citizens will have more retirement plan options to choose from in the future.
Since 22 March 2022, the "Regulation on a Pan-European Personal Pension
Product" (PEPP) also enables personal pension plan across borders, thus
complementing the national pension systems. At the European level, financial
companies and the economy also benefit from this.
European single market for personal pensions
PEPP regulation is part of an action plan of the European Commission
to strengthen the capital markets union. It is considered one of the most
important measures in this context – PEPP creates a European
single market for personal pension plan. In this way, the EU is responding both
to the changing demographic structure and to modern forms of work and
digitisation: For example, the still obligatory counselling of providers can be
carried out with the help of a fully or partially automated system.
This not only lowers barriers to entry,
but also reduces costs, which in turn benefits consumers. In addition, PEPP
should help to channel savings into long-term investments, thus also boosting
growth in the EU.
Financial companies can apply for authorisation since March
Personal pension plan, which is one of
the three pillars of the pension system in Germany, for example, alongside the
statutory and occupational pensions, has so far been limited to the national
level. Since 22 March 2022, the regulation on a "Pan-European Personal
Pension Product", also called "European Pension", which was
already adopted in 2019, will now be applied in practice in the EU. This makes it possible for financial
companies to apply for authorisation and distribute PEPP across borders.
Extended offer for savers
Pension savers thus have a wider choice
– they are no longer limited to their respective country when it comes to
personal pension plan, but can draw on providers from the entire European
Union. At the same time, they benefit from the advantages of stronger
competition and a more transparent and flexible product range. Consumer
protection is strengthened.
When moving within the European Union,
savers can simply "take" the European pension annuity agreement with
them, which benefits the younger generation, in particular. However, the tax
treatment of financial products continues to be national. PEPP is not
automatically accompanied by tax incentives or state subsidies. It is thus not
clear yet to what extent PEPP can contribute to making personal pension plans