Public pension systems and distortions of intra-EU mobility: the Lodge Test

In this paper, we analyse how national public pension systems can distort intra-EU movements of workers despite the existing totalization/proratization agreement. As a benchmark test, we propose the ‘Lodge Test’ of mobility neutrality: Two identical individuals who swap countries and jobs should receive the same pension claims in either of the two pension systems compared to a situation where each would have stayed at home. Using the Lodge Test, we identify those features of national pension formulae that are systematically mobility distorting and discuss possible remedies.