What is PEPP?
The pan-European Personal Pension Product (PEPP) is a voluntary personal pension scheme that offers EU citizens a new option to save for retirement. The PEPP pension scheme is complementary to existing national pension regimes.
What are the key features of PEPP?
- 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
Where does PEPP fit in the pensions regime?
PEPP is a personal pension product (pillar three). As such, it is independent from existing state-based pensions (pillar one) and from occupational pension systems (pillar two).
Who can provide a PEPP?
PEPPs can be offered by a range of financial institutions:
- credit institutions
- insurance undertakings engaged in direct life insurance
- institutions for occupational retirement provision (IORPs) which are authorised and supervised to provide also personal pension products
- investment firms providing portfolio management
- investment companies or management companies
- EU alternative investment fund managers (EU AIFM)
What PEPP providers and products are currently available in the EU?
The legal basis for the offering of PEPP becomes applicable on 22 March 2022. As of this date, eligible providers can submit an application for registration of a PEPP to the relevant national competent authority. The authority then has three months to make a decision as to whether the PEPP meets the criteria and whether it can be registered or not.
EIOPA has carried out a survey to better understand the potential take-up of PEPP by eligible providers in February 2022. In total, 21 entities reported to EIOPA that they consider to offer a PEPP. Those entities were mainly asset managers and insurance undertakings.
This implies that it’s likely to assume that there will be PEPPs available soon, but it will take some more time. Check the EIOPA central register to have an overview of all PEPPs offered in the EU, to search for PEPPs which meet your demands, to analyse them and to compare them.
FAQs on PEPP for consumers
You are a consumer and you would like to learn more about PEPP?
FAQs on PEPP for professionals
You are a professional and you would like to learn more about PEPP?
What is EIOPA’s role in PEPP?
The PEPP Regulation empowers EIOPA to:
- Develop technical standards around reporting to the supervisors about PEPP providers and products to enable consistency and transparency
- Register new PEPPs in a central register. EIOPA will provide for a central database to get information on all PEPPs in Europe. Once registered, the providers can distribute their products in all European Union countries.
- Monitor the evolution of the market with strong monitoring powers to enable an efficient PEPP market.
- Issue a temporary ban or restriction of the marketing, distribution or sale of specific PEPPs within the whole EU, under certain conditions.
- Regulation 2019/1238 Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-European Personal Pension Product (PEPP) (Text with EEA relevance)
- Commission Delegated Regulation (EU) 2021/473 of 18 December 2020 supplementing Regulation (EU) 2019/1238 of the European Parliament and of the Council with regard to regulatory technical standards specifying the requirements on information documents, on the costs and fees included in the cost cap and on risk-mitigation techniques for the pan-European Personal Pension Product (Text with EEA relevance); C/2020/9073; OJ L 99, 22.3.2021, p. 1–33
- Commission Delegated Regulation (EU) 2021/895 of 24 February 2021 supplementing Regulation (EU) 2019/1238 of the European Parliament and of the Council with regard to product intervention (Text with EEA relevance); C/2021/1133; OJ L 197, 4.6.2021, p. 1–4
- Commission Delegated Regulation (EU) 2021/896 of 24 February 2021 supplementing Regulation (EU) 2019/1238 of the European Parliament and of the Council with regard to additional information for the purposes of the convergence of supervisory reporting (Text with EEA relevance); C/2021/1134; OJ L 197, 4.6.2021, p. 5–6
- Commission Implementing Regulation (EU) 2021/897 of 4 March 2021 laying down implementing technical standards for the application of Regulation (EU) 2019/1238 of the European Parliament and of the Council with regard to the format of supervisory reporting to the competent authorities and the cooperation and exchange of information between competent authorities and with the European Insurance and Occupational Pensions Authority (Text with EEA relevance); C/2021/1421; OJ L 197, 4.6.2021, p. 7–66
EIOPA’s proposal to the European Commission
Legal instruments and its technical advice:
- Regulatory Technical Standards
- Technical advice on supervisory reporting
- Technical advice on criteria for EIOPA’s product intervention powers
- Implementing Technical Standards
Other documents of the proposal:
- PEPP Impact assessment
- Report on consumer testing of PEPP information documents
- Description of EIOPA's stochastic model used for PEPP
- Letter from EIOPA to EC
- EIOPA's proposal in a nuthsell
Register of national laws, regulations and administrative provisions
The PEPP Regulation requires EIOPA to publish a single electronic register of links to the text of the national laws, regulations and administrative provisions governing the conditions related to the accumulation phase and the conditions related to the decumulation phase including, where applicable, information about additional procedures for applying for advantages and incentives set at national level.
Background: how PEPP came to life
Aiming to deliver adequate, safe and sustainable pensions to its citizens, the European Commission asked EIOPA in 2013 to draw out the potential of an EU single market for personal pension schemes outside the occupational pension framework. This work resulted in the publication of a preliminary report in 2014 Towards an EU single market for personal pensions.
Subsequently, the European Commission called EIOPA technical advice on the framework necessary to develop an EU single market for personal pension products (PPP) in 2014. In 2016, EIOPA submitted its advice recommending the creation of a standardised Pan-European Personal Pension Product (PEPP) Advice on the development of an EU Single Market for personal pension products (PPP), in the form of a complementary regime alongside national regimes. EIOPA proposed the PEPP as being an option to promote the Single Market and to strengthen the regulatory framework for the benefit of protection of consumers.
Following EIOPA’s advice, the European Commission published in 2017 a proposal for a regulation on a PEPP. The proposal was accompanied by a recommendation to the Member States on the tax treatment of personal pension products including the PEPP. The legislative proposal was discussed and further developed by the co-legislators.
The PEPP Regulation was published on 25 July 2019, with entry into force on 14 August 2019.
In August 2020, EIOPA delivered to the European Commission the draft Regulatory and Implementing Technical Standards and advice on Delegated Acts for the design and delivery of the PEPP.