EU recognition of role of personal pensions in closing savings gap positive, but whether PEPP will increase pension savings unclear

Sunday, 7 April 2019

EU recognition of role of personal pensions in closing savings gap positive, but whether PEPP will increase pension savings unclear



In response to the adoption today of the Regulation introducing a pan-European personal pension product (PEPP) by the European Parliament, Nicolas Jeanmart, head of personal insurance, general insurance & macroeconomics of Insurance Europe, commented:
“By developing the PEPP, the EU has taken a step towards creating a regulatory environment that recognises the importance of personal pensions and the key role they can play in our society. In a landscape increasingly challenged by rapidly ageing populations, it is crucial that policymakers acknowledge the potential of personal pensions in increasing pension savings.
“It is too early to predict whether consumers will be interested in purchasing a PEPP, so its impact on individual pension savings’ levels across Europe is not yet known. A decisive factor will undoubtedly be the Level II technical measures where many key product features will be decided. That is why the work of the European Insurance and Occupational Pensions Authority (EIOPA) throughout the coming year will be crucial in addressing the remaining open questions, and we stand ready to contribute.
“For example, when defining risk mitigation techniques, it is very important to ensure that the money invested by savers is equally protected irrespective of the type of PEPP provider. It is also vital that capital requirements accurately reflect the risks related to long-term savings products and do not exaggerate them; otherwise PEPPs will be unnecessarily expensive or limited in terms of the guarantees that can be offered to protect customers’ retirement savings.”

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