Book contents
- Frontmatter
- Contents
- Abbreviations
- Preface
- Foreword
- 1 Introduction
- 2 The Impact of the EU’s Institutional System on Pensions Law
- 3 Occupational Pensions and the Freedom to Provide Services
- 4 The Institution for Occupational Retirement Provision (IORP) Directive
- 5 Application of EU law on Pensions: The Property Issue
- 6 PEPP
- Index
3 - Occupational Pensions and the Freedom to Provide Services
Published online by Cambridge University Press: 20 February 2021
- Frontmatter
- Contents
- Abbreviations
- Preface
- Foreword
- 1 Introduction
- 2 The Impact of the EU’s Institutional System on Pensions Law
- 3 Occupational Pensions and the Freedom to Provide Services
- 4 The Institution for Occupational Retirement Provision (IORP) Directive
- 5 Application of EU law on Pensions: The Property Issue
- 6 PEPP
- Index
Summary
Introduction
The previous chapters made apparent that pension policy is not exclusively a national competence. Chapter 2 shed light on some of the EU's competences in the pension field, and also made clear that Member States’ pension systems affect the EU's internal market. Therefore – though the responsibility of regulating pension systems rests primarily with the Member States – those national pension systems must not unduly interfere with the functioning of the Single Market. The obligation for national pension systems to respect the requirements of the Single Market shall be explained by way of the example of compulsory membership in occupational pensions in relation to the freedom to provide services – a fundamental EU law principle aiming at ensuring the free movement of services throughout the territory of the EU.
The rationale for making membership in an occupational pension scheme compulsory is manifold. First, compulsory retirement saving can protect individuals against their own myopia: it is often difficult to foresee one's own needs in retirement, and the absence of an obligation to save could lead to insufficient preparation. In addition, compulsory membership can lead to cost savings created by the economies of scale resulting from a large number of pension scheme participants obliged to join the scheme. A large membership base also allows for the sharing of risks through solidarity within pension schemes. Such solidarity can manifest itself in, for instance, ‘the obligation to accept all workers without a prior medical examination, the continuing accrual of pension rights despite exemption from contributions in the event of incapacity for work, the discharge of the fund of arrears of contributions due from an employer in the event of the latter's insolvency and by the indexing of the amount of the pensions in order to maintain their value’ as well as an ‘absence of any equivalence, for individuals, between the contribution paid […] and pension rights’. The European Court of Justice recognized the importance of compulsory membership for the organization of solidarity where it noted that compulsory affiliation is ‘indispensable for application of the principle of solidarity and the financial equilibrium of those schemes’.
- Type
- Chapter
- Information
- EU Pension Law , pp. 55 - 76Publisher: Amsterdam University PressPrint publication year: 2019