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PensionsEurope believes that while social security and workplace pensions, often supported by a supportive tax treatment, do and should continue to provide the bulk of the retirement income, voluntary personal pensions (including PEPP) can be needed and useful, especially to provide pensions for those who don’t have access to adequate workplace pensions and as a further way to improve retirement resources and contribute to securing the future adequacy and sustainability of pensions.
It can also prove to be useful when there is poor security for existing personal pension products or when existing products are not attractive enough. PensionsEurope stresses the importance to adequately define the scope of voluntary personal pensions and clearly differentiate them from workplace pensions.
PensionsEurope also agrees with EIOPA that a voluntary 2nd regime, which gives the option to national Member States to implement the PEPP-regime in their legislations, is better than harmonization. We consider that the 2nd regime is the preferred option, our answers below are based on that and hence will mostly refer directly to the PEPP, although we do some comments on the PPP too.
It is important to test the demand and also to elaborate further on the reasons why a PEPP as a 2nd regime would be useful especially in the Member States where the voluntary personal pensions are already well regulated and developed. It is also necessary to reflect upon what elements are left to national legislation, what elements are tackled at the EU level and how they could be implemented.
In particular, PensionsEurope agrees with EIOPA’s conclusion that, given the diversity of requirements and the fact that this area is beyond its fields of competence, when developing the PEPP proposal, a non-discriminatory approach vis-à-vis PPPs sold in the individual national markets should be applied in the field of taxation1, in order to avoid regulatory arbitrage. Importantly, it is up to the Member States to decide on the tax framework for supplementary pensions – EU institutions or agencies should not stipulate how the PEPP is treated tax-wise compared to other pension products and systems.
Finally, PensionsEurope is pleased to see that EIOPA seems to have embraced the idea that only entities authorized under a relevant EU legislation should be entitled to offer PEPPs.
Regarding the harmonization of existing PPPs, PE is quite skeptical about the feasibility. Where PPPs are nowadays provided by EU-regulated insititutions, relevant Directives or Regulations already deal with the major issues such as governance, conflict of interest or consumer protection. Where PPPs are not provided by EU-regulated institutions, these regulatory gaps should be closed.