A potential occupational pan-European personal pension product (PEPP) must be defined as a pillar two product to ensure it receives preferential tax treatment in member states, CBBA-Europe secretary general, Francesco Briganti, has warned.

Speaking on a panel on the revision of European pension legislation, the PEPP and IORP II, at the CBBA-Europe Annual Conference in Brussels yesterday, 9 October, Briganti welcomed the possible introduction of an occupational PEPP, which he believes is necessary if the EU is to pursue an auto-enrolment policy.

“When we talk a lot about auto-enrolment (AE), when we talk about AE, we also have to think about employers. If the PEPP is not extended to employers, it will be quite difficult. We are very much in favour of the creation of an occupational PEPP.”

However, he stressed that an occupational PEPP should be described as an occupational product. He explained that if there are restrictions on employer contributions, it could still be treated as a third pillar product.

He warned: “We know that in many member states the third pillar is treated in a very different way compared to occupational pensions.

"Occupational pensions are much better treated, fiscally speaking. You can imagine that if you can offer a product that is somehow occupational but still considered as an individual product, the tax advantages would not be there.”

Briganti also speculated over the forthcoming revised PEPP regulation from the EU expected to be published in mid-November, which he understands will be simplified.

One of the main barriers highlighted by those in the industry, the 1 per cent fee cap, is also expected to be either removed or adapted, and the need for mandatory advice, which Briganti described as a barrier to the fee cap, may be removed.

He also agreed with the European Insurance and Occupational Pensions Authority’s (EIOPA) take that renaming the PEPP to Europension “sounds better for the basic PEPP”.

In addition, Briganti believes it is likely that the obligation to create sub accounts in other member states will be removed and there will be adapted guarantees on the protection of capital.

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