Amended proposal for a Council Directive on safeguarding the supplementary pension rights of employed and self- employed persons moving within the European Union
COMMISSION OF THE EUROPEAN COMMUNITIES ir * Brussels, 27. 05. 1998 COM(1998) 325 final 97/0265 (CNS) Amended proposal for a COUNCIL DIRECTIVE ON SAFEGUARDING THE SUPPLEMENTARY PENSION RIGHTS OF EMPLOYED AND SELF-EMPLOYED PERSONS MOVING WITHIN THE EUROPEAN UNION (presented by the Commission pursuant to Article 189 a (2) of the EC-Treaty) EXPLANATORY MEMORANDUM On 8 October, the Commission presented a proposal for a Council Directive on the supplementary pension rights of employed and self-employed safeguarding persons moving within the European Union1. The purpose of this Directive is to provide protection, as regards supplementary pension schemes (retirement, invalidity or survivors), for the pension rights of workers and members of their families who move from one Member State of the European Union to another. Such protection covers, in particular, the preservation of supplementary pension rights under supplementary schemes, whether membership thereof is optional or compulsory, as well as cross-border payment of benefits and possible cross-border affiliation for posted workers. In the Green Paper on Supplementary Pensions in the Single Market, the Commission posed a number of questions to all interested parties (including governments, social partners, and supplementary pension scheme representatives) which are intended to deepen the analysis of the remaining problems which constitute obstacles to free movement. At present, the Commission services are analysing the reactions of all involved parties and in the light of the outcome of this debate, the Commission could take further action in this area. The Economic and Social Committee and the European Parliament have been consulted on the basis of Articles 51 and 235 of the Treaty, and the Economic and Social Committee has given a favourable opinion on the proposal. The European Parliament, in its plenary session of April 1998. adopted several amendments to the initial text of the Commission. The Commission could accept the majority of the amendments proposed by the European Parliament because these amendments clarify the existing provisions. Therefore the Commission proposes, on the basis of Article 189 a. § 2 of the Treaty, to modify its initial proposal in order to take account of certain amendments proposed by the European Parliament in its legislative resolution. COM(97) 486 final, JO C-005 du 09. 01. 98, p. 4 A COMMENT ON PROPOSED MODIFICATIONS 1. Amendment consisting in the addition of a new Recital 5a after the 5th Recital of the initial proposal. This amendment reflects the proposal of the Economic Affairs Committee of the EP. 2. Amendment consisting in the addition of a new Recital 7a after the 7,h Recital This amendment reflects the position of the EP which would like to cover the situation of forms of employment are covered by the proposal of the Commission implicitly. The EP is very sensitive to this aspect. temporary and part-time employment. These 3. Amendment consisting in the addition of a new Recital 12a after the 12"' Recital This amendment clarifies that this Directive is a first step on removing obstacles to free movement and that there is a need for further action in the future for the remaining obstacles relating to the supplementary pensions. 4. Amendment relating to the 13th Recital This amendment clarifies the scope of Article 7 to which refers Recital 13. 5. Amendment relating to Article 1 This amendment clarifies the scope of the Directive by insisting that this Directive promotes the free movement of employed and self-employed persons within the European Union. I Amendment relating to Article 2 f3 Amendment to replace the words "members of supplementary pension schemes" by "persons entitled to supplementary pension schemes" and the words "members of their families and their survivors" by "other entitled persons under such schemes". This amendment clarifies certain notions. 7. Amendment relating to Article 3(a) that Amendment clarifying the notion "supplementary pension" means invalidity, retirement and survivors' benefits intended to supplement or replace those provided in respect of the same contingencies by schemes covered bv Regulation (EEC) n° 140S71. 8. Amendment relating to Article 3(d) Amendment consisting of clarifying that the notion of "pension rights" covers the invalidity, retirement or survivors' benefits. 9. Amendment relating to Article 4 This amendment consists to clarify to scope of Article 4 which ensures the principle of equal treatment between persons moving within the same Member State and persons moving in another Member State, as far as the preservation of vested rights is concerned. It replaces also the words "members of their families or their survivors" by the words "other entitled persons under these schemes". 1. 0. Amendment relating to Article 5 Amendment consisting to replace the words "members of their families and their survivors" by the words '"other entitled persons under these schemes". As for amendment relating to Article 2. this amendment intends 'to clarifv the personal scope of the Directive 11. Amendment relating to Article 12(3) Amendment consisting to reduce the 6 years period to present a report on the implementation of the Directive to a four years period. 