Pension rights in Europe

The European Commission has recently published a report on pensions. In this report the EU pledges to further protect the pension rights of mobile workers. The EU aims to create a pensions tracking system across the EU, but also wants to strengthen current legislation.

Social security is already well coordinated Europe-wide and firmly in place across the EU to make sure that no one is deprived of the social security they would have received had they stayed their entire life in only one European member state.

The system currently works as follows: Every EU Member State (as well as Iceland, Liechtenstein, Norway and Switzerland) in which you have worked for a period of at least one year, will pay you an old-age pension when you reach the national pensionable age of that country. (The pensionable age differs across the EU). You will be eligible for as many separate old-age pensions as the number of EU countries you’ve worked in.

One of the basic principles of EU social security coordination is the aggregation of periods of time spent working. In plain English this means that you make a claim for a pension in the Member State in which you are residing. The social security institution of that country will contact the institutions of the European Member States in which you have worked. Each Member State will then calculate a rate for the actual number of years you have worked, based on the amount you would have received if you had spent your whole working life in that country. You will then receive a summary note detailing the rate at which each Member State will start paying to you.

The country in which you are resident and where you make your claim for an old-age pension is obliged to pay an immediate provisional pension. That is unless you have never worked in this particular country, in which case they will refer you back to the relevant institution in the Member State where you last worked, who will immediately pay a provisional pension.

Pension s are still a hugely complex subject which will vary on a case-by-case basis. To further understand your pension rights go to a dedicated website on social security coordination, created by the European Commission.

Read the full White Paper on pensions the EU created. It makes for some scary reading! Don’t expect a cosy retirement unless you prepare for it. State pensions might not be all that reliable in the future……..

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