New Pan-European Personal Pension Product (PEPP)
13 February, 2019
The European Union institutions have reached a political agreement to create a pan-European Personal Pension Product (PEPP): a new individual pension scheme which aims to provide EU citizens with a new form of retirement savings, looking to meet the requirements of an aging population with an increasing life expectancy. The rules and characteristics to which the PEPP must comply shall be directly applicable to the Member States through a European Regulation whose draft was published on 08 February.
The harmonization of the PEPP’s conditions, regardless of the Member State where it is commercialized and regardless of the PEPP providers (that can be, for instance, an insurance undertaking, a credit institution, an investment firm or a pension fund), underlies the draft regulation.
Moreover, it aims to boost the EU pension market in order to foster the liquidity of the PEPP providers, resulting in lower costs for consumers.
The draft regulation emphasizes PEPP’s commercialization rules, namely through the creation of narrower information duties for the providers and the creation of several risk profiles from which consumers may opt. It also allows consumers to change from a PEPP provider to another after a maximum period of five years (in order to meet the growing mobility requirements of the European population).
Nuno Nogueira Pinto