3 -4 PROPOSAL FOR A COUNCIL DIRECTIVE COM(97) 486 final of 8 October 1997 on safeguarding the of rights supplementary employed and self-employed persons moving within the European Union pension AMENDED PROPOSAL FOR A DIRECTIVE COUNCIL on safeguarding supplementary the pension rights of employed and self- employed persons moving within the European Union PREVIOUS VERSION presented by the Commission on 8 October 1997 NEW VERSION Taking account of certain amendments of the European Parliament THE COUNCIL OF THE EUROPEAN UNION, Unchanged Having regard to the Treaty establishing the European Community, in and particular Articles 51 and 235 thereof, Having regard to the proposal from the Commission (1), Having regard European Parliament (2), to the opinion of the Having regard to Economic and Social Committee (3), the opinion of the Whereas one of the fundamental freedoms of the Community is the free movement of persons; whereas the Treaty establishing the European Community provides that the Council shall, acting unanimously, adopt in the field of social such measures security as are necessary to provide freedom of movement of workers; Whereas the social security of workers is security assured by schemes and by supplementary social security schemes; statutory social Whereas the legislation already adopted by the Council with a view to protecting the social security rights of workers moving within the Community and of members of and more particularly their family, Unchanged Unchanged Unchanged 5" Regulations (EEC) Nos 1408/711 and 574/722 concern only statutory pension schemes; on June 16-17 Whereas the European Council meeting in Unchanged Amsterdam 1997 reaffirmed the importance it attaches to a properly functioning Single Market as an essential element of the overall strategy to promote economic competitiveness, growth and employment throughout the Union; Whereas to this end, in its Resolution on Unchanged Growth and Employment, the European Council meeting in Amsterdam on 16-17 June 1997 has agreed concrete action on making maximum progress with the final completion of the Single Market: making the rules more effective, dealing with the main distortions, competition, avoiding removing the sectorial obstacles to market integration and delivering a Single Market for the benefit of all citizens3; remaining market harmful tax Recital 5a (new) Whereas the free movement of workers is not only an essential element for the proper functioning of the single market but also a condition for the proper functioning of Economic and Monetary Union. Unchanged in its Recommendation Whereas 92/442/EEC of 27 July 1992 on the convergence of social protection objectives and policies4 the Council recommends, in point LB. 5 (h), that Member States should "promote, where necessary, changes to the OJ No L149, 5. 7. 1971, p. 2 ; Regulation as updated by Council Regulation (EC) No 118/97 of 2 December 1996 amending and updating Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons and to members of their families moving within the Community and Regulation (EEC) No 574/72 for implementing Regulation (EEC) No 1408/71 (OJNo L28, 30. 1. 1997) OJ no L74, 27. 3. 1972, p. 1 ; Regulation as updated by Council Regulation (EC) No 118/97 OJ No C236, 2. 8. 1997 OJ No L245, 26. 8. 1992, p. 49 the procedure laying down conditions governing the acquisition of pension and, especially, supplementary pension rights with a view to eliminating obstacles to the mobility of employed workers"; Whereas this objective can be achieved Unchanged only if supplementary pension rights are afforded appropriate protection when a worker moves from one Member State to another; Recital 7a (new) Whereas adequate pension rights must be better guaranteed in respect of temporary and part-time employment, which is becoming increasingly common; whereas, therefore, the Commission should also take account of such employment when formulating pension proposals. for Unchanged freedom of movement Whereas persons, which is one of the cornerstones of the Community, is not confined to employed persons but also extends to self- employed persons in the framework of the freedom of establishment and the freedom to provide services; Whereas, in order to enable the right to Unchanged free movement to be exercised effectively, workers should have certain guarantees regarding the preservation of their vested rights supplementary from deriving pension schemes; Whereas the Member States should take Unchanged the necessary measures to ensure that benefits under supplementary pension schemes are paid to members and former members thereof as well as to members of their families or their survivors in all Member States of the European Union, given that all restrictions on the free movement of payments and capital are now prohibited under Article 73b of the Treaty European Community; establishing the A- Whereas in order to facilitate the exercise Unchanged of the right to free movement, national regulations should be adjusted in order to enable contributions to continue to be supplementary made pension in one Member State by or on behalf of workers who are posted, for a short duration, to another Member State; to an approved established scheme of the only abolition Whereas in this regard the Treaty requires Unchanged not any discrimination based on nationality but also the elimination of any national measure likely to impede or render less attractive the exercise by workers of the fundamental freedoms guaranteed by the Treaty as interpreted by the Court of Justice in successive judgements; the towards regulation of Recital 12a (new) Whereas this directive is merely a first step the supplementary pension system with the aim of removing obstacles to the mobility of workers; whereas, where necessary, the Council will in future adopt further legal acts Whereas this Directive in the limited field of application of posted workers is without prejudice to the need to find a suitable solution to the wider problem of the taxation of supplementary pensions within the Community. Whereas this Directive in the limited field of application of posted workers is without prejudice to the need to find a suitable solution at Community level to the wider problem of the taxation of supplementary the Community, in particular concerning the tax supplementary pension contributions and the taxation of the final benefits. pensions within deductibility of Whereas workers exercising their right to Unchanged free movement should be adequately informed of supplementary schemes, particularly with regard to the choices and alternatives available to them; the managers