A Comfortable Retirement

At 41, Dagmar Meyer is hardly into old age, but she’s already thinking ahead about collecting her pension. That’s because she’s in a predicament that many European scientists share: Her pension isn’t mobile. She’s worked in three different countries over the years, including her native Germany, and has paid into various public and private pension schemes. “When I retire, I’m going to have to go around to many places with my hat in hand to collect a little bit here and a little bit there,” she laments.

Although the European Union (E.U.) has made it possible for scientists to cross borders for work almost seamlessly, scientists can be penalized for that mobility when they retire. At fault is the lack of consistent laws regarding pensions across countries: Some don’t allow people who take positions outside of their native countries to pay into the system during years spent abroad, and others even penalize them for leaving by cutting their pension payouts drastically. Even when scientists are allowed to pay into pension schemes in the countries in which they work, keeping track of all of them can be a bureaucratic nightmare. Communication among pension agencies is slow and sometimes nonexistent. A retired scientist might have to collect funds from several countries.

These issues were among those discussed at a 2-day workshop in June sponsored by Germany’s Hochschulrektorenkonferenz (German Rectors’ Conference), a voluntary association of public German universities and other higher education institutions. Workshop participants proffered more gripes than solutions. Still, the workshop brought together for the first time many of the major players to formally discuss the issue, and workshop participants were able to pave a path toward improvement.

Legal Loopholes

Most everyone agrees that in science, mobility is an asset. Working in other countries increases exposure to new ideas. It also increases institutions’ international recognition, promotes competition, and improves the quality of science. “Mobility is a goal to which we all ascribe,” Ralph Alexander Lorz, state secretary in the ministry for science and arts of the German state of Hesse, said at the workshop. “It’s high time to clear the obstacles.”

Germany is especially tough on retired scientists who have worked abroad. Germany’s university professors are considered “civil servants,” a status that gives them more rights than regular public employees. But those benefits turn into losses if a scientist takes a position anywhere outside of Germany. Pensions for civil servants count years that employees spend in military service, studying for doctoral degrees, and working in unpaid lecturer positions and unpaid apprenticeships as “working years.” But the law states that if a civil servant quits civil service and accepts a job outside of Germany, these years are lost. Moreover, there is a financial penalty for not remaining a civil servant until a scientist retires. For a scientist at the highest university professor level, taking a job abroad could cut his or her pension by €4000 or more per month.

Making matters worse, a German scientist is eligible for a pension payout from a German public university or research center only if he or she has made pension contributions for at least 5 years. As long as a researcher remains within the E.U., any number of years worked count toward the 5-year vesting period in the German statutory system. But if a researcher accepts a job outside the E.U., the years do not count toward the vesting period. This is particularly hard on young German scientists who often don’t finish their studies until their mid-30s and move around frequently within and outside the E.U. before landing permanent positions.

Nevertheless, the difference between German and Dutch policies highlights the crux of the problem: Laws remain inconsistent among E.U. member states, which makes transferring funds among them difficult. One solution proposed at the meeting would be a pan-European fund into which researchers could pay to supplement pension schemes in their home countries. The fund would be administered and managed by the private sector and, as in pension schemes that exist for corporate employees, scientists would be able to pay into national branches of the same cross-border fund regardless of where they work. To encourage scientists to pay into the scheme, tax-saving incentives could be offered.

That may seem like an arduous task, but the legal framework enabling such a fund already exists at the E.U. level within the directive on the activities of institutions for occupational retirement provision of 2003. “We’d like to make good use of existing legislation,” says Massimo Serpieri, policy coordinator in the directorate general for research of the European Commission. To that end, the European Commission plans to launch a feasibility study of such a fund.

Lack of information about pension policies was another bugaboo raised at the workshop. Although some countries have set up E.U.-funded online “Mobility Centres” that provide information and advice on pensions, often the information is not specific enough, workshop participants said. Moreover, many young scientists don’t even know the sites exist.

To better inform early-career scientists about pension schemes, Christiane Gaehtgens, secretary general of the Hochschulrektorenkonferenz, called on similar agencies in member states to put pressure on universities to do a better job communicating and disseminating information on pension schemes.

Reforms in the Works

None of these measures will help scientists like Meyer. She now works in Ireland as an adviser for the Marie Curie Actions program, which, as it happens, is aimed at improving scientific mobility within the E.U. She is contributing to a private pension fund, but this pension isn’t transferable to Germany because of differing tax laws. Moreover, she discovered that tax-deductible contributions that she made into a German supplemental pension fund she enrolled in don’t apply to people who leave the country. In other words, not only are any future contributions not tax deductible as long as she lives abroad, she might have to pay back taxes on all contributions she has made so far.

Meyer hopes that the laws will be streamlined by the time she retires. Last year, the E.U. sued Germany, arguing that the supplemental pension fund’s policy of having to pay back taxes on deductible contributions when a person takes a job abroad amounts to discrimination. Germany is also moving toward a different tax scheme on pension contributions that will bring the country more in line with other E.U. countries. Once the tax schemes are more harmonious, it should be easier to transfer funds among countries, Meyer says.

And an attractive pension would help to draw the best and brightest scientists to Europe and present one more way that the continent could compete for talent, said Gaehtgens: “It would really legitimize the idea of a true European labor market for scientists.”

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