On 4 April, the European Parliament endorsed legislation, negotiated between EU Member States and the European Parliament establishing a complementary, voluntary and individual Pan-European Personal Pension Product (PEPP).
This product will give European citizens more choice when saving for retirement by providing pension providers with the tools they need to offer a simple and innovative pan-European personal pension product, which will be particularly appealing to EU citizens who work in different jurisdictions within the EU over their lifetime. It will also provide an option for people in countries that lack a robust pension system and will actually help solve a savings imbalance in the EU.
The hard won compromises of rapporteur and ALDE Vice-President Sophie in ‘t Veld were key to clinching a deal on this file. The Parliament successfully added higher protections relating to consumer protection, portability, collective redress measures and the idea of a ‘basic’ PEPP with very safe investment options, available for any EU citizens to invest in.
Sophie in ‘t Veld MEP commented after the adoption of the legislation today;
"The debate around this topic was not always well informed, but I am delighted with today’s result and the deal, which contains very strong consumer protection rules while opening opportunities for savers, which is particularly useful for people in countries that lack a robust pension system."
"I hope that European consumers will soon benefit from more choice when saving for retirement. Citizens will also be able to relocate across borders without the need to change their pension, which will be a big step forward. The agreement of this legislation provides the foundation for the building of a true pan-European market for personal pension products, whilst strengthening the capital markets union."
"Pension markets are evolving quickly, whether we like it or not, as global players from the US or China are dominating digital markets, and keen to get a share of Europe's pension savings. The case for an EU-wide framework is clear."
"The PEPP is a truly European product and we have ensured it adheres to EU standards and features, overseen by the EIOPA. The fee cap we secured is a real guarantee for consumers; this new product will allow people to obtain a safe pension product, with a European safety label. The PEPP does not at all touch the first pillar of pensions and I call on national Governments to do more to reform national pension systems."