pension by % is without Unchanged applicability this Directive the to Whereas to prejudice supplementary pension schemes of the single market rules and the competition rules of the European Community; the Treaty establishing Whereas, by reason of the diversity of Unchanged supplementary social security schemes, the Community should lay down only a general framework of objectives, leaving the Member States to choose freely what measures to adopt to implement those objectives; Whereas the Member States, in order to Unchanged attain these objectives, must adjust their national laws and, this being the case, a legal directive instrument; appropriate the is Whereas, in accordance with the principles Unchanged of subsidiarity and proportionality as set out in Article 3b of the Treaty, the objectives of this Directive cannot be the Member sufficiently achieved by States and can therefore be better achieved by the Community; whereas this Directive limits itself to the minimum required for the attainment of those objectives and does not go beyond what is necessary for that purpose; Whereas one of the fundamental freedoms Unchanged of the Community is the free movement of persons; whereas the Treaty establishing the European Community provides that the Council shall, acting unanimously, adopt in the field of social such measures to provide security as are necessary freedom of movement of workers; HAS ADOPTED THIS DIRECTIVE Article 1 The aim of this Directive is to ensure that appropriate protection is given to rights, acquired or in the course of acquisition, of self-employed The aim of this Directive is to promote the and of free movement the. employed persons within R of supplementary members pension schemes who move from one Member State to another within the European Union. Such protection refers in particular to the preservation of pension rights under compulsory both supplementary pension schemes, with the exception of schemes already covered by Council Regulation (EEC)N° 1408/71. voluntary and European Union by ensuring that the to pension rights of persons entitled supplementary pensions and who move from one Member State to another are suitably protected. Such protection refers to pension rights under both voluntary and compulsory supplementary pension schemes with the exception of schemes covered by Regulation No 1408/71. Article 2 This Directive shall apply to members of supplementary pension schemes who have acquired or are in the process of acquiring rights in one or more Member States, and to members of their families and their survivors. to This Directive shall apply to persons pension supplementary entitled schemes and other entitled persons under such schemes who have acquired or are in the process of acquiring rights in one or more Member States SECTION 2 Definitions Article For the purpose of this Directive: and retirement "supplementary pension" means a) invalidity, survivors' benefits intended to supplement or replace those provided in respect of the same contingencies by statutory social security schemes; 'supplementary retirement to pension' means a) and survivors' invalidity, benefits supplement or replace those provided in respect of the same contingencies by schemes covered by Regulation (EEC) No 1408/71. intended "supplementary pension scheme" Unchanged b) means any occupational pension scheme and collective arrangement serving the same aim, such as a group insurance contract, branch or sectoral pay-as-you-go scheme, scheme or pension promise backed by book reserves, intended to provide a supplementary pension for employed or self-employed persons; funded "approved supplementary pension c) scheme" means a supplementary pension scheme which, in the Member State in the which conditions required by that Member State is established, satisfies it Unchanged AO for the granting of particular tax reliefs to available that supplementary pension provision; relation are in "pension rights" means invalidity, d) benefits to which a scheme member is retirement or survivors' benefits to which entitled under a supplementary pension a scheme member is entitled under a scheme; supplementary pension scheme. 'pension rights' means any any "vested pension rights" means any Unchanged e) rights the to benefits obtained after fulfilment of the minimum conditions, in particular of vesting periods, required by the rules of a supplementary pension scheme. "Vesting period" means any for period admission to a supplementary pension scheme and for the acquisition of rights thereunder; consideration taken into "Worker" means an employed or a Unchanged f) self-employed person; Unchanged g) "Posted worker" means a worker who is posted to work in another Member State and who under the terms of Title II of Regulation (EC) 1408/71 continues to be subject the Member State of origin, and "Posting" shall be construed accordingly; legislation of the to h) "Member State of origin" means the Member State in which a worker has worked immediately prior to the posting and in which the supplementary pension scheme of which he is a member is established; Unchanged i) "host Member State" means the Member State to which a worker is posted. Unchanged SECTION 3 for protecting the Measures supplementary of workers moving within the European Union pension rights A\ Article 4 in Member States shall take the necessary measures to ensure that the vested pension rights of supplementary pension scheme members are preserved when they move from one Member State to another within the European Union. To this end Member States shall ensure that full preservation of vested pension rights shall be guaranteed for members respect of whom contributions are no longer being made to a supplementary pension scheme as a consequence of their moving from one Member State to another, at least to the same extent as for members in respect of whom contributions are no longer being made but who remain within the Member State in question. This provision shall also apply to members of their families and