The European Insurance and Occupational Pensions Authority (EIOPA) has published a Good Practices Report on transferability of supplementary pension rights. With this Report, EIOPA identifies the main impediments to cross-border and national transfers as well as a number of good practices to overcome these. This would create more transparency in the interest of consumers and facilitate the internal market for supplementary pension rights.
EIOPA outlines three key areas which – if addressed – could significantly facilitate the transferability of supplementary pension rights:
- Domestic and cross-border transfers should be treated equally. EIOPA considers it a Good Practice if cross-border transfers are not subject to stricter regulations or requirements than domestic transfers are. (Good Practice 3).
- Scheme members should receive adequate information in order to take informed decisions on whether a transfer is beneficial for them. It is essential that information is structured in different layers in order to make it more comprehensive. Additional relevant information can be provided via appropriate tools such as online platforms (Good Practice 7). Furthermore, it is considered as a Good Practice to enable the scheme member to receive advice on costs and charges in order to understand whether a transfer is in his/her best interest or not (Good Practice 8).
- In case scheme members are charged for the transfer, such charges should reflect the actual work necessary to carry out the transfer. This does not preclude lump sum charges as long as they reflect actual costs (Good practice 9).
- The transfer process could be more efficient to enable schemes to complete the transfers within reasonable time limits (Good Practice 11). The timescales should be reasonable for completing transfers, but without unnecessary delays.
Gabriel Bernardino, Chairman of EIOPA, said: “The increasing mobility of the workforce has made the issue of transferring pension rights nationally and across borders extremely relevant for many employees. EIOPA was asked by the Commission to explore measures for improving the transferability of vested pension rights. With this Good Practices Report, we promote more transparency and inform future discussions on this topic”.
The Good Practices Report on transferability of supplementary pension rights can be accessed from EIOPA’s website.