Co-Ordination of Pensions in the European Union: The Case of Mandatory Defined-Contribution Schemes in the Central and Eastern European Countries

Abstract

This article investigates mandatory funded defined-contribution pension schemes of six new Member States of the European Union (Hungary, Poland, Latvia, Estonia, Lithuania, the Slovak Republic) in respect of the co-ordination of these schemes for persons moving within the Community. It considers how such schemes are coordinated and under which rules. It looks at the principal and practical implications. It argues that the existing legal dichotomy of statutory and supplementary pension schemes, upon which the Community co-ordination rules are established, is no longer functional. The article suggests that mandatory funded defined-contribution pension schemes should fall under the scope of Regulation 1408/71 (which is to be replaced by Regulation 883/2004), but simultaneously the schemes should be subject to Directive 98/49 and the new portability directive, once the latter is adopted. However, amendments are needed to all these Community instruments to make them suitable for the co-ordination of mandatory funded defined-contribution schemes.