their survivors. Article 5 Member States shall ensure that, in respect of members of supplementary pension schemes, as well as members of their families survivors, supplementary pension schemes make full payment in other Member States of all benefits due under such schemes. their and Article 6 1. Member States shall adopt such measures as are necessary to enable contributions to continue to be made to a scheme supplementary established in the Member State of origin by or on behalf of a posted worker who is a member of such scheme during the period of his or her posting to the host Member State. pension this Article, 2. Where, pursuant contributions continue to be made to a supplementary pension scheme in the to that to ensure Member States shall take the necessary measures the vested pension rights of supplementary pension scheme members are preserved when they move from one Member State to another. To this end, Member States shall ensure that full preservation of vested pension rights shall be guaranteed for members, even if_ contributions are no longer being made to a supplementary pension scheme as a consequence of their moving from one Member State to another, to the same extent as for members in respect of whom contributions are no longer being made but who remain within the Member State in question. This Article shall also apply these to other entitled persons under schemes. that, Member States shall ensure in respect of members of supplementary pension schemes, as well as members of other these entitled persons under schemes, supplementary pension schemes make full payment in other Member States of all benefits due under such schemes. Unchanged At Member State of origin, the host Member State shall recognise these as equivalent to a supplementary to contributions pension scheme in the host Member State. Article 7 Where contributions continue to be made in accordance with Article 6 (1) to an approved supplementary pension scheme, a host Member State shall, to the extent that treat such taxing rights, contributions in the same way as it would treat contributions paid to a comparable approved supplementary pension scheme established in the host Member State. it has Article 8 schemes Member States shall take measures to ensure that managers of supplementary pension adequate information to scheme members as to their pension rights and the choices which are available to them under the scheme when they move to another Member State. provide Unchanged Unchanged SECTION 4 Final Provisions Article 9 Member States may provide that the provisions of Article 6 shall apply only to postings that commence on or after the date of entry into force of this Directive. Unchanged Article 10 Member States shall introduce into their national legal systems such measures as are necessary to enable all persons who consider themselves wronged by failure to apply the provisions of this Directive to pursue their claims by judicial process after possible recourse to other competent Unchanged M Unchanged authorities. Article 11 to Member States shall lay down the system of penalties for breaching the national provisions adopted pursuant this Directive, and shall take all the measures necessary to ensure that those penalties are applied. The penalties thus provided for shall be effective, proportionate and shall dissuasive. Member communicate the relevant provisions to the Commission not later than 18 months following the entry into force of this Directive and shall communicate any subsequent changes as soon as possible. States Article 12 and later regulations 1. Member States shall bring into force the Unchanged administrative laws, provisions necessary to comply with this Directive not than 18 months following the date of its entry into force, or shall ensure by that date at the latest that management and the required provisions by way of agreement; the Member States being obliged to take all necessary steps enabling them at all times to guarantee the results imposed by this Directive: They shall immediately inform the Commission thereof. introduce labour adopt When Member States these provisions, these shall contain a reference to this Directive or shall be accompanied by such reference at the time of their official publication. The procedure for such shall be adopted by reference Member States. They shall inform the Commission of the national to be contacted regarding the application of this Directive. authorities 2. Not later than two years following, the entry into force of this Directive, Member Unchanged AU shall communicate the States Commission the text of the provisions of national law which they adopt in the field covered by this Directive. to Member States shall supply, by the same date, a correlation table showing the pre existing national provisions or those which have been introduced in order to comply with each provision of this Directive. 3. On the basis of the information supplied by Member States, the Commission shall draw up a report for submission to the European Parliament, the Council and the Economic and Social Committee, within six years of the entry into force of this Directive. On the basis of the information supplied by Member States, the Commission shall draw up a report for submission to the European Parliament, the Council and the Economic and Social Committee, within four years of the entry into force of this Directive. this Directive and The report shall deal with the application of shall, where appropriate, propose any amendments that may prove necessary. Unchanged Article 13 This Directive shall enter into force on the twentieth day its following publication in the Official Journal of the European Communities. that of Unchanged Article 14 This Directive is addressed to the Member States. Done at Brussels, For the Council The President 4 b ISSN 0254-1475 COM(98) 325 final DOCUMENTS EN 04 05 06 10 Catalogue number : CB-CO-98-329-EN-C ISBN 92-78-36363-4 Office for Official Publications of the European Communities L-2985 Luxembourg /6