Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on a pan-European Personal Pension Product (PEPP)
Date: 2017-06-29
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: EU Member State, capital market, consumer information, investment company, investment promotion, regulation of investments, single market, supplementary pension

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 29.6.2017  COM(2017) 343 final 2017/0143 (COD)   Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on a pan-European Personal Pension Product (PEPP) (Text with EEA relevance) {SWD(2017) 243 final} {SWD(2017) 244 final}  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1. 

Reasons for and objectives of the proposal 

Across  the  European  Union  (EU),  individuals  who  wish  to  supplement  their  pensions  are 
saving  for  retirement  in  many  different  ways,  for  example  by  investing  in  real  estate,  life 
insurance  and  other  long-term  investment  products.  Personal  pension  products  are  another 
option.  However,  personal  pension  markets  are  unequally  developed  and  personal  pension 
products are unequally affordable across the European Union (EU). People who wish to save 
more for retirement need a greater choice of suitable personal pension products that rely on 
capital markets-based investments. An additional public policy challenge is the need to ensure 
the long-term sufficiency of retirement income from a combination of state, occupational and 
personal pensions.  

fragmentation  prevents  personal  pension  providers 

Market 
risk 
diversification, innovation and economies of scale. This reduces choice and attractiveness and 
leads to increased costs for pension savers. It also contributes to a lack of liquidity and depth 
in the capital markets compared with other jurisdictions such as the United States of America, 
where  pension  funds  play  a  bigger  role  as  institutional  investors.  Moreover,  some  existing 
personal  pension  products  have  insufficient  features1  and  their  availability  and  cross-border 
portability is limited, with hardly any cross-border activity by suppliers or savers.  

from  maximising 

An EU initiative on personal pensions could therefore complement the current divergent rules 
at  EU  and  national  level  by  adding  a  pan-European  framework  for  pension,  for  individuals 
who wish to use this additional saving option. This framework will not replace or harmonise 
existing  national  personal  pension  schemes.  It  will  offer  individuals  a  new  voluntary 
framework for saving by ensuring sufficient consumer protection with regard to the essential 
features  of  the  product.  At  the  same  time,  the  framework  will  be  flexible  enough  to  enable 
different providers to tailor products to suit their business model. It will encourage providers 
to  invest  in  a  sustainable  manner  in  the  real  economy  over  the  long  term,  particularly  in 
infrastructure projects and corporates, thus matching the long-term liabilities under the PEPP. 

Overall, the proposal will create a quality label for EU personal pension products and increase 
trust  among  consumers.  It  will  lead  to  consumers  having  greater  choice  between  providers 
and  ensure  a  level  playing  field  for  providers.  The  proposal  may  also  contribute  to  the 
creation  of  a  single  market  for  personal  pensions  and  encourage  competition  between 
providers to the benefit of consumers.  
The Commission’s Action Plan on Capital Markets Union of September 20152 stated that, ‘an 
“opt  in”  European  Personal  Pension  could  provide  a  regulatory  template,  based  on  an 
appropriate  level  of  consumer  protection,  that  pension  providers  could  elect  to  use  when 
offering products across the EU. A larger, “third pillar” European pension market would also 
support the supply of funds for institutional investors and investment into the real economy’. 
In  the  action  plan,  the  Commission  also  announced  that  it will  ‘assess  the  case  for  a  policy 
framework  to  establish  a  successful  European  market  for  simple,  efficient  and  competitive 
personal pensions, and determine whether EU legislation is required to underpin this market’.    

1 

2 

This concerns for instance distribution, investment policy, provider switching, cross-border provision, 
or  portability.  For  instance,  some  existing  personal  pension  products  do  not  allow  savers  to  switch 
providers. 
COM(2015) 468 final, p.19. 

EN 

2 

   EN 

 
                                                 
 
The European Parliament, in its Resolution of 19 January 20163, expressed concern about the 
lack of available and attractive risk-appropriate (long-term) investments and cost-efficient and 
suitable savings  products  for  consumers.  While  reiterating the  need  for diversity  in investor 
and  consumer  choices,  the  European  Parliament  stressed  that  ‘an  environment  must  be 
fostered that stimulates financial product innovation, creating more diversity and benefits for 
the  real  economy  and  providing  enhanced  incentives  for  investments,  and  that  may  also 
contribute to the delivery of adequate, safe and sustainable pensions, such as, for example, the 
development of a pan-European Pension Product (PEPP), with a simple transparent design’. 

In June 2016, the European Council called for ‘swift and determined progress to ensure easier 
access  to  finance  for  business  and  to  support  investment  in  the  real  economy  by  moving 
forward with the Capital Markets Union agenda4.’ 
In September 2016, in its Communication Capital Markets Union — Accelerating Reform5, in 
light  of the strong support expressed by the European Parliament,  Council  and stakeholders 
for  the  Capital  Markets  Union  action  plan,  that  it  will  ‘consider  proposals  for  a  simple, 
efficient and competitive EU personal pension product’.  

Subsequently,  in  its  Communication  Mid-term  Review  of  the  Capital  Markets  Union  Action 
Plan, the Commission announced ‘a legislative proposal on a pan-European Personal Pension 
Product  (PEPP)  by  end  June  2017.  This  will  lay  the  foundations  for  a  safer,  more 
cost-efficient  and  transparent  market  in  affordable  and  voluntary  personal  pension  savings 
that  can  be  managed  on  a  pan-European  scale.  It  will  meet  the  needs  of  people  wishing  to 
enhance  the  adequacy  of  their  retirement  savings,  address  the  demographical  challenge, 
complement  the  existing  pension  products  and  schemes,  and  support  the  cost-efficiency  of 
personal  pensions  by  offering  good  opportunities  for  long-term  investment  of  pension 
savings6’. 

This proposal for a PEPP framework comprises a complementary voluntary scheme alongside 
national regimes, enabling providers to create personal pension products on a pan-European 
scale. It aims to channel more household savings away from traditional instruments, such as 
savings deposits, towards the capital markets.  

The proposal aims to ensure that consumers are fully aware of the key features of the product. 
Regarding investment policy, consumers will have a choice between a safe default investment 
option and alternative options with different risk-return profiles. Consumers will benefit from 
EU-wide  portability,  full  transparency  of  the  costs  of  the  PEPP  and  the  ability  to  switch 
providers (with switching costs capped).  

From the point of view of providers, the proposal intends to enable a broad range of them to 
offer  the  PEPP  (banks,  insurers,  asset  managers,  occupational  pension  funds,  investment 
firms)  and  to  ensure  a  level  playing  field.  The  PEPP  could  be  provided  online,  including 
advice,  and  would  not  require  a  network  of  branches,  allowing  easier  market  access. 
Passporting  rules  would  help  providers  enter  new  national  markets.  Standardising  the  key 
features should also reduce providers’ costs and help them pool contributions from different 
national markets in order to channel assets into EU-wide investments.  

3 

4 
5 
6 

European Parliament, Resolution of 19 January 2016 on stocktaking and challenges of the EU Financial 
Services Regulation: impact and the way forward towards a more efficient and effective EU framework 
for Financial Regulation and a Capital Markets Union, 2015/2106(INI), point 20. 
European Council conclusions of 28 June 2016, EUCO 26/16, point 11. 
COM(2016) 601 final, p. 4. 
COM(2017) 292 final, p. 6. 

EN 

3 

   EN 

                                                 
The  flexibility  around  other  features,  such  as  the  conditions  for  accumulating  pension 
contributions,  is  intended  to  enable  consumers  to  benefit  from  national  tax  incentives 
available in their Member State of residence, provided that the providers adapt the PEPPs to 
the national criteria for tax incentives. 

In  order  to  encourage  Member  States  to  grant  tax  relief  on  the  PEPP,  the  Commission  has 
adopted a Recommendation on the tax treatment of personal pension products, including the 
pan-European Personal Pension Product, alongside this proposal. 

1.2. 

Consistency with existing policy provisions in the policy area 

In the area of pensions, the EU has adopted the following major initiatives in recent years: 

  1998  Directive  on  safeguarding  the  supplementary  pension  rights  of  employed  and 

self-employed persons moving within the Community7; 

  2014  Directive  on  the  portability  of  supplementary  pension  rights8,    aimed  at 
promoting  worker  mobility  by  reducing  the  obstacles  created  by  certain  rules  on 
occupational pensions;  

  2016 Directive on institutions for occupational retirement provision (‘IORP2’)9, which 
strengthens  governance,  information  disclosure  and  cross-border  requirements  for 
occupational pension funds.  

Further  non-legislative  measures  taken  by  the  Commission  in  the  pensions  area  include  the 
‘Track  and  trace  your  pension  in  Europe  project’10,  proposing  the  creation  of  a  European 
tracking  service  to  help  people  track  information  about  their  pension  entitlements  across 
Member States, and the RESAVER project11.  

The proposal for a PEPP framework does not affect the three directives mentioned above, as 
they  target  occupational  pensions.  With  regard  to  non-legislative  initiatives,  the  PEPP 
framework could be integrated into future projects.  

1.3. 

Consistency with other EU policies 

The proposal aims to increase the take-up of personal pensions in the EU. It is consistent with 
the EU policy of encouraging complementary retirement savings in order to achieve pension 
adequacy, as set out in the Commission White Paper on pensions in 201212. In line with this, 
the 2015 Pension Adequacy Report concluded that increased entitlements from supplementary 
(that  is,  occupational  and  personal)  retirement  savings  could,  alongside  other  measures, 

7 

8 

9 

10 
11 

12 

Council  Directive  98/49/EC  of  29  June  1998  on  safeguarding  the  supplementary  pension  rights  of 
employed and self-employed persons moving within the Community, OJ L 209, 25.7.1998, p. 46. 
Directive  2014/50/EU  of  the  European  Parliament  and  of  the  Council  of  16  April  2014  on  minimum 
requirements for enhancing worker mobility between Member States by improving the acquisition and 
preservation of supplementary pension rights, OJ L 128, 30.4.2014, p. 1. 
Directive 2016/2341/EU of the European Parliament and of the Council of 14 December 2016 on the 
activities  and  supervision  of  institutions  for  occupational  retirement  provision  (IORPs),  OJ  L  354, 
23.12.2016, p. 37. 
http://ttype.eu/   
http://www.resaver.eu/. The RESAVER project is a sector-specific occupational pension fund designed 
to make it easier for research staff to keep their pension arrangements as they move between research 
institutions in different EU countries. It also includes a personal pension option.   
White  paper  An  Agenda  for  Adequate,  Safe  and  Sustainable  Pensions,  COM(2012)  55  final, 
16 February 2012. 

EN 

4 

   EN 

                                                 
 
 
mitigate the impact of lower pensions from public schemes in some Member States. The 2017 
Annual  Growth  Survey  reported  that  broad  coverage  (i.e.  wide  availability  and  increased 
uptake) of supplementary pensions could play a key role in  retirement income provision, in 
particular where public pensions may be inadequate, and should be promoted by appropriate 
means, depending on the national context. 

The proposal is in line with EU policy on strengthening consumer protection, in particular by 
developing a low-risk default investment option, requiring full transparency to PEPP savers, 
specifically on costs, and allowing savers to switch provider with a cap on switching costs.  

2. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

2.1. 

Legal basis 

The  legal  basis  for  this  proposal  is  Article  114  of  the  Treaty  on  the  Functioning  of  the 
European  Union  (TFEU),  which  allows  the  adoption  of  measures  for  the  approximation  of 
national  provisions  having  as  their  object  the  establishment  and  functioning  of  the  internal 
market.  

Currently, the functioning of the internal market for personal pensions is impeded by the high 
degree  of  fragmentation  between  national  markets  and  the  limited  degree  of  portability  of 
personal pension products. This can make it difficult for individuals to make use of their basic 
freedoms.  For  example,  they  may  be  prevented  from  taking  up  a  job  or  retiring  in  another 
Member State. In addition, the possibility for providers to use the freedom of establishment 
and  the  freedom  to  provide  services  is  hampered  by  the  lack  of  standardisation  of  existing 
personal pension products.  

The  proposal  will  create  a  largely  standardised  pan-European  product,  available  in  all 
Member  States,  that  will  empower  consumers  to  make  full  use  of  the  internal  market  by 
enabling  them  to  transfer  their  pension  rights  abroad  and  offering  them  a  greater  choice  of 
providers, including in other EU countries. The proposal harmonises the core features of the 
PEPP:  authorisation,  distribution  (including  information  provision  and  advice),  investment 
policy,  switching  provider  and  cross-border  provision  and  portability.  The  proposal  is 
complemented  by  the  Recommendation  on  the  tax  treatment  of  personal  pension  products, 
including  the  pan-European  Personal  Pension  Product13.  This  is  aimed  at  avoiding  that  in 
certain  Member  States  PEPPs  fall  outside  the  scope  of  national  tax  incentives,  if  the  core 
product features do not match all national criteria for tax relief.  

