GERMANY - The unequal treatment of residents and non residents by aspects of Germany's pensions savings grant contradicts legislation on the free movement of workers and persons, the European Commission has said.
In a formal request, the EC has asked Germany to amend its pensions savings grant (the Altersvorsorgezulage), which was designed to encourage individuals to make their own capital-based provision for their old age, and to complement the social security pension.
The EC said three restrictions on the availability of the Altersvorsorgezulage did not conform with EU law.
These included the fact that non-resident workers in Germany, who earn less than 90% of their family income in Germany, cannot benefit from the grant even though they pay their social security contributions in Germany.
A second issue was that it is not possible to use the grant-aided capital for the acquisition of an owner-occupied dwelling, unless it is situated in Germany. The EC said this meant that it is impossible for frontier workers to use their savings capital to buy a dwelling in their state of residence.
The third complaint was that the grant must be repaid if a person’s full tax-liability ceases. The EC said this case would usually arise when migrant workers returned home after retirement, but could also involve German citizens retiring abroad.
The commission has alleged that through these rules, the Federal Republic of Germany has infringed Article 12 of the EC Treaty that prohibits discrimination on grounds of nationality; Article 18 that allows free movement of EU citizens; Article 39 of the EC Treaty that provides for the free movement of workers; and Article 7 of Regulation No 1612/68 that requires a national of a member state who works in another member state to be given the same social and tax advantages as national workers in that other member state.
It warned that if Germany does not reply satisfactorily to the reasoned opinion the matter may be referred to the Court.
An unnamed London-based employer has been hit with a £350,000 fine from The Pensions Regulator (TPR) for failing to fully comply with its pension duties.
XPS Pensions has enhanced its fiduciary management selection service in order to help trustees through initial selection and mandatory re-tendering.
One in five defined benefit (DB) schemes are in The Pension Regulator's (TPR) weakest two categories, analysis by Hymans Robertson has revealed.
State Street Global Advisors (SSGA) has been selected as the first index manager for the Asset Management Exchange's (AMX) passive funds.