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EURAXESS Researchers in motion

Retiring in Europe

Understanding the Impact of Mobility on Pensions

For researchers and professionals in Europe, mobility is a crucial part of career development. However, moving between countries can have significant implications for your pension entitlements. It’s essential to understand how mobility affects the accumulation and transfer of pension rights across different European countries.

The Three Pillars of Pension Systems in Europe

Each European Country has  different pension systems, but typically they consist of three main pillars:

State Pensions (First Pillar):

These are statutory pensions provided by the government, funded through social security contributions. State pensions are designed to ensure a basic standard of living for retirees. The rules and benefits vary significantly between countries, and they are often influenced by your contribution history and length of service within each country.

Transfers of state pensions within the EU are managed through a system of social security coordination, which ensures that individuals who have worked in multiple EU countries can still receive their pension benefits. This system is governed by EU regulations, particularly Regulation (EC) No 883/2004 on the coordination of social security systems and its implementing Regulation (EC) No 987/2009.

More information can be found on Your Europe.

Occupational Pensions (Second Pillar):

These pensions are linked to employment and are often provided by employers as part of the employment package. They can be mandatory or voluntary, depending on national regulations. Occupational pensions can be funded by both employer and employee contributions and can significantly supplement state pensions. They are crucial for maintaining your standard of living post-retirement.

International talents, especially researchers who are the most mobile among them, face difficulties in accumulating pension benefits when moving between countries. This is mostly caused by vesting periods, difficulty in transferring assets cross-border, and administrative burden.

  • Vesting periods refer to the time an employee must work for the same organisation before they earn the right to their pension benefits, potentially disadvantaging those who leave earlier.
  • Transfer in or out fees can significantly erode returns on investment, diminishing the overall benefits for retirees.
  • Managing received pension contributions, or accessing them at retirement age, can be particularly challenging for individuals, especially mobile employees, due to potential language barriers and geographical distance from pension institutions.

More information can be found on here.

Private Pensions (Third Pillar):

These are individual savings plans that you voluntarily contribute to, often incentivised by tax advantages. Private pensions provide additional financial security and flexibility, allowing you to tailor your retirement savings to your personal needs and preferences.

When you move to another country to live and work, the impact on your private pension can vary depending on several factors, such as:

  • Regulatory Differences: Each country has its own regulations governing private pensions, including tax treatment, contribution limits, and withdrawal rules. When you move to a new country, you must comply with the local regulations.
  • Transferability: Transferring private pension funds across borders can be challenging. Some pension providers may not allow transfers to foreign accounts, or there may be significant fees and tax implications associated with such transfers. It's important to check the terms and conditions of your private pension plan and consult with advisors to understand the potential costs and limitations.
  • Currency Risks: When you move to a country with a different currency, your private pension savings may be subject to currency exchange rate fluctuations. This can affect the value of your pension both during the accumulation phase and when you start drawing benefits.
  • Tax Implications: Tax treatment of private pensions can differ significantly between countries. Contributions, growth, and withdrawals may be taxed differently, impacting the overall value of your pension. Understanding the tax implications in both your home country and the new country is crucial to avoid unexpected tax liabilities and to optimize your pension savings.

Vesting Period

The vesting period refers to the time it takes for an employee's rights to employer contributions to become non-forfeitable.

RESAVER: A Pan-European Occupational Pension Solution

RESAVER (Retirement Savings Vehicle for European Research Institutions) is a pension solution tailored for researchers and employees of research institutions. It addresses the challenges posed by mobility, offering a European-wide occupational pension plan that allows you to stay within the same pension plan when moving between different countries and institutions that are members of RESAVER.

It's essential to understand that RESAVER is tailored for organisations and their dedicated employees, not for individual participants. Therefore, as an individual, you cannot enrol yourself in RESAVER. However, if your organisation is not yet part of RESAVER, you can recommend it to your organisation.

Explore RESAVER

Additional information

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European Commission

European Commission website containing comprehensive information on state, supplementary, and private pensions within the EU, including details on your rights and provisions, please visit the European Commission's dedicated page on pensions.

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Your Europe

Your Europe is a European Union portal that provides guidance and information on citizens' rights, including insights into social security and healthcare entitlements when residing or moving to another EU country.

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Europe Direct

Europe Direct is an information service provided by the European Union, available in all EU member states, that offers guidance and answers to citizens' questions, including those related to pensions, ensuring they fully understand their rights and opportunities within the EU.