Directive 2014/50/EU of the European Parliament and of the CouncilShow full title

Article 5 U.K. Preservation of dormant pension rights

1. Subject to paragraphs 3 and 4, Member States shall adopt the measures necessary to ensure that the vested pension rights of outgoing workers can remain in the supplementary pension scheme in which they vested. The initial value of those rights for the purposes of paragraph 2 shall be calculated at the moment in time when an outgoing worker's current employment relationship terminates.

2. Member States shall, having regard to the nature of the pension scheme rules and practice, adopt the measures necessary to ensure that outgoing workers' and their survivors' dormant pension rights or their values are treated in line with the value of the rights of active scheme members or the development of pension benefits currently in payment, or are treated in other ways which are considered as fair, such as:

(a) where the pension rights in the supplementary pension scheme are acquired as an entitlement to a nominal sum, by safeguarding the nominal value of the dormant pension rights;

(b) where the value of accrued pensions rights changes over time, by adjusting the value of the dormant pension rights by applying:

(i)

a rate of interest built into the supplementary pension scheme; or

(ii)

the return on investments derived by the supplementary pension scheme;

or

(c) where the value of the accrued pension rights is adjusted, for instance, in accordance with the inflation rate or salary levels, by adjusting the value of the dormant pension rights accordingly subject to any proportionate limit set by national law or agreed by the social partners.

3. Member States may allow supplementary pension schemes not to retain the vested rights of an outgoing worker but to pay, with the worker's informed consent, including as regards applicable charges, a capital sum equivalent to the value of the vested pension rights to the outgoing worker, as long as the value of the vested pension rights does not exceed a threshold established by the Member State concerned. The Member State shall inform the Commission of the threshold applied.

4. Member States shall have the option of allowing the social partners to lay down different provisions by collective agreement, to the extent that those provisions provide no less favourable protection and do not create obstacles to the freedom of movement for workers.