2.2. 

Subsidiarity (for non-exclusive competence)  

 Under Article 4 TFEU, EU action for completing the internal market must be appraised in the 
light  of  the  subsidiarity  principle  set  out  in  Article  5(3)  of  the  Treaty  on  European  Union 
(TEU). It must be assessed whether the objectives of the proposal could not be achieved by 
the  Member  States  in  the  framework  of  their  national  legal  systems  (necessity  test)  and,  by 
reason of their scale and effects, are better achieved at EU level (effectiveness test). 

First,  regarding  the  necessity  test,  the  uncoordinated  efforts  of  Member  States,  whether  at 
central, regional or local level, cannot remedy the legal fragmentation in product regulation, 
which  results  in  extra  compliance  costs  for  providers  and  discourages  cross-border  activity. 
For example, EU legislation on distribution requirements for financial products (such as the 

13 

C(2017)4393 

EN 

5 

   EN 

 
                                                 
Insurance  Distribution  Directive,  the  Markets  in  Financial  Instruments  Directive  (MiFID  II) 
and the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation14does 
not apply to most personal pension products, so such products fall within the scope of national 
legislation.  

With  markets  for  personal  pension  products  left  exclusively  to  national  regulation, 
information  asymmetry  occurs  between  providers  and  savers,  particularly  in  a  cross-border 
context.  Accordingly,  savers  may  be  insufficiently  aware  of  the  actual  performance  of  their 
personal pension products, or even unable to switch providers. If providers at national level 
do  not  give  savers  sufficient  information,  this  can  reduce  trust  in  personal  pension  product 
providers and result in fewer transactions, lower levels of engagement with pension provision 
and poor decision-making by savers.  

The  portability  of  personal  pension  products  is  a  concern  for  people  moving  to  another  EU 
country while trying to maintain the same product and provider. Currently, when moving to 
another  Member  State,  people  have  no  choice  but  to  search  for  a  new  product  offered  by  a 
provider in the new Member State with substantially different rules, instead of continuing to 
save  in  their  former  Member  State.  National  tax  incentives  encourage  people  to  save  for 
retirement  and  are  key  to  promoting  the  take-up  of  personal  pensions.  Losing  such  tax 
benefits  when  moving  to  another  Member  State  is  a  major  barrier  to  the  cross-border 
portability  of  personal  pension  products.  Member  States  acting  alone  cannot  remedy  such 
portability issues. 

Second, regarding the effectiveness test, action at EU level can help remedy the consequences 
of market fragmentation, particularly in terms of costs. If no EU action is taken, asset pools 
are  likely  to  remain  small  and  limited  to  national  borders,  without  economies  of  scale,  and 
competition  would  remain  limited  to  domestic  providers.  Individual  savers  are  therefore 
unlikely  to  benefit  from  the  lower  prices  and  better  product  ranges  that  would  result  from 
efficiency  gains  and  returns  on  large  asset  pools.  Fragmentation  is  expensive  also  for 
providers: divergence in national regulation means extra compliance costs. There are limited 
incentives for providers to offer products cross-border, mainly due to high costs. By contrast, 
a  standardised  EU  personal  pension  product  is  expected  to  cut  providers’  costs  by  creating 
larger  asset  pools.  For  example,  a  study  has  shown  that  spreading  fixed  costs  over  a  larger 
pool of members could reduce administration costs by 25 %15. 

The creation of an EU legislative framework for personal pensions would reduce providers’ 
costs by creating economies of scale, particularly in relation to investment and administration. 
An EU personal pension framework would help providers operate across borders as it would 
allow them to centralise certain functions at EU level (rather than relying on local operations 
or outsourcing). Standardisation would make it easier for providers to offer a pension solution 
to  corporate  clients  active  in  several  Member  States  and  looking  for  an  EU-wide  personal 
pension  for  their  employees.  This  could  also  lead  to  efficiency  gains  in  distribution,  for 
example by using digital channels to sell personal pensions. An EU legislative framework for 
personal  pensions  could  be  accompanied  by  EU  policy  work  in  the  area  of  financial 
technology. 

14 
15 

Directive (EU) 2016/97, Directive 2014/65/EU, Regulation (EU) No 1286/2014. 
Ernst & Young, Study on a European Personal Pension Framework for the Commission. See section 3.2 
below. 

EN 

6 

   EN 

                                                 
Increasing the take-up of personal pensions could help secure adequate replacement rates in 
the future as a supplement to state-based and occupational pensions. A greater choice of safe 
and  high  quality  personal  pension  products  benefits  all  workers,  whether  employed  or  self-
employed,  and  whether  they  have  taken  up  a  job  in  another  Member  State  or  not.  An  EU 
single  market  for  personal  pensions  would  make  the  product  accessible  to  a  wider  range  of 
people.  Minimum  product  requirements  laid  down  in  EU  rules  would  create  transparency, 
simplicity  and  safety  for  PEPP  savers.  In  addition,  it  would  accommodate  the  increasing 
mobility of EU citizens and the increasingly flexible nature of work. 

2.3. 

Proportionality 

Under the principle of proportionality, the content and form of EU action should not exceed 
what is necessary to achieve the objectives of the Treaties. In principle, it is already possible 
to  offer  personal  pension  products  in  all  Member  States.  However,  compared  with  their 
market  potential,  they  do  not  contribute  to  channelling  enough  savings  towards  capital 
markets and to achieving the Capital Markets Union. In addition, the features of some existing 
personal pension products are insufficient, as are the development of cross-border portability 
and the provision of personal pension products. 

The  policy  options  set  out  in  the  impact  assessment  accompanying  this  proposal  include 
taking no action at EU level, the PEPP framework and harmonising national personal pension 
regimes.  

The  ‘no  EU  action’  scenario  would  not  achieve  the  above  objectives.  Conversely,  the 
harmonisation of national regimes would make it possible to achieve the objectives but would 
also require full harmonisation of very different national situations  — personal pensions are 
well-developed  in  some  Member  States  and  not  in  others.  This  option  was  assessed  as  too 
burdensome  to  reach  the  objectives.  In  this  context,  it  is  appropriate  to  propose  the  PEPP 
framework for an EU-wide personal pension product that would complement existing national 
regimes. 

The impact assessment also evaluated the options for the key features of the PEPP and the tax 
implications  of  the  recommended  features.  The  key  features  on  distribution,  investment 
policy, provider switching and cross-border elements have been designed to provide sufficient 
consumer  protection  and  make  the  framework  attractive  to  future  PEPP  providers.  For 
example, on distribution, sectorial rules would apply to a large extent. On investment policy, 
the default option would set a requirement to ensure capital protection but providers would be 
able to propose alternative investment options. Switching providers would be allowed but the 
frequency  of  switching  would  be  restricted.  On  cross-border  portability  and  supply,  the 
recommended  option  is  based  on  the  technique (currently  used  by  some  IORPs)  of  creating 
national compartments when changing Member States, but it would be further streamlined for 
the benefit of PEPP savers.  

The administrative burden of the PEPP would be limited as the proposal amounts to adding a 
new  product  category  to  the  existing  portfolio  of  products  provided  by  insurers,  pension 
funds,  investment  firms,  asset  managers  and  banks,  all  subject  to  regulatory  oversight  by 
national competent authorities under existing regulatory frameworks. Public authorities might 
impose  new  reporting  requirements  on  providers  as  regards  the  provision  of  PEPPs  and  in 
particular  to  monitor  the  cross-border  distribution  of  PEPPs.  This  administrative  burden 
should  be  proportionate  to  the  risks  of  providing  PEPPs  on  a  cross-border  basis  and  would 
enable  market  monitoring,  ensure  appropriate  supervision  and  contribute  to  consumer 
protection.  

EN 

7 

   EN 

2.4. 

Choice of the instrument 

Article  114  TFEU  allows  the  adoption  of  acts  in  the  form  of  a  regulation  or  directive.  A 
regulation was selected here for the reasons outlined below.  

First,  as  a  regulation  is  directly  applicable  in  all  Member  States,  it  would  enable  a  quicker 
take-up  of  the  PEPP  and  contribute  more  rapidly  to  addressing  the  need  for  more  pension 
savings and investments in the Capital Markets Union context. 

Second,  as  the  proposal  would  harmonise  the  core  features  of  the  PEPP,  they  must  not  be 
subject to specific national rules, so a regulation is more appropriate than a directive in this 
case.  However,  any  features  that  fall  outside  the  scope  of  the  proposal  (e.g.  accumulation 
phase conditions) would of course be subject to national rules.  

3. 

3.1. 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

The  Commission  carried  out  a  public  consultation  on  EU  personal  pensions  (including  a 
public  hearing)  between  July  and  October  2016,  which  received  585  contributions  in  total 
from  a  broad  range  of  stakeholders16.  The  responses  revealed  a  strong  interest  from  private 
individuals from all across the EU in simple, transparent and cost-effective personal pension 
products.  The  public  consultation  also  requested  feedback  from  professionals  on  the 
feasibility  of  an  EU  personal  pension  framework,  including  a  PEPP.  Overall,  they  consider 
that  the  PEPP  framework  represents  a  good  opportunity  to  develop  a  new  pension  product, 
and some professionals are already preparing to launch a PEPP.  

3.2. 

Collection and use of expertise 

The proposal is based on a study carried out by Ernst & Young on behalf of the Commission 
on  a  European  personal  pension  framework.  The  study,  completed  in  June  2017,  maps  in 
particular  the  tax  requirements  and  other  legal  requirements  applicable  across  all  Member 
States, and assesses the market potential for a PEPP. The main conclusion of the study is that 
tax  regimes  across  the  EU  are  very  diverse,  and  this  requires  sufficient  flexibility  in  an  EU 
framework on the PEPP to adapt to national criteria. In addition, the study concludes that the 
PEPP would see the personal pension market grow in value from EUR 0.7 trillion to EUR 2.1 
trillion by 2030 with the PEPP, versus EUR 1.4 trillion without the PEPP (assuming the PEPP 
would benefit from the existing national tax incentives for personal pension products).  

The proposal is also based on technical advice from the European Insurance and Occupational 
Pensions  Authority  (EIOPA)17  on  developing  an  EU  single  market  for  personal  pension 
products. This advice builds on an earlier EIOPA preliminary report Towards a single market 
for personal pensions18. The technical advice recommends: 

16 
17 

18 

See the summary of the public consultation in Annex 2 of the Impact Assessment. 
EIOPA’s advice on the development of an EU Single Market for personal pensions products (PPP), July 
2016, 
https://eiopa.europa.eu/Publications/Consultations/EIOPA%27s%20advice%20on%20the%20developm
ent%20of%20an%20EU%20single%20 market%20for%20personal%20pension%20products.pdf 
EIOPA, Towards an EU single market for personal pensions, 2014, available at: 

EN 

8 

   EN 

 
 
 
                                                 
 
  choosing the PEPP over harmonisation of national regimes; and  
  defining  key  PEPP  features  at  EU  level,  while  leaving  certain  other  tax-sensitive 

features to national law.  

As part of the key features, the technical advice recommends in particular the inclusion of a 
safe  default  investment  option  and  detailed  requirements  on  transparency  of  information  to 
PEPP savers. The proposal is in line with these recommendations. 

Finally, the proposal builds on the following: 

  OECD  study  Stocktaking  of  the  tax  treatment  of  funded  private  pension  plans  in 

OECD and EU countries;19 

  Commission-OECD project on taxation, financial incentives and retirement savings;20 
  OECD study Core Principles of Private Pension Regulation;21 and 
  Oxera  study  on  the  position  of  savers  in  private  pension  products  across  14  EU 

Member States.22 

3.3. 

Impact assessment 

The  PEPP  proposal  is  supported  by  a  positive  opinion  issued  by  the  Regulatory  Scrutiny 
Board (RSB) on 22 May 201723, after a first negative opinion issued on 2 May 201724.In its 
comments, the RSB suggested that the impact assessment should focus more on analysing the 
key product features of the PEPP, and explained how the PEPP features compare to those of 
existing personal pension products.  

The RSB also requested a more detailed quantification of the impact of the PEPP option and 
clarification  of  the  underlying  assumptions.  The  final  version  of  the  impact  assessment 
addresses these points by: 

  detailing the various options for the PEPP features; 
  explaining how they take inspiration from existing personal pension products with the 

highest penetration index; and 

  quantifying  the  extra  volumes  generated  by  the  launch  of  the  PEPP  on  the  personal 

pension market and the effect on capital markets.  

The proposal is in line with the conclusions of the impact assessment25.  

