08 March 2016

IPE: Commission mulls whether to continue developing personal pension product

Jung Duk Lichtenberger, deputy head of the Capital Markets Union (CMU) unit within Directorate-General for Financial Stability, Financial Services and Capital Markets Union, told delegates at Fleming’s CEE Pension Funds Conference in Prague that the Commission would launch a consultation on the subject after receiving EIOPA’s advice. “Among other things, we will look into which group of people might be needing what type of product,” he said.

He emphasised that any pan-European personal pension product (PEPP) product would have to be adjusted to demand and should be complementary to other pillars in the pension system. But he also cited the US as an example where more people were using personal pension plans instead of occupational schemes to ensure their own mobility and have control of their pension savings.

Manuela Zweimüller, head of regulation at EIOPA, pointed out that a PEPP could also be sold cross-border and argued that “all providers should go into this market” of personal pensions, currently dominated by insurers.

Apart from asset managers and banks, the “knowledge accumulated in IORPs can also help to provide a third-pillar product”, she said, while acknowledging that many pension fund providers are prohibited from offering products outside the second pillar.

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