Regulation 2019/1238 is the legal foundation for the establishment of Pan-European Personal Pension Products. It lays down uniform rules on registering, manufacturing, distributing and supervising personal pension products that are distributed in the European Union (EU) under the PEPP designation.
The PEPP is a voluntary personal pension scheme that will complement existing public and occupational pension systems, as well as national private pension schemes. The regulation aims to give savers more choice and provide them with more competitive personal pension products when saving for retirement, while enjoying strong consumer protection.
Commission Recommendation 29.6.2017 on the tax treatment of personal pension products ... C (2017) 4393 final, which encourages Member States to grant the same tax relief as their own Personal Pension Products.
Everyone: employed, part-time, full-time self-employed or unemployed can save with a PEPP. It is particularly interesting for mobile workers who move between different EU countries.
PEPP will provide the savers more choice and more competitive products.
- Possibility to switch providers every five years, at capped costs
- Mobility: savers will be able to continue saving in the same product even when they change residence in the EU
- Full transparency on the product, including on costs and fees –relevant information will be disclosed via a simple Key Information Document (KID) supplied before the purchase, complemented by a personalised pension benefits statement during the product lifetime
- Affordable default investment option (Basic PEPP): costs capped at 1% of the accumulated capital per annum
- Protection of the capital invested: the Basic PEPP will safeguard the consumers’ invested capital
A broad range of financial providers can offer PEPPs: insurers, occupational pension funds, asset managers, banks, etc. Furthermore, they will be able to sell PEPPs online and to distribute them across the EU with one single product registration.
After a decision for registration has been taken by the competent authorities, they should notify the European Insurance and Occupational Pensions Authority (EIOPA) accordingly to register the PEPP provider and the PEPP in the central public register. Such registration should be valid across the entire Union. In order to ensure effective supervision of compliance with the uniform requirements laid down in this Regulation, any subsequent modifications to the information and documents provided in the registration procedure should be immediately notified to the competent authorities and to EIOPA, where applicable.
A central public register should be created by EIOPA to contain information about PEPPs that have been registered and could be provided and distributed in the Union, as well as about the PEPP providers and a list of Member States in which the PEPP is offered.
These should be available by the end of this year and they will be an interesting development.