The general policy alternatives examined in the impact assessment consisted of the following 
options:  

https://eiopa.europa.eu/Publications/Reports/EIOPA-BoS-14-
029_Towards_an_EU_single_market_for_Personal_Pensions-
_An_EIOPA_Preliminary_Report_to_COM.pdf 
http://www.oecd.org/pensions/Stocktaking-Tax-Treatment-Pensions-OECD-EU.pdf 
http://www.oecd.org/daf/fin/private-pensions/financial-incentives-retirement-savings.pdf 
Available at: 
http://www.oecd.org/daf/fin/private-pensions/Core-Principles-Private-Pension- Regulation.pdf 
http://www.oxera.com/Latest-Thinking/Publications/Reports/2013/Study-on-the-position-of-savers-in-
private-pension.aspx 
Available at: http://ec.europa.eu/transparency/regdoc/?fuseaction=ia 
Available at: http://ec.europa.eu/transparency/regdoc/?fuseaction=ia 
Available at: http://ec.europa.eu/transparency/regdoc/?fuseaction=ia 

19 
20 
21

22 

23 
24 
25 

EN 

9 

   EN 

 
 
                                                                                                                                                         
 
 
  no EU action; 
  PEPP framework; or 
  harmonising the national personal pension regimes.  

Under the first option, the shortcomings identified (fragmentation of national capital markets 
would remain,  insufficient features of existing personal pension products, and limitations to 
cross-border portability and  provision)  would still exist. By contrast,  the third  option would 
address  these  shortcomings.  However,  this  would  also  involve  harmonising  national  tax 
regimes for personal pensions, which would require the unanimous support of Member States. 
In addition, there would be significant compliance costs for providers: first, they would have 
to  adapt  all  their  personal  pension  products  to  the  new  regime.  In  addition,  on  an  ongoing 
basis, this regime  may differ significantly from the sectorial  regimes  under which providers 
are distributing their other financial products.  

The  impact  assessment  therefore  concludes  that  the  second  option  is  the  preferred  policy 
choice as it offers an additional harmonised pan-European framework that complements the 
existing  national  regimes  and  can  overcome  the  shortcomings  identified  by  using  targeted 
solutions that avoid excessive compliance costs.   

The PEPP framework would have a positive economic impact. According to the EY study, it 
would result in the assets under management in the personal pension product market growing 
from  EUR 0.7  trillion  to  EUR 2.1  trillion  by  2030  with  the  PEPP  versus  EUR 1.4  trillion 
without the PEPP, assuming that tax incentives are granted to the PEPP.  

It would also have a positive social impact as more people would be able to complement other 
sources of income in retirement with PEPP and thus improve the adequacy of their pensions. 
It  would  in  particular  have  a  greater  impact  for  workers  in  non-standard  employment,  self-
employed and mobile workers who have not sufficient or no access to state or occupational 
pension systems. The positive social impact would be higher in Member States with a limited 
choice and limited take-up of personal pension products at present. 

No significant environmental impact is expected, although encouraging providers to take into 
account  environmental,  social  and  governance  factors  in  their  investments  (associated  with 
disclosure requirements) can have a positive effect in terms of sustainability.     

3.4. 

Fundamental rights 

The  proposal  respects  the  fundamental  rights  and  observes  the  principles  recognised  by  the 
Charter of Fundamental Rights of the European Union, in particular the right to the protection 
of personal data, the right to property, the freedom to conduct a business and the principle of 
equality between men and women. It contributes to the objectives of Article 38 of the Charter 
which provides for a high level of consumer protection. 

4. 

BUDGETARY IMPLICATIONS 

The  proposal  has  implications  for  the  EU  budget.  In  particular,  the  additional  tasks  for  the 
European  supervisory  authorities  (ESAs)  will  require  an  increase  in  resources  as  well  as 
certain operational investments. These tasks include: 

  authorisation of PEPPs; 
 
the development of additional guidance; or 
  a central register for all authorised PEPPs.  

EN 

10 

   EN 

 
Costs of EUR 1 000 000 have been estimated for 2019, including a one-time investment for 
operational matters, and will total around EUR 1 200 000 per year by 2021. Under the current 
co-financing  arrangements  of  the  ESAs,  40 %  of  this  funding  will  be  included  in  the  EU 
budget  and will, as such, not  go beyond what is set out  in the current multiannual financial 
framework that runs until 2020.  

5. 

OTHER ELEMENTS 

5.1. 

Implementation plans and monitoring, evaluation and reporting arrangements 

After  the  Regulation  has  entered  into  force,  the  Commission  will  monitor  key  mid-term 
performance indicators for the objectives. These indicators include: 

 

 

 

the  total  uptake  —  in  terms  of  assets  under  management  —  of  personal  pension 
products  and  the  geographical  and  sectorial  distribution  of  PEPP  providers  and 
investments in PEPPs (objective of increasing investment in the EU and contributing 
to completing the CMU); 
the number of PEPP registrations and the relative share of personal pension products 
(including  national  products  and  the  PEPP)  as  a  percentage  of  households’  financial 
assets  (objective  of  improving  the  product  features  on  the  personal  pension  market); 
and 
the  number  of  providers  using  a  passport  for  cross-border  activity  and  the  relative 
share of PEPPs with more than one national compartment as compared to all personal 
pension products (objective of increasing the cross-border provision and portability of 
personal pension products). 

The  data  collected  by  the  ESAs  in  particular  could  help  monitor  the  PEPP  performance 
indicators. 

In addition, the Commission will assess to what extent the Commission recommendation for 
preferential tax treatment for the PEPP has been taken up by Member States through national 
legislation. 

The proposal includes an evaluation five years after the date of application of the Regulation.  

5.2. 

Detailed explanation of the specific provisions of the proposal 

The proposed Regulation on a pan-European Personal Pension Product has 11 chapters. Apart 
from  the  first  chapter  (General  provisions)  and  last  chapter  (Final  provisions),  the  structure 
follows the life cycle of the product.  

Chapter I outlines the objectives of the proposed Regulation, which include: 

 

raising more capital and channelling it towards European long-term investments in the 
real economy; 

  offering  enhanced  product  features  so  that  citizens  benefit  from  a  simple,  safe  and 
cost-effective  personal  pension  product  while  being  able  to  choose  from  different 
types of PEPP providers; and 

  encouraging PEPP cross-border provision and portability. 

EN 

11 

   EN 

 
Chapter  I  contains  the  definitions  of  important  concepts  for  the  proposed  Regulation, 
including  ‘pan-European  Personal  Pension  Product’,  ‘PEPP  account’,  ‘retirement  benefits’, 
‘accumulation  phase’,  ‘decumulation  phase’,  ‘provider’  and  ‘distributor  of  a  PEPP’, 
‘portability of the PEPP’ and ‘switching providers’. 

The Article on applicable rules explains the interaction between the proposed Regulation, the 
contractual provisions for PEPP and national rules for regulating the subject matter. 

Chapter II introduces the principle that only financial undertakings already authorised at EU 
level  by  the  competent  authorities  under  the  applicable  sectorial  legal  instrument,  would  be 
eligible to apply for authorisation to provide PEPPs (i.e. to create and distribute them). The 
authorisation  to  act  as  a  PEPP  provider,  i.e.  to  use  the  ‘PEPP’  label  for  personal  pension 
products, will be granted by a single EU authority, EIOPA. The designation ‘PEPP’ or ‘pan-
European  Personal  Pension  Product’  in  relation  to  a  personal  pension  product  may  only  be 
used where the personal pension product has been authorised by EIOPA to be provided under 
the  designation  ‘PEPP’.  Existing  personal  pension  products  may  be  converted  into  PEPPs 
following  authorisation  by  EIOPA,  which  must  consult  the  competent supervisory authority 
of the financial undertaking before deciding whether to reject or approve its application.  

In  addition,  Chapter  II  provides  rules  so  that  PEPPs  might  also  be  distributed  by  financial 
undertakings that have not created them. This can be done by financial undertakings that have 
received a specific authorisation for distribution by their national competent authorities, and 
by  insurance,  reinsurance  and  ancillary  insurance  intermediaries  registered  as  such  under 
Directive 2016/97/EU (the Insurance Distribution Directive). 

Chapter  III  establishes  the  allocation  of  prerogatives  between  the  competent  authorities  of 
home and host Member States in allowing the freedom to provide services and the freedom of 
establishment by PEPP providers. Acknowledging the concerns of some Member States about 
a possible uneven playing field due to the different prudential regimes to which the different 
types of potential PEPP providers are subject to, the ‘passporting’ regime would mitigate the 
competitive effects of the different prudential regimes to a large extent, insofar as it relies on 
the  competent  authorities  of  home  and  host  Member  States  along  with  the  ‘label’ 
authorisation entrusted to EIOPA. 

Chapter III also includes the provisions on portability. This enables PEPP savers who change 
their domicile by moving to another Member State to continue paying into a PEPP that they 
have  already  taken  out  with  a  provider  in  the  original  Member  State.  In  such  a  case,  PEPP 
savers  are  entitled  to  keep  all  the  advantages  and  incentives  connected  with  continuous 
investment in the same PEPP.  

The mechanism behind the portability service envisages opening a new compartment within 
each individual PEPP account. This compartment corresponds to the legal requirements and 
conditions for using tax incentives fixed at national level for the PEPP by the Member State to 
which  the  PEPP  saver  moves.  The  mechanism  for  opening  new  compartments,  transferring 
the  accumulated  rights  between  these  compartments  and  providing  information  about  this 
option is laid down in the proposed Regulation and follows a staggered approach. During the 
first  three  years  of  application  of  the  Regulation,  PEPP  providers  will  have  to  provide 
information on the available compartments. Afterwards, PEPP savers will be entitled to open 
national compartments that cover all Member States’ regimes. 

EN 

12 

   EN 

Chapter IV aims to achieve the greatest possible transparency, in particular for potential PEPP 
savers, on PEPP features. The rules clarify in particular that all documents and information on 
PEPP  will  be  provided  to  prospective  PEPP  savers  and  PEPP  beneficiaries  electronically  –
electronic  distribution  is  the  default  option.  Upon  request,  PEPP  providers  and  distributors 
must also provide those documents and information free of charge in a durable medium. 

In  terms  of  advice,  PEPP  providers  will  be  expected  to  conduct  a  suitability  and 
appropriateness test of potential PEPP savers, although savers may waive their right to receive 
advice if they opt for the default option. 

The  cornerstone  of  providing  pre-contractual  information  is  the  PEPP  key  information 
document. Its form, content and conditions of provision are described in detail in the proposed 
Regulation.  

On the information provided during the term of the PEPP contract, the provider must produce 
a ‘PEPP Benefit Statement’. This will include information on: 

 
 
 

the accrued entitlements or accumulated capital; 
full or partial guarantees under the PEPP scheme; and 
if applicable, the nature of the guarantee and mechanisms to protect accrued individual 
entitlements.  

Chapter  V  deals  with  the  accumulation  phase  of  the  PEPP,  including  investment  rules  for 
PEPP  providers  and  PEPP  savers.  The  provisions  applicable  to  PEPP  providers  are  derived 
from  the  ‘prudent  person  rule’26  and  provide  a  safe  and  reliable  framework  for  investment 
policies.  

As to PEPP savers, they are to be offered up to five investment options by PEPP providers, 
one  of  them  being  a  default  investment  option  that  ensures  that  the  PEPP  saver  recoups  at 
least the capital invested. All investment options must be designed by PEPP providers on the 
basis of proven risk mitigation techniques that ensure sufficient protection for PEPP savers. 
Having concluded the PEPP contract, PEPP savers must select an investment option and must 
be able to change it free of charge once in every five years of accumulation. 

Scope  is  left  to  Member  States  as  regards  all  other  conditions  relating  to  the  accumulation 
phase. Such conditions may include: 

  age limits for starting the accumulation phase; 
  minimum duration of the accumulation phase; 
  maximum and minimum amount of in-payments and their continuity; and 
  conditions for redemption before retirement age in case of particular hardship. 

Chapter  VI  establishes  the  mechanism  for  appointing  a  depositary  in  the  case  of  a  PEPP 
scheme  where  PEPP  savers  and  PEPP  beneficiaries  fully  bear  the  investment  risk.  The 
provisions  cover  the  safekeeping  of  assets,  the  oversight  duties  of  the  depositary  and  its 
liability.  

26 

The  requirement  that  a  trustee,  an  investment  manager  of  pension  funds,  or  any  fiduciary  (a  trusted 
agent)  must invest  funds  with  discretion,  care,  and  intelligence.  Investments  that are  generally within 
the  prudent  person  rule  include  solid  "blue  chip"  securities,  secured  loans,  federally  guaranteed 
mortgages, treasury certificates, and other conservative investments providing a reasonable return. 

