Key to PEOP success is ‘market appetite’ – CBBA-Europe

The key to making a Pan-European Occupational Pension (PEOP) product a reality is “market appetite”, according to Cross Border Benefits Alliance-Europe (CBBA-Europe) secretary-general Francesco Briganti.

Speaking at a webinar on pan-European and cross-border pensions, hosted by the American Benefits Council (ABC) and CBBA-Europe on Tuesday, 17 November, Briganti shared details of his organisation’s project on pushing for the creation of a PEOP.

He stated that a personal pension level, the market will soon have the Pan-European Personal Pension (PEPP) product, in which the European Union (EU) regulates all of its features.

“It is much easier to operate under the same conditions in the member states across the European Union because it is a federal product,” he said.

However, he said that current cross-border IORPS have to comply with at least two jurisdictions – the country where the pension fund is based and also where the company and employees are based.

“It works sometimes, but it can also be quite complicated. Moreover, cross-border occupational pensions do not provide for portability, unlike PEPPs, which are always portable,” Briganti stated. Therefore, CBBA-Europe is working on a project to develop a PEOP.

“A PEOP would again act like the PEPP, as a federal product. It would work on a defined contribution basis, it would be fully portable across Europe and most importantly it would act under the same conditions across the different EU jurisdictions.”

He said such a product would be able to act “universally in a harmonised way across European member states”.

The PEOP could be set up by one employer, such as a big corporate with different national branches. However, it could also be a multi-employer PEOP, set up by providers such as insurance companies, asset managers and pension funds, which would allow it to be used by small and medium enterprises.

“You can see the value of economies of scale because it will work under the same conditions across Europe,” Briganti said. CBBA-Europe has already composed a reflection paper, in the form of a legal study, on the PEOP. Briganti added that the EU is already aware of the project.

“The key is to get the market appetite; the EU is really looking for the support and the proof that the market stakeholders, the big companies, would like to have this product.”

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