SOS your pension! – The EU pension scheme is a barrier to mobility

  • For those who choose to leave the institutions before reaching 10 years of service, “transfer-out” of pension rights to a private scheme is possible but under very strict conditions that limit the range of financial products available for the transfer (see here). In particular, the available private schemes charge a high entry fee because they are fully aware that their customers have no viable alternative.
  • For those who remain for more than 10 years in service, the “transfer-out” of pension rights can only be back to national systems where the applicable conditions are left to the discretion of national authorities. In particular, there is no transparency on the amount of pension rights that the “transfer-out” will generate in countries where pensions are based on an annuity principle (countries where in order to get a pension, you need to have contributed for a number of years).

  • If one keeps one’s rights in the EU system and acquires pension rights elsewhere after leaving the institutions after more than 10 years of service, it is very likely that the country in which one moves will grant no further pension or a very small additional pension on the grounds that the potential beneficiary already has access to the EU pension scheme.
  • As a result, there is little flexibility for “transfers out”. For those who decide so or are forced to leave the institutions, tough luck for their pension!
  • Contract agents in executive and decentralised agencies, many of whom will serve more than 10 years, will be the primary victims of this barrier to mobility.

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