those issues."

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on + 44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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