16 May 2013

EIOPA publishes Discussion Paper on a possible EU single market for personal pension products

EIOPA welcomes the views of stakeholders on this issue and has therefore decided to phase its work as follows:

• Stage 1: Draft a Discussion paper in order to collect input from stakeholders
• Stage 2: Draft a Preliminary report outlining issues and options in order to receive a more specific request from COM
• Stage 3: Draft a Final Advice to COM

EIOPA’s Task Force on Personal Pensions (TFPP) was launched in February 2013. After brief initial analysis of issues related to the request of the COM, EIOPA publishes this discussion paper in order to provide the opportunity to all stakeholders to make early submissions on this work. The early nature of this discussion paper should be noted. EIOPA’s preference is to obtain the first views of stakeholders when our own approach is at a relatively early stage.

EIOPA, in line with the request from the COM, will provide advice on what legislative changes are needed in the areas of prudential law and the protection of personal pension plan holders (PPP holders) in order to create a single market for PPPs. This work is conducted in parallel with a separate initiative from the COM5 focusing on improving consumer protection in the area of third-pillar retirement products through voluntary codes coordinated at the EU level and possibly an EU certification scheme.

The passporting section briefly explains the main elements of the concept and discusses the main obstacles and challenges that currently preclude PPP providers from passporting their products to other MSs – namely certain prudential obstacles, tax law obstacles, and challenges arising from social and labour law.

While there do not seem to be major prudential obstacles for pure DC PPPs, the situation is more complicated with respect to DB products and DC with guarantees. Some aspects relevant for their cross-border provision are closely linked to MSs prudential regulation.

Tax law obstacles seem to have diminished to the extent that host Member States (MSs) cannot discriminate against foreign providers operating on the basis of the single European passport. However, differences in the tax regimes among MSs may still lead to double taxation of retirement capital.

The extent to which social and labour laws interact with 1st pillar bis systems poses challenges in Central and Eastern European countries in respect of the creation of a single market. EIOPA puts forward some proposals in this area.

The 2nd regime could serve as an alternative or parallel framework to passporting and thus help to develop the single market for PPPs. It should be designed in a way that accommodates the tax and possibly also other differences among MSs. It could enable transferability of accumulated capital and highly standardised product rules ensuring a high level of protection for PPP holders.

The consultation is open until 16 August 2013.

EIOPA-consultation webpage

Full Consultation Paper

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