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Thursday 16 August 2018


Spring Conference

PEPP could be available across Europe by 2019

Written by Talya Misiri

The proposed Pan-European Pension Product (PEPP) could be available across Europe by 2019, it has been suggested.

It is expected that the PEPP will be passed through a legislative process and approved by the European Council and European Parliament by the end of 2018, with an expected launch in 2019.

According to The Irish Times, the newly elected lead negotiator for the European People’s Party Brian Hayes said that the PEPP “has a real opportunity to improve all our national pension systems in the EU… It’s the product for the new mobile workforce”.

Proposed by the European Commission in June , the product would allow pension savers in the EU to seek portable and possibly cheaper pension products across the European Union. It has been confirmed that the PEPP will be accessible for all member states and will have the same features across the Union.

It is hoped the introduction of a PEPP will bring more choice to savers, from a wide range of PEPP providers and benefit from greater competition. Savers will be able to switch providers, both domestically and cross border, every five years, at a capped cost. The PEPP will portable between member states, i.e. PEPP savers will be able to continue contributing to their PEPP when moving to another member state.

With transparent fees and charges, the PEPP will also have the same tax treatment as existing pensions in Ireland, meaning consumers will enjoy tax relief of 20 or 40 per cent depending on their marginal rate, The Irish Times noted.

It has been suggested that in order to meet the tight time-frame, tax relief should be consistent throughout Europe, however, this could prove to be problematic.

“The elephant in the room is the fact that the level of private pension cover across Europe is so abysmal,” Hayes added.

Furthermore, The Irish Times quoted Hayes’ suggestion that the PEPP may be an eligible product for Ireland’s auto-enrolment initiative that aims to enrol all employees into a workplace pension by 2021.

While it is still uncertain whether Britain will be included in the product due to its decision to leave the union, Hayes said: “there is no reason why the British can’t sign up to this.”

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