EC released a legislative proposal to implement a Pan European Personal Pension Product (PEPP) in the EU, along with a recommendation on the tax treatment of personal pension products, including the PEPP. EIOPA welcomed this legislative proposal, which follows EIOPA’s Advice to create an attractive PEPP in the form of a second regime. The EC Vice President Valdis Dombrovskis said that PEPP is “an important milestone toward completing the Capital Markets Union” and “will also foster long-term investment in capital markets."
PEPPs will have the same standard features wherever they are sold in the EU and can be offered by a broad range of providers, such as insurance companies, banks, occupational pension funds, investment firms, and asset managers. They will complement existing state-based, occupational and national personal pensions, but not replace or harmonize national personal pension regimes. EC is also recommending that member states grant the same tax treatment to this product as to similar existing national products to ensure that the PEPP gets off to a flying start. The new products will also ultimately bolster the EC’s plan for a Capital Markets Union by helping to channel more savings to long-term investments in the EU.
This proposed regulation builds on almost 600 contributions to the EC's public consultation on personal pensions in October 2016. Many respondents said the current supply of personal pension products in the EU was insufficient. The proposal also took into account two reports from EIOPA in 2014 and 2016 and an external study by an external contractor. The PEPP proposal will now be discussed by the European Parliament and the Council. Once adopted, the regulation will enter into force 20 days after its publication in the Official Journal of the European Union.
Keywords: Europe, EC, EIOPA, PEPP, Insurance, Banking, Securities, Capital Markets Union, Pensions
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