For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.
Benefits June 12, 2002
EU Tries To Bridge Pension Portability Gaps
June 12, 2002 (PLANSPONSOR.com) - The European-Union
Commission has kicked off talks with both unions and
corporate leaders in an effort to help workers more easily
switch jobs from country to country without losing part of
the pensions to taxes.
Reported by Fred Schneyer
Employees moving between countries have to get special permission and are often hit with a “prohibitive” tax bill, according to the commission.
It’s often difficult to even transfer pensions within the same country. In both France and Finland, employees can’t move pension assets from one company plan to another. Elsewhere, workers can transfer their assets, but often lose money in the process according to a Dow Jones report.
That difficulty may explain the job-switcher statistics. Only 16.4% of EU workers changed jobs in the first year, compared with 30% in the US, the Commission said.
The Commission also complained that companies make it unnecessarily difficult for workers to obtain any pensions in the first place. It criticized the high minimum age for membership and the lengthy qualifying periods for company pension plans.
Unions and employers must come up with proposals within 12 weeks to improve pension mobility. After that, the Commission could come up with its own legislation, officials said.