EN 

13 

   EN 

                                                 
The  proposed  Regulation  requires  that  procedures  be  set  up  to  allow  customers  and  other 
interested  parties,  especially  consumer  associations,  to  lodge  complaints  against  PEPP 
providers  and  distributors.  In  all  cases,  complainants  must  receive  replies.  Appropriate 
mechanisms for impartial and independent out-of-court complaint and redress procedures for 
the settlement of disputes between PEPP savers and PEPP providers or distributors must also 
be put in place. 

The proposed Regulation includes the possibility for PEPP providers to cover the risk of death 
and other biometric risks. 

Chapter  VII  regulates  the  switching  of  PEPP  providers.  Following  a  request  by  the  PEPP 
saver, any positive balance will be transferred from a PEPP account held with the transferring 
provider  to  a  new  PEPP  account  opened  with  the  receiving  provider,  and  the  former  PEPP 
account will be closed. The switching service may be provided by PEPP providers established 
in the same Member State (domestic switching) or  in different Member States (cross-border 
switching).  A  ceiling  is  envisaged  for  the  total  fees  and  charges  applied  by  the  transferring 
PEPP provider to the PEPP saver for the termination of the PEPP account held with it.  

Chapter  VIII  leaves  most  of  the  PEPP  conditions  related  to  the  decumulation  phase  to  be 
determined by Member States — in particular: 

  setting the retirement age; 
  a  mandatory  link  between  reaching  retirement  age  and  the  start  of  the  decumulation 

phase; 

  a minimum period of belonging to a PEPP scheme; and 
  a maximum period before reaching retirement age for joining a PEPP scheme. 

On the forms  of out-payments  (e.g. annuities, lump sums, income drawdown payments), by 
giving  PEPP  providers,  PEPP  savers  and  PEPP  beneficiaries  the  freedom  to  contractually 
determine the form(s), the proposal imposes this flexibility on Member States as a mandatory 
condition,  which  may  have  an  impact  on  the  availability  of  national  tax  incentives  for  the 
PEPPs in some Member States. 

Chapter  IX  divides  the  supervisory  responsibilities  between  EIOPA  and  the  national 
competent  authorities.  EIOPA  is  required  to  monitor  pension  schemes  established  or 
distributed in the territory of the EU to verify that they do not use the designation ‘PEPP’ or 
infer that they are a PEPP unless they are authorised under the proposed Regulation.  

Chapter X describes which infringements of the provisions of the proposed Regulation may 
lead  to  penalties,  how  national  competent  authorities  may  impose  these  penalties  and  how 
infringements and penalties should be reported.  

Chapter  XI  confers  on  the  European  Commission  the  power  to  adopt  delegated  acts  in  the 
areas of: 

inducements; 

  conflicts of interest; 
 
  selling PEPPs with and without advice; 
  product oversight and governance requirements; 
  provision of information during the contract term; and 
 

reporting to national authorities and investment options.  

EN 

14 

   EN 

The Commission will also adopt regulatory technical standards on the content and provision 
of  the  key  information  document  and  implement  technical  standards  on  a  standardised 
presentation format for the PEPP Benefit Statement.  

The Commission is required to evaluate the Regulation five years after the date of entry into 
force of the Regulation. The evaluation would notably look at how its rules are working and 
the  experience  acquired  in  applying  them,  the  extent  to  which  the  designation  "PEPP"  has 
been used by PEPP providers, the geographical and sectorial distribution of PEPP providers 
and investments in PEPPs, the impact of this Regulation on the personal pensions market, the 
appropriateness  of  the  information  requirements  under  Chapter  IV,  the  appropriateness  of 
complementing  this  Regulation  with  provisions  on  incentives  for  investing  in  PEPPs,  the 
existence  of  any  barriers  that  may  have  impeded  investment  into  personal  pension  products 
using the designation "PEPP", including the impact on PEPP savers of other Union law, the 
level of fees and charges required by PEPP providers for opening new compartments within 
PEPP savers' individual PEPP accounts, and the impact of PEPP-related investment decisions 
on environmental, social and governance factors. 

EN 

15 

   EN 

2017/0143 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on a pan-European Personal Pension Product (PEPP) 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Economic and Social Committee27,  

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

27 
28 

EU  households  are  amongst  the  highest  savers  in  the  world,  but  the  bulk  of  these 
savings are held in bank accounts with short maturities. More investment into capital 
markets  can  help  meet  the  challenges  posed  by  population  ageing  and  low  interest 
rates.  

Personal pensions are important in linking long-term savers with long-term investment 
opportunities. A larger, European market for personal pensions will support the supply 
of funds for institutional investors and investment into the real economy.  

Currently, the functioning of the internal market for personal pensions is impeded by 
the high degree of fragmentation between national markets and the limited degree of 
portability of personal pension products. This can result in difficulties for individuals 
to make use of their basic freedoms. For instance, they may be prevented from taking 
up a job or retiring in another Member State. In addition, the possibility for providers 
to use the freedom of establishment and the freedom to provide services is hampered 
by the lack of standardisation of existing personal pension products. 

The Capital Markets Union (CMU) will help mobilise capital in Europe and channel it 
to all companies, including small and medium enterprises, infrastructure and long term 
sustainable projects that need it to expand and create jobs. One of the main objectives 
of the CMU is to increase investment and choices for retail investors by putting European 
savings to better use. 
As  announced  in  the  Commission's  Action  Plan  on  building  a  CMU28,  in  September 
2015,  "the  Commission  will  assess  the  case  for  a  policy  framework  to  establish  a 

OJ C , , p. . 
Action  Plan  on  Building  a  Capital  Markets  Union,  European  Commission,  30  September  2015 
(COM(2015) 468 final). 

EN 

16 

   EN 

                                                 
 
(6) 

(7) 

(8) 

(9) 

successful  European  market  for  simple,  efficient  and  competitive  personal  pensions, 
and determine whether EU legislation is required to underpin this market." 
In  its  Resolution  of  19  January  201629,  the  European  Parliament  stressed  that  "an 
environment  must  be  fostered  that  stimulates  financial  product  innovation,  creating 
more  diversity  and  benefits  for  the  real  economy  and  providing  enhanced  incentives 
for  investments,  and  that  may  also  contribute  to  the  delivery  of  adequate,  safe  and 
sustainable  pensions,  such  as,  for  example,  the  development  of  a  pan-European 
Pension Product (PEPP), with a simple transparent design". 
In  its  conclusions  of  28  June  201630,  the  European  Council  called  for  "swift  and 
determined  progress  to  ensure  easier  access  to  finance  for  business  and  to  support 
investment  in  the  real  economy  by  moving  forward  with  the  Capital  Markets  Union 
agenda". 

In  its  Communication  of  14  September  2016  Capital  Markets  Union  –  Accelerating 
Reform31,  the  Commission  announced  that  it  "will  consider  proposals  for  a  simple, 
efficient  and  competitive  EU  personal  pension  product  [..]  Options  under 
consideration include a possible legislative proposal which could be tabled in 2017."  
In its Communication Mid-Term Review of the Capital Markets Union Action Plan32, 
the  Commission  announced  "a  legislative  proposal  on  a  pan-European  Personal 
Pension Product (PEPP) by end June 2017. This will lay the foundations for a safer, 
more  cost-efficient  and  transparent  market  in  affordable  and  voluntary  personal 
pension savings that can be managed on a pan-European scale. It will meet the needs 
of  people  wishing  to  enhance  the  adequacy  of  their  retirement  savings,  address  the 
demographical challenge, complement the existing pension products and schemes, and 
support  the  cost-efficiency  of  personal  pensions  by  offering  good  opportunities  for 
long-term investment of pension savings". 

(10)  Among  personal  pension  products,  the  development  of  a  PEPP  will  contribute  to 
increasing  choices  for  retirement  saving  and  establish  an  EU  market  for  PEPP 
providers. It will provide households with better options to meet their retirement goals. 

(11)  A legislative framework for a PEPP will lay the foundations for a successful market in 
affordable and voluntary retirement-related investments that can be managed on a pan-
European scale. By complementing the existing pension products and schemes, it will 
contribute  to  meeting  the  needs  of  people  wishing  to  enhance  the  adequacy  of  their 
retirement savings, addressing the demographical challenge and providing a powerful 
new  source  of  private  capital  for  long-term  investment.  This  framework  will  not 
replace or harmonise existing national personal pension schemes. 

(12)  The  Regulation  harmonises  a  set  of  core  features  for  the  PEPP,  which  concern  key 
elements  such  as  distribution,  investment  policy,  provider  switching,  or  cross-border 
provision  and  portability.  The  harmonisation  of  these  core  features  will  improve  the 
level  playing  field  for  personal  pension  providers  at  large  and  help  boost  the 
completion  of  the  CMU  and  the  integration  of  the  internal  market  for  personal 

29 

30 
31 
32 

European Parliament, Resolution of 19 January 2016 on stocktaking and challenges of the EU Financial 
Services Regulation: impact and the way forward towards a more efficient and effective EU framework 
for Financial Regulation and a Capital Markets Union, 2015/2106(INI), point 20. 
European Council Conclusions of 28 June 2016, EUCO 26/16, point 11. 
COM(2016) 601 final, p. 4. 
COM(2017) 292 final, p. 6. 

EN 

17 

   EN 

                                                                                                                                                         
 
pensions. It will lead to the creation of a largely standardised pan-European product, 
available in all Member States, empowering consumers to make full use of the internal 
market  by  transferring  their  pension  rights  abroad  and  offering  a  broader  choice 
between different types of  providers, including in  a  cross-border  way.  As a result of 
fewer  barriers  to  the  provision  of  pension  services  across  borders,  a  pan-European 
Personal  Pension  Product  will  increase  competition  between  providers  on  a  pan-
European basis and create economies of scale that should benefit savers. 

(13)  Article  114  TFEU  allows  the  adoption  of  acts  both  in  the  shape  of  Regulations  or 
Directives.  The  adoption  of  a  Regulation  has  been  preferred  as  it  would  become 
directly  applicable  in  all  Member  States.  Therefore,  a  Regulation  would  allow  a 
quicker uptake of the PEPP and contribute more rapidly to address the need for more 
pension  savings  and  investments  in  the  CMU  context.  Since  this  Regulation  is 
harmonising the core features of the PEPPs, they do not have to be subject to specific 
national rules, so a Regulation appears better suited than a Directive in this case. On 
the  contrary,  the  features  which  are  out  of  the  scope  of  the  Regulation  (e.g. 
accumulation phase conditions) are subject to national rules.  

(14)  PEPP providers should have access to the whole Union market with one single product 
authorisation issued by the European Insurance and Occupational Pensions Authority 
("EIOPA"), on the basis of a single set of rules.  

(15)  The single PEPP passport will ensure the creation of a single market for PEPP. 

(16) 

(17) 

In order to ensure a high quality of service and effective consumer protection, home 
and host Member States should closely cooperate in the enforcement of the obligations 
set out in this Regulation. Where PEPP providers and distributors pursue business in 
different  Member  States  under  the  freedom  to  provide  services,  the  competent 
authority  of  the  home  Member  State  should  be  responsible  for  ensuring  compliance 
with  the  obligations  set  out  in  this  Regulation,  because  of  its  closer  links  with  the 
PEPP  provider.  In  order  to  ensure  fair  sharing  of  responsibilities  between  the 
competent  authorities  from  the  home  and  the  host  Member  States,  if  the  competent 
authority  of  a  host  Member  State  becomes  aware  of  any  breaches  of  obligations 
occurring  within  its  territory,  it  should  inform  the  competent  authority  of  the  home 
Member  State  which  should  then  be  obliged  to  take  the  appropriate  measures. 
Moreover,  the  competent  authority  of  the  host  Member  State  should  be  entitled  to 
intervene  if  the  home  Member  State  fails  to  take  appropriate  measures  or  if  the 
measures taken are insufficient. 

In  the  case  of  the  establishment  of  a  branch  or  a  permanent  presence  in  another 
Member  State,  it  is  appropriate  to  distribute  responsibility  for  enforcement  between 
home  and  host  Member  States.  While  responsibility  for  compliance  with  obligations 
affecting  the  business  as  a  whole  –  such  as  the  rules  on  professional  requirements  –   
should remain with the competent authority of the home Member State under the same 
regime  as  in  the  case  of  provision  of  services,  the  competent  authority  of  the  host 
Member  State  should  assume  responsibility  for  enforcing  the  rules  on  information 
requirements  and  conduct of business  with  regard to the services  provided within its 
territory.  However,  where  the  competent  authority  of  a  host  Member  State  becomes 
aware  of  any  breaches  of  obligations  occurring  within  its  territory  with  respect  to 
which this Directive does not confer responsibility on the host Member State, a close 
cooperation demands that that authority informs the competent authority of the home 
Member  State  so  that  the  latter  takes  the  appropriate  measures.  Such  is  the  case  in 
particular as regards breaches of the rules on good repute, professional knowledge and 

EN 

18 

   EN 

competence requirements. Moreover, in view of protecting consumers, the competent 
authority of the host Member State should be entitled to intervene if the home Member 
State fails to take appropriate measures or if the measures taken are insufficient.  

