The European Commission, which has long promoted the free flow of workers in the EU, proposed legislation Thursday that would let people take the benefits of their supplemental pension plans with them when they take a new job in another EU nation.

European Union Employment Commissioner Vladimir Spidla said his bill - which has been debated on and off for at least 15 years - will let workers who move to a new country simply continue to contribute monthly payments to their supplemental plan the way they did before.

"If we expect workers to be mobile and flexible, we cannot punish them if they change jobs," Spidla said. "Pension rights must be fully transferable." 

The change is meant to encourage more mobility of workers to boost Europe's economic output, with the idea being that more flexible workers will mean the right skills gravitate more easily to the right parts of the EU labor market.
Under current rules, workers must close their credits in one country, freeze them and start over again in another country. However, there are different waiting periods and rules in many countries - and all the while the frozen credits may lead to diminishing returns.

At the moment, moving to a new country can lead to "significant losses," Spidla said.

The pensions issue has been batted around for many years as trade unions, employers federations and national governments are not accustomed or authorized to negotiate something EU-wide.

Spidla's bill comes at a time when governments are at pains to enact social and labor market reforms to get Europeans to work longer to contribute to social security programs.

But it faces formidable hurdles given the hodgepodge of rules and regulations in the 25 EU nations. Participation in the supplemental pension programs - to which both a worker and his or her employer contribute - varies greatly.
Eight countries - Estonia, the Czech Republic, Greece, Latvia, Lithuania, Hungary, Malta and Slovakia - now have no retirement plans other than their tax-funded, government-run programs.

Transferring any private plan from elsewhere to these countries would be difficult, officials said.

There are also significant differences among countries with supplemental plans, notably Germany, that would be exempted from the legislation for a decade.
Germany's supplemental pension credits now total 354 billion euros ($423 billion), according to EU figures. Sixty percent - 210 billion euros ($250.95 billion) - exists not as saved funds, but as "book reserves" - basically, IOUs to be paid out upon retirement.