The European Parliament’s plenary session has just approved the trilogue agreement on the pan-European Personal Pension Product regulation, also known as the PEPP.
This is seen as a key milestone in the future of the European single market in the area of personal pensions.
The PEPP enables EU citizens to access high quality retirement savings plans, complementary to existing public and occupational pensions.
The PEPP Regulation is designed to ensure consumer protection, full transparency of costs and ESG policy, mandatory advice, and right of switching. It also gives product intervention powers to the European Insurance and Occupational Pensions Authority (EIOPA) and national competent authorities (NCAs).
The European Fund and Asset Management Association (EFAMA) says the tax treatment applicable to the PEPP will be a crucial element for its promotion and success, and is calling on member states to grant the same tax relief to the PEPP as to the most favourable relief granted to national pension products.
PensionsEurope secretary general and CEO Matti Leppälä says: “Saving for a pension in a good quality product leads to good outcomes and PEPPs can be a valuable tool to complement the pension income of many EU citizens. The EU-label on PEPPs will benefit both consumers, guaranteeing strong protection, and providers, introducing a framework for personal pensions that allows them to provide PEPPs across the EU.
PEPP is an important step on the road to addressing pension gaps and demographic challenges, and a relevant milestone in completing the Capital Markets Union. Further technical measures complementing the PEPP Regulation have to be appropriately designed to allow all different PEPP providers to build on the own strengths and business models. Only then will PEPP support pension savings and long-term investments across the EU.”
EFAMA director general Tanguy van de Werve,says: “Today is an important landmark for everyone. EFAMA and the asset management industry have been strong supporters of the PEPP from day one. Today the path has been paved for the development of personal pension products with a European label. The PEPP will soon become a reality for European consumers: it will promote competition, widen consumers’ choice and encourage individuals to save more for retirement, which is one the biggest societal challenges the EU will be facing in the coming years and decades.”