(18)  The  competent  authorities  of  the  Member  States  should  have  at  their  disposal  all 
means  necessary  to  ensure  the  orderly  pursuit  of  business  by  PEPP  providers  and 
distributors throughout the Union, whether pursued in accordance with the freedom of 
establishment or the freedom to provide services. In order to ensure the effectiveness 
of supervision, all actions taken by the competent authorities should be proportionate 
to the nature, scale and complexity of the risks inherent in the business of a particular 
provider  or  distributor,  regardless  of  the  importance  of  the  provider  or  distributor 
concerned for the overall financial stability of the market. 

(19)  The  pan-European  dimension  of  the  PEPP  can  be  developed  not  only  at  the  level  of 
the provider, through the possibilities for its cross-border activity, but also at the level 
of  the  PEPP  saver  –  through  the  portability  of  the  PEPP,  thus  contributing  to  the 
safeguarding  of  personal  pension  rights  of  persons  exercising  their  right  to  free 
movement  under  Articles  21  and  45  TFEU.  Portability  involves  the  PEPP  saver 
changing  residence  to  another  Member  State  without  changing  PEPP  providers, 
whereas  the  switching  of  PEPP  providers  does  not  necessarily  involve  a  change  of 
residence. 

(20)  A  PEPP  should  comprise  national  compartments,  each  of  them  accommodating 
personal pension product features allowing that contributions to the PEPP qualify for 
incentives.  At  the  level  of  the  individual  PEPP  saver,  a  first  compartment  should  be 
created upon opening of a PEPP.  

(21) 

In order to allow a smooth transition for PEPP providers, the obligation of providing 
PEPPs  comprising compartments  for  each  Member  State will  apply three  years  after 
the entry into force of this Regulation. However, upon launching a PEPP, the provider 
should  provide  information  on  which  national  compartments  are  immediately 
available, in order to avoid a possible misleading of consumers.  

(22)  Taking  into  account  the  nature  of  the  pension  scheme  established  and  the 
administrative burden involved, PEPP providers and distributors should provide clear 
and adequate information to potential PEPP savers and PEPP beneficiaries to support 
their decision-making about their retirement. For the same reason, PEPP providers and 
distributors should equally ensure a high level of transparency throughout the various 
phases of a scheme comprising pre-enrolment, membership (including pre-retirement) 
and  post-retirement. 
information  concerning  accrued  pension 
entitlements,  projected  levels  of  retirement  benefits,  risks  and  guarantees,  and  costs 
should be given. Where projected levels of retirement benefits are based on economic 
scenarios, that information should also include an unfavourable scenario, which should 
be extreme but plausible.  

In  particular, 

(23)  Before  joining  a  PEPP  scheme,  potential  PEPP  savers  should  be  given  all  the 

necessary information to make an informed choice. 

(24) 

In order to ensure optimal product transparency, PEPP manufacturers should draw up 
the PEPP key information  document  for the PEPPs that they manufacture before the 
product  can  be  distributed  to  PEPP  savers.  They  should  also  be  responsible  for  the 
accuracy  of  the  PEPP  key  information  document.  The  PEPP  key  information 
document should replace and adapt the key information document for packaged retail 
and insurance-based investment products under Regulation (EU) No 1286/2014 of the 

EN 

19 

   EN 

European  Parliament  and  of  the  Council33  which  would  not  have  to  be  provided  for 
PEPPs. 

(25) 

In order to ensure widespread dissemination and availability of PEPP key information 
documents, this Regulation should provide for publication by the PEPP manufacturer 
of PEPP key information documents on its website.  

(26)  Pension product calculators are already being developed at national level. However, in 
order for the calculators to be as useful as possible to consumers, they should cover the 
costs and fees charged by the various PEPP manufacturers, together with any further 
costs  or  fees  charged  by  intermediaries  or  other  parts  of  the  investment  chain  not 
already included by the PEPP manufacturers. 

(27)  The details of the information to be included in the PEPP key information document in 
addition  to  elements  already  provided  for  in  the  key  information  document  for 
packaged  retail  and  insurance-based  investment  products  under  Regulation  (EU)  No 
1286/2014  and  the  presentation  of  this  information  should  be  further  harmonised 
through  regulatory  technical  standards  that  complement  the  regulatory  technical 
standards laid down by Commission delegated Regulation of 8 March 201734, taking 
into account existing and ongoing research into consumer behaviour, including results 
from  testing  the  effectiveness  of  different  ways  of  presenting  information  with 
consumers.  

(28)  The  PEPP  key  information  document  should  be  clearly  distinguishable  and  separate 

from any marketing communications. 

(29)  PEPP  providers  should  draw  up  a  Pension  Benefit  Statement  addressed  to  PEPP 
savers,  in  order  to  present  them  with  key  personal  and  generic  data  about  the  PEPP 
scheme  and  to  ensure  continuous  information  on  it.  The  Pension  Benefit  Statement 
should  be  clear  and  comprehensive  and  should  contain  relevant  and  appropriate 
information  to  facilitate  the  understanding  of  pension  entitlements  over  time  and 
across schemes and serve labour mobility. 

(30)  PEPP providers should inform PEPP savers sufficiently in advance before retirement 
about their pay-out options. Where the retirement benefit is not paid out as a lifetime 
annuity, members approaching retirement should receive information about the benefit 
payment products available, in order to facilitate financial planning for retirement. 

(31)  During  the  phase  when  retirement  benefits  are  paid,  PEPP  beneficiaries  should 
continue  to  receive  information  on  their  benefits  and  corresponding  pay-out  options. 
This is particularly important when a significant level of investment risk is borne by 
PEPP beneficiaries in the pay-out phase. PEPP beneficiaries should also be informed 
of  any  reduction  in  the  level  of  benefits  due,  prior  to  the  application  of  any  such 
reduction, after a decision which will result in a reduction has been taken. As a matter 
of  best  practice,  PEPP  providers  are  recommended  to  consult  PEPP  beneficiaries  in 
advance of any such decision. 

33 

34 

Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 
on key information documents for packaged retail and insurance-based investment products (PRIIPs), 
OJ L 352, 9.12.2014, p. 1. 
Commission Delegated Regulation of 8 March 2017 supplementing Regulation (EU) No 1286/2014 of 
the European Parliament and of the Council of 26 November 2014 on key information documents for 
packaged retail and insurance-based investment products (PRIIPs) by laying down regulatory technical 
standards  with  regard  to  the presentation,  content,  review  and revision of key  information  documents 
and the conditions for fulfilling the requirement to provide such documents. 

EN 

20 

   EN 

                                                 
(32) 

In order to protect adequately the rights of PEPP savers and PEPP beneficiaries, PEPP 
providers should be able to opt for an asset allocation that suits the precise nature and 
duration  of  their  liabilities.  Therefore,  efficient  supervision  is  required  as  well  as  an 
approach to investment rules that allows PEPP providers sufficient flexibility to decide 
on  the  most  secure  and  efficient  investment  policy,  while  obliging  them  to  act 
prudently.  Compliance with  the prudent person rule therefore requires an investment 
policy geared to the customers' structure of the individual PEPP provider. 

(33)  By  setting  the  prudent  person  rule  as  the  underlying  principle  for  capital  investment 
and making it possible for PEPP providers to operate across borders, the redirection of 
savings  into  the  sector  of  personal  retirement  provision  is  encouraged,  thereby 
contributing to economic and social progress. 

(34)  This  Regulation  should  ensure  an  appropriate  level  of  investment  freedom  for  PEPP 
providers. As very long-term investors with low liquidity risks, PEPP providers are in 
a  position  to  contribute  to  the  development  of  the  CMU  by  investing  in  non-liquid 
assets such as shares and in other instruments that have a long-term economic profile 
and  are  not  traded  on  regulated  markets,  multilateral  trading  facilities  (MTFs)  or 
organised trading facilities (OTFs) within prudent limits. They can also benefit from 
the  advantages  of  international  diversification.  Investments  in  shares  in  currencies 
other  than  those  of  the  liabilities  and  in  other  instruments  that  have  a  long-term 
economic  profile  and  are  not  traded  on  regulated  markets,  MTFs  or  OTFs  should 
therefore  not  be  restricted,  in  line  with  the  prudent  person  rule  so  as  to  protect  the 
interest of PEPP savers and PEPP beneficiaries, except on prudential grounds.  

(35) 

In  the  context  of  deepening  the  CMU,  the  understanding  of  what  constitutes 
instruments  with  a  long-term  economic  profile  is  broad.  Such  instruments  are  non-
transferable  securities  and  therefore  do  not  have  access  to  the  liquidity  of  secondary 
markets. They often require fixed term commitments which restrict their marketability 
and should be understood to include participation and debt instruments in, and loans 
provided  to,  non-listed  undertakings.  Non-listed  undertakings  include  infrastructure 
projects, unlisted companies seeking growth,  real  estate or  other  assets that could be 
suitable  for  long  term  investment  purposes.  Low  carbon  and  climate  resilient 
infrastructure  projects  are  often  non-listed  assets  and  rely  on  long  term  credits  for 
project financing. Considering the long-term nature of their liabilities, PEPP providers 
are  encouraged  to  allocate  a  sufficient  part  of  their  asset  portfolio  to  sustainable 
investments  in  the  real  economy  with  long-term  economic  benefits,  in  particular  to 
infrastructure projects and corporates. 

(36)  Environmental,  social  and  governance  factors,  as  referred  to  in  the  United  Nations-
supported  Principles  for  Responsible  Investment,  are  important  for  the  investment 
policy  and  risk  management  systems  of  PEPP  providers.  PEPP  providers  should  be 
encouraged to consider such factors in investment decisions and to take into account 
how they form part of their risk management system. 

(37) 

(38) 

In  ensuring  compliance  with  their  obligation  to  develop  an  investment  policy  in 
accordance with the prudent person rule, PEPP providers should be prevented to invest 
in high-risk and non-cooperative jurisdictions identified by the Financial Action Task 
Force.  

In  view  of  the  long-term  retirement  objective  of  the  PEPP,  the  investment  options 
granted  to  the  PEPP  savers  should  be  framed,  covering  the  elements  which  allow 
investors to make an investment decision, including the number of investment options 
they can choose from. After the initial choice made upon the subscription of a PEPP, 

EN 

21 

   EN 

the  PEPP  saver  should  have  the  possibility  to  modify  this  choice  at  reasonable 
intervals (every five years), so that sufficient stability is offered to providers for their 
long-term investment strategy whilst at the same time investor protection is ensured. 

(39)  The  default  investment  option  should  allow  the  PEPP  saver  to  recoup  the  invested 
capital.  The  PEPP  providers  could  in  addition  include  an  inflation  indexation 
mechanism to at least partly cover inflation. 

(40)  The competent authority should exercise its powers having as its prime objectives the 
protection  of  the  rights  of  PEPP  savers  and  PEPP  beneficiaries  and  the  stability  and 
soundness of PEPP providers. 

(41)  Where the PEPP provider is an institution for occupational retirement provision or an 
investment  firm,  it  should  appoint  a  depositary  in  relation  to  the  safe-keeping  of  its 
assets.  This  is  necessary  for  protecting  consumers,  since  the  sectorial  legislation 
applicable  to  institutions  for  occupational  retirement  provision  and  investment  firms 
does not provide for the appointment of a depositary. 

(42)  Transparency  of  costs  and  fees  is  essential  to  develop  PEPP  savers'  trust  and  allow 
them  to  make  informed  choices.  Accordingly,  the  use  of  non-transparent  pricing 
methods should be prohibited. 

(43) 

In order to fulfil the objectives set out in this Regulation, the power to adopt acts in 
accordance with Article 290 of the Treaty on the Functioning of the European Union 
should be delegated to the Commission in respect of specifying the conditions for the 
exercise  of  intervention  powers  by  EIOPA  and  the  competent  authorities.  It  is  of 
particular importance that the Commission carry out appropriate consultations during 
its preparatory work. The Commission, when preparing and drawing up delegated acts, 
should  ensure  a  simultaneous,  timely  and  appropriate  transmission  of  relevant 
documents to the European Parliament and to the Council. 

