The new rules, which still need to be formally approved by the EU Council, will help to remove current obstacles to free movement, such as the requirement for very long periods of employment to acquire these rights or the risk of the rights being lost when leaving a pension scheme.

While current EU rules ensure that workers moving to another EU country do not lose their statutory pension rights, ie, those provided by the state, they do not protect supplementary pension schemes, financed or co-financed by employers.

This means that under the current set-up people who move between member states risk losing entitlements to occupational or 'second pillar' pensions built up over a period that is not deemed long enough by the state to which they move.

The new legislation will include a ‘vesting period’ which must not exceed three years which defines  the period of active membership of a scheme needed for a person to keep supplementary pension entitlements.

The draft text was tabled by the European Commission in 2005 and revised in 2007, but the legislation was blocked in the Council for six years, due to differences among member states' pension schemes and the unanimous vote requirement.

Negotiations resumed following the Lisbon Treaty which replaced the unanimous vote requirement with a qualified majority vote requirement. The current Directive differs from the original proposal as it no longer includes the right to have one's pension assets transferred to another scheme.

EU commissioner for employment László Andor said: ‘Workers need to rely more and more on supplementary pensions across Europe. It is vital to ensure that those who move across borders are not penalised with regard to their supplementary pension rights. This Directive complements the protection of state pension rights by ensuring that occupational pension rights are guaranteed after a limited period and that they are preserved when people move to another member state.’