pepp

PEPP stands for Pan-European Personal Pension Product. It is a voluntary personal pension designed to be portable across EU member states, intended to supplement national pension schemes and to broaden retirement savings opportunities for EU residents. The PEPP framework aims to provide a standardized, cross-border product that savers can use regardless of where they live within the European Union.

Regulation and governance: The PEPP Regulation (Regulation (EU) 2019/1238) establishes rules for the design, distribution, governance, and disclosure of PEPPs. It requires standardised information for consumers, transparent charging structures, and clear risk disclosures. PEPPs may be offered by insurance undertakings and other providers authorized to operate in the EU, with cross-border distribution facilitated by a pan-European framework. The European Insurance and Occupational Pensions Authority (EIOPA) provides guidance and coordinates supervisory expectations to promote consistent application of the rules across member states.

Design and features: A PEPP accumulates capital through regular contributions and offers a range of investment options, including an automatically managed default option tailored to age or risk. The product is designed to be transparent, with standardized disclosures on costs, risks, and projected retirement benefits. Depending on the product, PEPPs may include guarantees, but such guarantees can increase costs and complexity.

Portability and scope: A key objective of PEPP is portability; a holder can continue saving and manage benefits when moving to another EU country, subject to applicable tax and pension rules in the destination state. The regulation seeks to ensure that PEPPs are comparable with other retirement savings options and accessible to a broad range of savers.

Impact and status: Since its introduction, several PEPPs have been approved for sale in multiple EU markets. Market uptake has been gradual, with ongoing work to improve awareness, encourage cross-border sales, and address cost and complexity concerns.