(44)  The  Commission  should  adopt  draft  implementing  technical  standards  developed  by 
the ESAs, through the Joint Committee, with regard to the presentation and the content 
of specific elements the PEPP key information document not covered by the [PRIIPs 
KID RTS] in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010 of 
the  European  Parliament  and  of  the  Council35,  of  Regulation  (EU)  No  1094/2010  of 
the European Parliament and of the Council36 and of Regulation (EU) No 1095/2010 
of the European Parliament and of the Council37. The Commission should complement 
the technical work of the ESAs by conducting consumer tests of the presentation of the 
key information document as proposed by the ESAs. 

(45)  Without prejudice to the right of PEPP customers to bring action in the courts, easily 
accessible,  adequate,  independent,  impartial,  transparent  and  effective  alternative 

35 

36 

37 

Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 
establishing a European Supervisory Authority (European Banking Authority), amending Decision No 
716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12). 
Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 
establishing  a  European  Supervisory  Authority  (European  Insurance  and  Occupational  Pensions 
Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ 
L 331, 15.12.2010, p. 48). 
Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 
establishing a European Supervisory Authority (European Securities and Markets Authority), amending 
Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 
84). 

EN 

22 

   EN 

                                                 
dispute resolution (ADR) procedures should be established between PEPP providers or 
distributors  and  PEPP  customers  for  resolving  disputes  arising  from  the  rights  and 
obligations set out in this Regulation.  

(46)  With  a  view  to  establishing  an  efficient  and  effective  dispute  resolution  procedure, 
PEPP providers and distributors should put in place an effective complaints procedure 
that can be followed by their customers before the dispute is referred to be resolved in 
an ADR procedure or before a court. The complaints procedure should contain short 
and clearly defined timeframes within which the PEPP provider or distributor should 
reply  to  a  complaint.  ADR  entities  should  have  sufficient  capacity  to  engage  in  an 
adequate  and  efficient  way  in  cross-border  cooperation  with  regard  to  disputes 
concerning rights and obligations pursuant to this Regulation. 

(47) 

In  order  to  find  better  conditions  for  their  investments,  thus  also  stimulating  the 
competition  among  PEPP  providers,  PEPP  savers  should  have  the  right  to  switch 
providers during the accumulation and the decumulation phases, through a clear, quick 
and safe procedure. 

(48)  The switching process should be straightforward for the PEPP saver. Accordingly, the 
receiving PEPP provider should be responsible for initiating and managing the process 
on behalf of the PEPP saver. PEPP providers should be able to use additional means, 
such  as  a  technical  solution,  on  a  voluntary  basis  when  establishing  the  switching 
service.  

(49)  Before giving the authorisation for switching, the PEPP saver should be informed of 

all the steps of the procedure necessary to complete the switching. 

(50)  The  cooperation  of  the  transferring  PEPP  provider  is  necessary  in  order  for  the 
switching to be successful. Therefore, the receiving PEPP provider should be provided 
by  the  transferring  PEPP  provider  with  all  the  information  necessary  to  reinstate  the 
payments  on  the  other  PEPP  account.  However,  such  information  should  not  exceed 
what is necessary in order to carry out the switching. 

(51) 

In order to facilitate cross-border switching, the PEPP saver should be allowed to ask 
the new PEPP provider to provide the PEPP saver with information giving details of 
the  new  PEPP  account,  preferably  within  a  single  meeting  with  the  new  PEPP 
provider. 

(52)  PEPP savers should not be subject to financial losses, including charges and interest, 
caused  by  any  mistakes  made  by  either  of  the  PEPP  providers  involved  in  the 
switching  process.  In  particular,  PEPP  savers  should  not  bear  any  financial  loss 
deriving from the payment of additional fees, interest or other charges as well as fines, 
penalties or any other type of financial detriment due to delay in the execution of the 
switching. 

(53)  PEPP savers should be given the freedom to decide upon subscription of a PEPP about 
their  pay-out  choice  (annuities,  lump  sum,  or  other)  in  the  decumulation  phase,  but 
with a possibility to revise their choice once every five years thereafter, in order to be 
able to best adapt their pay-out choice to their needs when they near retirement.  

(54)  PEPP providers should be allowed to make available to PEPP savers a wide range of 
decumulation options. This  approach would achieve the goal  of enhanced take-up of 
the  PEPP  through  increased  flexibility  and  choice  for  PEPP  savers.  It  would  allow 
providers  to  design  their  PEPPs  in  the  most  cost-effective  way.  It  is  coherent  with 
other  EU  policies  and  politically  feasible,  as  it  preserves  enough  flexibility  for 
Member States to decide about which decumulation options they wish to encourage.   

EN 

23 

   EN 

(55)  Full  transparency  on  costs  and  fees  related  to  the  investment  in  a  PEPP  should  be 
guaranteed.  A  level-playing  field  between  providers  would  be  established,  whilst 
ensuring  consumer  protection.  Comparative  information  would  be  available  between 
different products, thus incentivising competitive pricing.  

(56)  Although  the  ongoing  supervision  of  PEPP  providers  is  to  be  exercised  by  the 
respective  competent  national  authorities,  EIOPA  should  coordinate  the  supervision 
with regards to PEPPs, in order to guarantee the application of a unified supervisory 
methodology,  contributing  in  this  way  to  the  pane-European  nature  of  the  pension 
product.  

(57)  EIOPA should cooperate with national competent authorities and facilitate cooperation 
between  them.  In  this  respect,  EIOPA  should  play  a  role  in  the  power  of  competent 
national authorities to apply supervisory measures by providing evidence about PEPP-
related  infringements.  EIOPA  should  also  provide  binding  mediation  in  the  event  of 
disagreement between competent authorities in cross-border situations. 

(58) 

(59) 

In  order  to  ensure  compliance  with  the  provisions  of  this  Regulation  by  financial 
undertakings that manufacture PEPP, as well as by financial undertakings and persons 
that distribute PEPP, and to ensure that they are subject to similar treatment across the 
Union, administrative sanctions and other measures which are effective, proportionate 
and dissuasive should be provided.  

In  line  with  the  Commission  Communication  of  8  December  2010  "Reinforcing 
sanctioning regimes in the financial services sector"38 and in order to ensure that the 
requirements  of this Regulation are fulfilled, it is  important that  Member States take 
necessary  steps  to  ensure  that  infringements  of  this  Regulation  are  subject  to 
appropriate administrative penalties and measures. 

(60)  Although Member States may lay down rules for administrative and criminal penalties 
for the same infringements, Member States should not  be required to lay down rules 
for administrative penalties for the infringements of this Regulation which are subject 
to  national  criminal  law.  However,  the  maintenance  of  criminal  penalties  instead  of 
administrative  penalties  for  infringements  of  this  Regulation  should  not  reduce  or 
otherwise affect the ability of competent authorities to cooperate, access and exchange 
information in a timely way with competent authorities in other Member States for the 
purposes of this Regulation, including after any referral of the relevant infringements 
to the competent judicial authorities for criminal prosecution. 

(61)  Competent authorities should be empowered to impose pecuniary sanctions which are 
sufficiently high to offset the actual or potential profits, and to be dissuasive even for 
larger financial undertakings and their managers. 

(62) 

In  order  to  ensure  a  consistent  application  of  sanctions  across  the  Union,  the 
competent  authorities  should  take  into  account  all  relevant  circumstances  when 
determining  the  type  of  administrative  sanctions  or  other  measures  and  the  level  of 
administrative pecuniary sanctions. 

(63) 

In  order  to  ensure  that  decisions  on  breaches  and  penalties  by  competent  authorities 
have a dissuasive effect on the public at large and  to strengthen consumer protection 
by  warning  them  about  PEPPs  distributed  in  infringement  of  this  Regulation,  those 

38 

Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions "Reinforcing sanctioning regimes 
in the financial services sector", 8 December 2010, COM(2010) 716 final. 

EN 

24 

   EN 

                                                 
decisions should be published, provided that the time period for lodging an appeal has 
passed  and  no  appeal  was  lodged,  unless  such  disclosure  jeopardises  the  stability  of 
financial markets or an ongoing investigation.  

(64) 

In  order  to  detect  potential  breaches,  the  competent  authorities  should  have  the 
necessary investigatory powers, and should establish effective mechanisms, to enable 
reporting of potential or actual breaches. 

(65)  This Regulation should be without prejudice to any provisions in the laws of Member 

States in respect of criminal offences.  

(66)  Any processing of personal data carried out within the framework of this Regulation, 
such  as  the  exchange  or  transmission  of  personal  data  by  the  competent  authorities 
should be undertaken in accordance with Regulation (EU) 2016/679 of the European 
Parliament and of the Council39 and any exchange or transmission of information by 
the ESAs should be undertaken in accordance with Regulation (EC) No 45/2001 of the 
European Parliament and of the Council40.  

(67)  Tax incentives can take different forms and play an important role in encouraging the 
take-up of personal pension products ((PPPs) in a number of Member States. In many 
Member States the contributions paid for PPPs qualify for some form of tax relief, be 
it explicit or implicit. 

(68)  This  Regulation  should  not  be  understood  as  obliging  Member  States  to  apply  to 
PEPPs  the  same  tax  rules  as  they  would  apply  to  comparable  personal  pension 
products under their national laws. However, in application of the national treatment 
principle, stemming from Articles 21 and 45 of the TFEU and interpreted by the Court 
of Justice of the European Union, it should be possible for a PEPP that is objectively 
comparable to a personal pension product (PPP) distributed in a given Member State 
to  benefit  from  the  same  tax  relief  granted  to  the  PPP  in  this  Member  State,  if  the 
PEPP  saver  there  is  subject  to  tax.  This  also  applies  if  the  PEPP  is  provided  by  a 
provider from another Member State. 

(69)  Following  the  launch  of  the  PEPP,  Member  States  are  encouraged  to  take  into 
consideration Commission Recommendation (EU) 2017/… and to extend the benefits 
of the tax advantages they grant to national PPPs also to the PEPP.  

(70)  An evaluation of this Regulation is to be be carried out, inter alia,  by assessing market 
developments, such as the emergence of new types of PEPPs, as well as developments 
in other areas of Union law and the experiences of Member States.  

(71)  This Regulation respects fundamental rights and observes the principles recognised in 
particular  by  the  Charter  of  the  Fundamental  Rights  of  the  European  Union,  in 
particular the right to the protection of personal data, the right to property, the freedom 
to  conduct  a  business,  the  principle  of  equality  between  men  and  women  and  the 
principle of a high level of consumer protection. 

39 

40 

Regulation  (EU)  2016/679  of  the  European  Parliament  and  of  the  Council  of  27  April  2016  on  the 
protection of natural persons with regard to the processing of personal data and on the free movement of 
such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, 
p. 1). 
Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on 
the  protection  of  individuals  with  regard  to  the  processing  of  personal  data  by  the  Community 
institutions and bodies and on the free movement of such data (OJ L 8, 12.1.2001, p. 1). 

EN 

25 

   EN 

                                                 
(72)  Since the objectives of this Regulation, namely to enhance PEPP saver protection and 
improve  PEPP  saver  confidence  in  PEPPs,  including  where  those  products  are 
distributed cross-border, cannot be sufficiently achieved by the Member States but can 
rather, by reason of its effects, be better achieved at Union level the Union may adopt 
measures,  in  accordance  with  principle  of  subsidiarity  as  set  out  in  Article  5  of  the 
Treaty of the European Union. In accordance with the principle of proportionality, as 
set out in that Article, this Regulation does not go beyond what is necessary in order to 
achieve those objectives. 

HAVE ADOPTED THIS REGULATION: 

CHAPTER I 

GENERAL PROVISIONS 

Article 1 
Subject matter 

This Regulation lays down uniform rules on the authorisation, manufacturing, distribution and 
supervision  of  personal  pension  products  that  are  distributed  in  the  Union  under  the 
designation "pan-European Personal Pension product" or "PEPP".  

Article 2 
Definitions 

For the purposes of this Regulation, the following definitions apply: 

(1)  

"personal pension product" means a product which: 

(a)  

is based on a contract between an individual saver and an entity on a voluntary 
basis; 

(b)   has an explicit retirement objective; 

(c)   provides  for  capital  accumulation  until  retirement  with  only 

limited 

possibilities for early withdrawal before retirement; 

(d)   provides an income on retirement; 

(2)  

"pan-European  Personal  Pension  Product  (PEPP)"  means  a  long-term  savings 
personal  pension  product,  which  is  provided  under  an  agreed  PEPP  scheme  by  a 
regulated financial undertaking authorised under Union law to manage collective or 
individual  investments  or  savings,  and  subscribed  to  voluntarily  by  an  individual 
PEPP saver in view of retirement, with no or strictly limited redeemability; 

(3)  

"PEPP saver" means: 

(a)   a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU 

of the European Parliament and of the Council41;  

41 

Directive 2014/65/EU  of  the European Parliament  and of  the  Council of 15  May 2014 on  markets  in 
financial  instruments  and  amending  Directive  2002/92/EC  and  Directive  2011/61/EU  (OJ  L  173 
12.6.2014, p. 349). 

