GERMANY – German occupational pensions association Aba has again blasted the EU’s planned pensions portability directive, arguing it is even less workable following amendments at the European Parliament.

The directive was proposed by the European Commission late last year and forwarded to the European Parliament for approval by the end of this year.

In part to placate a hostile German pensions industry, the Commission agreed to exempt book reserve-funded schemes (Direktzusage) from the transfer of accrued pension benefits in the event of job change.

But Ria Oomen-Ruitjen, a Dutch MEP who is rapporteur for the directive, recently proposed rescinding the exemption, stating in a report that the directive “has to be given the broadest possible scope”.

Oomen-Ruitjen also upheld the Commission’s wish that employers protect accrued pension benefits for former employees from the effect of inflation. Aba contends that the move would not only drive up costs on employers, but also send the wrong signal - “namely that loyalty to the firm is to be penalised”.

Finally, the rapporteur, who sits on the Committee on Employment and Social Affairs, suggested that the portability directive apply only to “new pension rights,” as “it is difficult to intervene in existing arrangements”.

Said Germany’s Aba: “The report (from Oomen-Ruitjen) does not suffice in ensuring cross-border portability.”

“It also damages the principle of subsidiarity and will lead to negative consequences for corporate pensions in Germany,” the association said in a recent letter to the Parliament, a copy of which was obtained by IPE.

Aba’s attack on the portability directive is just the latest from both within and without Brussels. Beyond Germany, the directive is unpopular in the Netherlands and with the European Federation for Retirement Provision. MEPs have also joined the chorus of criticism.

But Aba also had some good things to say about Oomen-Ruitjen’s report. For example, it said: “We welcome the proposal under which member-states must ensure that tax laws do not hinder portability.”

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