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In a statement, the association welcomed the Commission’s proposal for an EU regulation creating a PEPP, but said that some amendments were needed if the initiative were to be successful.
In a post on Twitter, Falco Valkenburg, chairperson of the pensions committee of the AAE, said that the AAE was supportive of a “courageous” PEPP proposal, but had some suggestions.
In its statement the AAE focused its comments on the requirement for a PEPP default option to protect at least the amount a saver invests.
Philip Shier, immediate past chair of the AAE, said that the inclusion of the capital protection requirement was surprising.
“It seems to have gained traction with the Commission,” he said. “Whether it will survive the parliament discussions we shall see.”
The AAE gave several reasons for opposing the capital protection requirement, but Shier said the main reason for its view was that it didn’t consider it “in the best interests of the consumer”.
The association said such a protection requirement would have little value for a consumer with a saving/investment period of 30-40 years.
Shier said: “You wouldn’t expect in the vast majority of cases that the guarantee would ever apply, but by requiring it the provider has to hold additional reserves.”
The requirement could limit the field of institutions wishing to become PEPP providers, according to the AAE.