EN 

26 

   EN 

 
 
                                                 
(b)   a  customer  within  the  meaning  of  Directive  2002/92/EC  of  the  European 
Parliament  and  of  the  Council42,  where  that  customer  would  not  qualify  as  a 
professional  client  as  defined  in  point  (10)  of  Article  4(1)  of  Directive 
2014/65/EU;  

"PEPP  scheme"  means  a  contract,  an  agreement,  a  trust  deed  or  rules  stipulating 
which retirement benefits are granted and under which conditions on the basis of an 
individual retirement savings plan agreed with a PEPP provider; 

"PEPP account" means a personal pension account held in the name of a PEPP saver 
or  a  PEPP  beneficiary  which  is  used  for  the  execution  of  transactions  allowing  the 
PEPP  saver  to  contribute  periodically  sums  towards  his  retirement  and  the  PEPP 
beneficiary to receive his retirement benefits; 

"PEPP provision" means the manufacturing and distribution of a PEPP; 

"PEPP beneficiary" means a person receiving PEPP retirement benefits; 

"PEPP  distribution"  means  the  activities  of  advising  on,  proposing,  or  carrying  out 
other  work  preparatory  to  the  conclusion  of  contracts  for  providing  a  PEPP,  of 
concluding  such  contracts,  or  of  assisting  in  the  administration  and  performance  of 
such  contracts,  including  the  provision  of  information  concerning  one  or  more 
pension contracts in accordance with criteria selected by PEPP customers through a 
website  or  other  media  and  the  compilation  of  a  pension  product  ranking  list, 
including  price  and  product  comparison,  or  a  discount  on  the  price  of  a  pension 
contract, when the PEPP customer is able to directly or indirectly conclude a pension 
contract using a website or other media; 

"PEPP  retirement  benefits"  means  benefits  paid  by  reference  to  reaching,  or  the 
expectation  of  reaching,  retirement.  These  benefits  may  take  the  form  of  payments 
for  life,  payments  made  for  a  temporary  period,  a  lump  sum,  or  any  combination 
thereof; 

"accumulation  phase"  means  the  period  during  which  assets  (in-payments)  are 
accumulated in a PEPP account and normally runs until the age of retirement of the 
PEPP beneficiary; 

"decumulation phase" means the period during which assets accumulated in a PEPP 
account are drawn upon to fund retirement or other income requirements; 

"annuity" means a sum payable at specific intervals over a period, such as the PEPP 
beneficiary's life or a certain number of years, in return for an investment; 

"drawdown  payments"  means  the  possibility  for  the  PEPP  beneficiaries  to  draw 
discretionary amounts, up to a certain limit on a periodic basis; 

"provider of a PEPP" or "PEPP provider" means a financial undertaking authorised 
to manufacture a PEPP and distributing it; 

"distributor  of  a  PEPP"  or  "PEPP  distributor"  means  a  financial  undertaking 
authorised  to  distribute  PEPPs  not  manufactured  by  it,  as  well  as  an  insurance, 
reinsurance or ancillary insurance intermediary; 

(4) 

(5)  

(6) 

(7)  

(8)  

(9)  

(10)  

(11)  

(12)  

(13)  

(14)  

(15)  

(16)  

"durable medium" means any instrument which: 

42 

Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002 on insurance 
mediation (OJ L 009 15.1.2003, p. 3). 

EN 

27 

   EN 

                                                 
(a)   enables  a  PEPP  customer  to  store  information  addressed  personally  to  that 
customer  in  a  way  accessible  for  future  reference  and  for  a  period  of  time 
adequate for the purposes of the information; and 

(b)   allows the unchanged reproduction of the information stored;  

"competent  authorities"  of  the  PEPP  providers  means  the  national  authorities 
designated by each Member State to supervise PEPP providers; 

"home Member State of the PEPP provider" means the Member State in which the 
PEPP provider has its registered office; 

"host  Member  State  of  the  PEPP  provider"  means  a  Member  State,  other  than  the 
home Member State, in which a PEPP provider manufactures or distributes PEPPs; 

"compartment"  means  a  section  which  is  opened  within  each  individual  PEPP 
account  and  which  corresponds  to  the  legal  requirements  and  conditions  for  using 
incentives fixed at national level for investing in a PEPP by the Member State of the 
PEPP saver's domicile. Accordingly, an individual may be a PEPP saver or a PEPP 
beneficiary in each compartment, depending on the respective legal requirements for 
the accumulation and decumulation phases; 

"capital"  means  aggregate  capital  contributions  and  uncalled  committed  capital, 
calculated on the basis of amounts investible after deduction of all fees, charges and 
expenses that are directly or indirectly borne by investors; 

"financial instrument" means those instruments specified in Section C of Annex I of 
Directive 2014/65/EU;  

"depositary"  means  an  institution  charged  with  the  safe-keeping  of  assets  and 
oversight of compliance with the fund rules and applicable law; 

"default  investment  option"  means  an  investment  strategy  applied  when  the  PEPP 
saver  has  not  provided  instructions  on  how  to  invest  the  funds  accumulating  in  his 
PEPP account;  

"risk  mitigation  techniques"  means  techniques  for  a  systematic  reduction  in  the 
extent of exposure to a risk and/or the likelihood of its occurrence; 

"switching providers" means, upon a PEPP customer’s request, transferring from one 
PEPP provider to another any positive balance from one PEPP account to the other, 
with or without closing the former PEPP account; 

"advice" means the provision of a personal recommendation to a PEPP saver, either 
upon his request or at the initiative of the PEPP provider or distributor, in respect of 
one or more contracts for subscribing PEPP; 

(17)  

(18)  

(19)  

(20)  

(21)  

(22)  

(23)  

(24)  

(25)  

(26)  

(27)  

(28)  

"PEPP  customer"  means  a  PEPP  saver,  a  prospective  PEPP  saver  and/or  a  PEPP 
beneficiary.  

The provision of PEPPs shall be subject to: 

Article 3 
Applicable rules 

(a)  

(b)  

EN 

this Regulation, 

where authorised by this Regulation, the provisions of the contract for the provision 
of a PEPP concluded between a PEPP saver and a PEPP provider,  

28 

   EN 

(c)  

in  the case of  matters not  regulated by this Regulation  or, where  matters are  partly 
regulated by it, of those aspects not covered by it, by: 

(i) 

(ii) 

the  provisions  of  laws  adopted  by  Member  States  in  implementation  of  EU 
measures relating specifically to the PEPP; 

the  provisions  of  Member  States'  laws  which  would  apply  to  a  comparable 
personal pension product manufactured and distributed in accordance with the 
law of the Member State in which the manufacturer has its registered office. 

CHAPTER II  
AUTHORISATION  

Article 4 
Authorisation 

1. 

2. 

A PEPP  may only  be manufactured and distributed in the Union where it has been 
authorised by EIOPA in accordance with this Regulation.  

Authorisation  of  a  PEPP  shall  be  valid  in  all  Member  States.  It  entitles  the 
authorisation holder to manufacture and distribute the PEPP as authorised by EIOPA. 

Article 5 
Application for authorisation of a PEPP 

1. 

Only the following financial undertakings may apply for authorisation of a PEPP: 

(a)   credit  institutions  authorised  in  accordance  with  Directive  2013/36/EU  of  the 

European Parliament and of the Council43; 

(b) 

(c) 

(d) 

(e) 

insurance  undertakings  authorised  in  accordance  with  Directive  2009/138/EC 
of  the  European  Parliament  and  of  the  Council44,  engaged  in  direct  life 
insurance according to Article 2(3) and Annex II of Directive 2009/138/EC; 

institutions  for  occupational  retirement  provision  registered  or  authorised  in 
accordance  with  Directive  2016/2341/EU  of  the  European  Parliament  and  of 
the Council45; 

investment  firms  authorised  in  accordance  with  Directive  2014/65/EU, 
engaged in portfolio management or investment advice; 

investment  companies  or  management  companies  authorised  in  accordance 
with Directive 2009/65/EC of the European Parliament and of the Council46; 

43 

44 

45 

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the 
activity of credit institutions and the prudential supervision of credit institutions and investment firms, 
amending  Directive  2002/87/EC  and  repealing  Directives  2006/48/EC  and  2006/49/EC  (OJ  L  176, 
27.6.2013, p. 338). 
Directive  2009/138/EC  of  the  European  Parliament  and  of  the  Council  of  25  November  2009  on  the 
taking-up  and  pursuit  of  the  business  of  Insurance  and  Reinsurance  (Solvency  II)  (OJ  L 
335, 17.12.2009, p. 1). 
Directive 2016/2341/EU of the European Parliament and of the Council of 14 December 2016 on the 
activities  and  supervision  of  institutions  for  occupational  retirement  provision  (IORPs)  (recast)  (OJ 
L 354, 23.12.2016, p. 37). 

EN 

29 

   EN 

 
                                                 
(f) 

alternative  investment  fund  ("AIF")  managers  authorised  in  accordance  with 
Directive 2011/61/EU of the European Parliament and of the Council47. 

2. 

Financial  undertakings  listed  in  paragraph  1  shall  submit  their  applications  for 
authorisation of a PEPP to EIOPA. The application shall include the following:  

(a)  

information on standard contract terms to be proposed to PEPP savers;  

(b)  

(c)  

(d) 

(e) 

information  on  the  identity  of  the  applicant  and  its  current  and  previous 
financial experience and history;  

the  identity  of  the  persons  who  effectively  conduct  the  business  of 
manufacturing and/or distributing the PEPP; 

information  on  arrangements  regarding  portfolio  and  risk  management  and 
administration with regard to the PEPP;  

information  about  the  investment  strategies,  the  risk  profile  and  other 
characteristics of the PEPP;  

(f)   a list of Member States where the applicant PEPP intends to market the PEPP;  

(g)  

information on the identity of the depositary, if applicable;  

(h)   a description of the information to be made available to PEPP savers, including 
a  description  of  the  arrangements  for  dealing  with  complaints  submitted  by 
PEPP savers; 

(i)   proof of the authorisation or registration of the applicant in accordance with the 
applicable Union legislative act referred to in paragraph 1 and information on 
the identity of the competent authority which granted it. 

EIOPA  may  request  clarification  and  additional  information  as  regards  the 
documentation and information provided under paragraph 1.  

EIOPA may ask the competent authority of the financial undertaking applying for the 
authorisation for clarification and information as regards the documentation referred 
to  in  paragraph  2.  The  competent  authority  shall  reply  to  the  request  within  10 
working  days  from  the  date  on  which  it  has  received  the  request  submitted  by 
EIOPA.  

Any  subsequent  modifications  to  the  documentation  and  information  referred  to  in 
paragraphs 1 and 2 shall be immediately notified to EIOPA.  

Article 6 
Conditions for granting authorisation of PEPPs 

Within  two  months  from  the  date  of  submission  of  a  complete  application,  EIOPA 
shall  grant  authorisation  of  the  PEPP  only  where  EIOPA  is  fully  satisfied  that  the 
following conditions are met: 

(a) 

the applicant complies with this Regulation; 

Directive  2009/65/EC  of  the  European  Parliament  and  of  the  Council  of  13  July  2009  on  the 
coordination  of  laws,  regulations  and  administrative  provisions  relating  to  undertakings  for  collective 
investment in transferable securities (UCITS) (recast) (OJ L 302, 17.11.2009, p. 32). 
Directive  2011/61/EU  of  the  European  Parliament  and  of  the  Council  of  8  June  2011  on  Alternative 
Investment  Fund  Managers  and  amending  Directives  2003/41/EC  and  2009/65/EC  and  Regulations 
(EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, p. 1). 

3. 

4. 

5. 

1. 

46 

47 

EN 

30 

   EN 

                                                                                                                                                         
(b) 

(c) 

(d) 

the applicant is authorised by its competent authority to manufacture products 
that follow investment strategies of the type covered by this Regulation; 

the proposed PEPP meets all the requirements of this Regulation;  

the  proposed  PEPP  is  based  on  an  investment  strategy  that  allows  for  the 
retirement outcome contained in the proposed contractual rules.  

Before  taking  a  decision  on  the  application,  EIOPA  shall  consult  the  competent 
authority of the applicant. 

EIOPA  shall  communicate  to  the  applicant  the  reasons  for  any  refusal  to  grant 
authorisation of a PEPP. 

EIOPA  shall  withdraw  the  authorisation  of  a  PEPP  in  the event  that the conditions 
for granting this authorisation are no longer fulfilled. 

