EIOPA Consults on Approach for Regulating Key Aspects of PEPP
EIOPA launched a consultation on the proposed approaches and considerations for its technical advice and its implementing and regulatory technical standards, as mandated by the Pan-European Personal Pension Product (PEPP) Regulation. The consultation paper sets out EIOPA's current stance to approach the regulation of key aspects of the PEPP, underpinning the idea of establishing a simple, safe, and cost-efficient savings product. The consultation paper presents the objective and the policy approach to draft technical advice and technical standards, along with an explanatory text and a technical annex, where relevant. The consultation ends on March 02, 2020.
The corresponding analysis of the expected impact from key options in the proposed policy is covered under Annex I (Impact Assessment). In developing its proposals, EIOPA sought input from the supervisory community of the insurance and pension sectors and the other ESAs and conducted an active dialog with its stakeholder groups and the Expert Practitioner Panel on PEPP. The resulting key considerations include the following:
- PEPP Key Information Documents (KIDs)—Pre-contractual and annual information on the PEPP and its investment options have to be highly standardized to allow for comparability between PEPPs and for the consumer to track the performance of the chosen PEPP. The information needs to be relevant and tailored to the pension objective of the PEPP. The proposals are built on the experience with packaged retail investment and insurance-based products (PRIIPs) and the Directive on the activities and supervision of institutions for occupational retirement provision (IORP 2), yet tailored to the specificities of PEPP, in particular its long-term nature, while making the PEPP ready for digitalization.
- Cost Cap of the Basic PEPP—The cost-efficiency of the Basic PEPP is enforced by the introduction of a cost cap. In line with the policy objective of PEPP, an all-inclusive approach is suggested, while ensuring a level playing field among providers offering different features and in particular a guarantee on the capital invested.
- Risk-Mitigation Techniques—It is necessary to set out the principle objectives for the risk-mitigation techniques to foster investment strategies leading to better pension outcomes. Clear and auditable criteria are needed to ensure the effectiveness of the chosen risk-mitigation technique.
- Supervisory Reporting and Cooperation Between National Competent Authorities and EIOPA—Enabling an efficient functioning of the PEPP market requires close monitoring and effective product supervision both from a home and host perspective, which is only possible with regular information exchange on PEPP business.
- Product Intervention Powers of EIOPA—Relevant criteria, tailored to the PEPP, have been developed, building on past experience with product intervention powers at the level of the ESAs.
Related Links
Comment Due Date: March 02, 2020
Keywords: Europe, EU, Insurance, Pensions, PEPP Regulation, PEPP, KID, IORP 2, PRIIPs, Reporting, EIOPA
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Related Articles
EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
EBA Publishes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
EBA Proposes Standards to Support Secondary NPL Markets
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
EBA Issues Standards for Crowdfunding Service Providers Under ECSPR
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.
EU to Amend Credit Risk Adjustment Rules; ESAs Submit Queries on SFDR
The European Council published a draft Commission Delegated Regulation to amend the regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Securities and Markets Authority (ESMA) published a paper that examines the systemic risk posed by increasing use of cloud services, along with the potential policy options to mitigate this risk.
MAS Amends Notice 635 and Issues Second Proposal on Green Taxonomy
The Monetary Authority of Singapore (MAS) published amendments to Notice 635, which sets out requirements that a bank in Singapore has to comply with when granting an unsecured non-card credit facility to individuals.
EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.