The European Commission announced on 29 June 2017 its intention to create a new class of pension product with the aim of providing European consumers with more choice when saving for retirement. This is an interesting development especially when you consider the recent proposals from the Pensions Authority on the reform and simplification of private pensions in Ireland.
The European Commission see the key benefits as:
• PEPP savers will have more choice from a wide range of PEPP providers and benefit from greater competition
• Consumers will benefit from strong information requirements and distribution rules by those providers authorised by the European Insurance and Occupational Pensions Authority (EIOPA) to provide the product
• A high level of consumer protection by using a simple default investment option
• PEPP savers will be able to switch providers (domestically and cross-border) at a capped cost every 5 years
• Portability, where a saver can continue to contribute to their PEPP when moving to another EU Member State
It also intends to provide for PEPP savers living in several Member States over the lifetime of a PEPP contract to accumulate funds in multiple compartments, each complying with the national requirements of the Member State in which they have accumulated funds. The PEPP proposal will now be discussed by the European Parliament and the Council.
For further information please contact John O’Connell.