EIOPA shall, on a quarterly basis, inform the competent authorities of the financial 
undertakings  listed  in  Article  5(1)  of  decisions  to  grant,  refuse  or  withdraw 
authorisations pursuant to this Regulation. 

EIOPA shall ensure co-ordination with and transmit information for the purposes of 
the  exercise  of  their  respective  tasks  to  the  European  Supervisory  Authority 
(European  Banking  Authority)  established  by  Regulation  (EU)  No  1093/2010  and 
the  European  Supervisory  Authority  (European  Securities  and  Markets  Authority) 
established by Regulation (EU) No 1095/2010. 

Article 7 
Designation and conversion 

The designation "PEPP" or "pan-European Personal Pension Product" in relation to a 
personal pension product may only be used where the personal pension product has 
been  authorised  by  EIOPA  to  be  distributed  under  the  designation  "PEPP"  in 
accordance with this Regulation.  

Existing  personal  pension  products  may  be  converted  into  "PEPPs"  following 
authorisation by EIOPA. 

PEPP providers shall not convert "PEPPs" into personal pension products that are not 
covered by this Regulation.  

Article 8 
Distribution of PEPP 

Financial  undertakings  referred to  in  Article  5(1)  may  distribute  PEPPs which  they 
have  not  manufactured  upon  receiving  authorisation  for  distribution  by  the 
competent authorities of their home Member State. 

Insurance intermediaries registered in accordance with Directive 2016/97/EU of the 
European Parliament and of the Council48 are entitled to distribute PEPPs which they 
have not manufactured. 

Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance 
distribution (OJ L 26, 2.2.2016, p. 19). 

2. 

3. 

4. 

5. 

6. 

1. 

2. 

3. 

1. 

2. 

48 

EN 

31 

   EN 

                                                 
Article 9 
Prudential regime applicable to different types of providers 

PEPP  providers  and  PEPP  distributors  shall  comply  at  all  times  with  the  provisions  of  this 
Regulation, as  well as with  the relevant prudential regime  applicable to them in  accordance 
with the legislative acts referred to in Article 5(1). 

Article 10 
Central public register 

EIOPA  shall  keep  a  central  public  register  identifying  each  PEPP  authorised  under  this 
Regulation, the provider of this PEPP and the competent authority of the PEPP provider. The 
register shall be made publicly available in electronic format. 

CHAPTER III 
CROSS-BORDER PROVISION AND PORTABILITY OF PEPP 

SECTION I 
FREEDOM TO PROVIDE SERVICES AND FREEDOM OF 
ESTABLISHMENT 

Article 11 
Exercise of the freedom to provide services and freedom of establishment by PEPP 
providers and distributors 

PEPP providers may provide and PEPP distributors may distribute PEPPs within the territory 
of  a  host  Member  State  under  the  freedom  to  provide  services  or  the  freedom  of 
establishment,  provided  they  do  so  in  compliance  with  the  relevant  rules  and  procedures 
established by or under the Union legislative acts applicable to them as referred to in Article 
5(1) or 8(2).  

 SECTION II 
PORTABILITY 

Article 12 
The portability service 

1. 

2. 

The  portability  service  allows  PEPP  savers  to  continue  contributing  to  the  PEPP 
which they have already contracted with its provider, while changing their domicile 
by moving to another Member State.  

In  case  of  using  the  portability  service,  PEPP  savers  are  entitled  to  retain  all 
advantages  and  incentives  granted  by  the  PEPP  provider  and  connected  with 
continuous investment in the same PEPP. 

EN 

32 

   EN 

 
 
Article 13 
Provision of the portability service 

1. 

2. 

3. 

PEPP providers shall provide the portability service to PEPP savers holding a PEPP 
account with them and requesting this service.  

When  proposing  a  PEPP,  the  PEPP  provider  or  PEPP  distributor  shall  provide 
potential  PEPP  savers  with  information  on  which  national  compartments  are 
immediately available. 

Three years at the latest after the entry into application of this Regulation, each PEPP 
shall  offer  national  compartments  for  all  Member  States  upon  request  addressed  to 
the PEPP provider. 

Article 14 
Compartments of the PEPP  

Without prejudice to the deadline under Article 13(3), PEPP providers shall ensure that within 
each  individual  PEPP  account  a  new  compartment  could  be  opened,  corresponding  to  the 
legal requirements and conditions for using incentives fixed at national level for the PEPP by 
the Member State to which the PEPP saver moves. 

1. 

2. 

3. 

4. 

Article 15 
Opening of a new compartment  

Without  prejudice  to  the  deadline  under  Article  13(3),  immediately  after  being 
informed about the PEPP saver's intention to exercise his right of mobility between 
Member States, the PEPP provider shall inform the PEPP saver about the possibility 
to open a new compartment within the PEPP saver's individual account and about the 
deadline within which such compartment could be opened.  

To  make  use  of  this  possibility,  the  PEPP  saver  shall  send  to  the  PEPP  provider  a 
request, which shall include the following information: 

(a)  

the PEPP saver's new Member State of domicile; 

(b)  

the  date  from  which  the  investments  should  be  directed  to  the  newly-opened 
compartment; 

(c)   any  relevant  information  about  possible  modifications  in  the  adopted 

investment strategy or other elements. 

Not later than three months following the reception of the request under paragraph 2, 
the  PEPP  provider  shall  provide  the  PEPP  saver  with  complete  information  free  of 
charge  and  advice  under  Chapter  IV,  Sections  II  and  III  regarding  the  conditions 
applicable to the new compartment.  

The new compartment shall be opened by signing a new contract, or  amending the 
existing one, between the PEPP saver and the PEPP provider, in compliance with the 
applicable contract law. The date of opening shall be defined in the contract or, in the 
absence of such stipulation, the new compartment shall be deemed opened at the date 
of signing the contract or the amendment thereto. 

EN 

33 

   EN 

1. 

2. 

1. 

2. 

Article 16 
Transfer of accumulated rights between the compartments of the PEPP  

At the request of the PEPP saver, the PEPP provider shall propose to the PEPP saver 
to arrange for transfer of accumulated assets between different compartments of the 
individual  PEPP  account,  so  that  all  assets  could  be  consolidated  in  one 
compartment.  

The transfer of assets under paragraph 1 shall be made possible without redemption 
in kind of these assets. 

Article 17 
Provision of information on portability to the national authorities  

All contractual arrangements for providing the portability service shall be notified by 
the  PEPP  provider  to  the  respective  national  authority  exercising  prudential 
supervision over it. 

The information under paragraph 1 shall be filed electronically in a central database 
held  with  the  national  supervisory  authority  within  one  month  of  opening  the  new 
compartment and shall contain at least: 

(a)  

identification of the compartment (name of the PEPP saver; applicable national 
legislation; date of opening the compartment); 

(b)   amount of the transferred assets, if any; 

(c)   way of transfer (with or without redemption in kind of the transferred assets). 

CHAPTER IV 
DISTRIBUTION AND INFORMATION REQUIREMENTS 

SECTION I 
GENERAL PROVISIONS 

Article 18 
General principle 

When  carrying  out  distribution  activities  for  PEPPs,  PEPP  providers  and  PEPP  distributors 
shall  always  act  honestly,  fairly  and  professionally  in  accordance  with  the  best  interests  of 
their customers. 

Article 19 
Distribution regime applicable to different types of PEPP providers and distributors 

For  the  distribution  of  PEPPs,  the  different  types  of  PEPP  providers  and  distributors  shall 
comply with the following rules:  

(a) 

insurance  distributors  as  defined  in  point  (8)  of  Article  2(1)  of  Directive  (EU) 
2016/97 shall comply with the applicable national laws giving effect to the rules set 
out  in  Chapters  V  and  VI  of  that  Directive  for  the  distribution  of  insurance-based 
investment  products,  with  any  directly  applicable  Union  legislation  adopted  under 

EN 

34 

   EN 

 
(b) 

those rules with respect to the distribution of such products and with the provisions 
of Articles 18, 19, 21 to 23, and 27 to 32 of this Chapter; 

investment firms as defined in point (1) of Article 4(1) of Directive 2014/65/EU shall 
comply  with  the  applicable  national  legislation  laws  giving  effect  to  the  rules  on 
marketing and distribution of financial instruments set out in the first subparagraph 
of Article 16(3) of that Directive, in Articles 23, 24 and 25 of that Directive, with any 
directly  applicable  Union  legislation  adopted  under  those  provisions,  and  with  the 
provisions of Articles 18, 19, 21 to 23, and 27 to 32 of this Chapter; 

(c) 

all other PEPP providers and distributors shall comply with the all the provisions of 
this Chapter. 

Article 20 
Inducements 

With regard to the payment or reception of fees or commissions or the provision or reception 
of  non-monetary  benefits  in  connection  with  the  distribution  of  a  PEPP  to  or  by  any  party 
except  the  PEPP  saver  or  a  person  acting  on  behalf  of  the  PEPP  saver,  PEPP  providers  or 
distributors  referred  to  in  Article  19(c)  of  this  Regulation  shall  comply  with  the  applicable 
national laws giving effect to the rules set out for investment firms in Article 24(7)(b) and (9) 
of  Directive  2014/65/EU.  For  the  purposes  of  this  Article,  the  reference  in  Article  24(9)  of 
Directive 2014/65/EC to Article 23 of that Directive shall be read as a reference to Article 18 
of this Regulation. 

Article 21 
Electronic distribution and other durable mediums 

All  documents  and  information  under  this  Chapter  shall  be  provided  to  PEPP  customers 
electronically, provided that the PEPP customer is enabled to store such information in a way 
accessible  for  future  reference  and  for  a  period  of  time  adequate  for  the  purposes  of  the 
information  and  that  the  tool  allows  the  unchanged  reproduction  of  the  information  stored. 
Upon request, PEPP providers and distributors shall provide free of charge those documents 
and information also on another durable medium. 

Article 22 
Product oversight and governance requirements 

1. 

PEPP providers shall maintain, operate and review a process for the approval of each 
PEPP, or significant adaptations of an existing PEPP, before it is distributed to PEPP 
customers. 

The product approval process shall be proportionate and appropriate to the nature of 
the PEPP. 

The product approval process shall specify an identified target market for each PEPP, 
ensure that all relevant risks to such identified target market are assessed and that the 
intended distribution strategy is consistent with the identified target market, and take 
reasonable steps to ensure that the PEPP is distributed to the identified target market. 

The  PEPP  provider  shall  understand  and  regularly  review  the  PEPPs  it  provides, 
taking  into  account  any  event  that  could  materially  affect  the  potential  risk  to  the 
identified target market, to assess at least whether the PEPPs remain consistent with 

EN 

35 

   EN 

 
2. 

1. 

2. 

3. 

the  needs  of  the  identified  target  market  and  whether  the  intended  distribution 
strategy remains appropriate. 

PEPP providers shall make available to PEPP distributors all appropriate information 
on the PEPP and the product approval process, including the identified target market 
of the PEPP. 

PEPP  distributors  shall  have  in  place  adequate  arrangements  to  obtain  the 
information referred to in the fifth subparagraph and to understand the characteristics 
and identified target market of each PEPP. 

The policies, processes and arrangements referred to in this Article shall be without 
prejudice  to  all  other  requirements  under  or  applying  by  virtue  of  this  Regulation 
including  those  relating  to  disclosure,  suitability  or  appropriateness,  identification 
and management of conflicts of interest, and inducements. 

SECTION II 
PRE-CONTRACTUAL INFORMATION  

Article 23 
PEPP key information document 

Before a PEPP is proposed to PEPP savers, the PEPP provider shall draw up for that 
product  a  PEPP  key  information  document  in  accordance  with  the  requirements  of 
this Chapter and shall publish the document on its website. 

PEPP providers and PEPP distributors shall comply with Articles 5(2), and 6 to 18 of 
Regulation (EU) No 1286/2014.  

In  addition  to  the  information  set  out  in  Article  8(3)(c)  of  Regulation  (EU)  No 
1286/2014,  the  section  titled  “What  is  this  product?”  shall  contain  the  following 
information:  

(i) 

a  description  of  the  retirement  benefits  and  the  extent  to  which  they  are 
guaranteed; 

(ii) 

any minimum or maximum period for belonging to the PEPP scheme; 

(iii) 

the retirement age; 

(iv)  general  information  on  the  portability  service,  including  information  on  the 

compartments; 

(v)  general  information  on  the  switching  service,  and  a  reference  to  the  specific 

information about the switching service available under Article 50; 

(vi)   available  information  related  to  the  performance  of  the  investment  policy  in 

terms of environmental, social and governance factors; 

(vii)  the  law  applicable  to  the  PEPP  contract  where  the  parties  do  not  have  a  free 
choice  of  law  or,  where  the  parties  are  free  to  choose  the  applicable  law,  the 
law that the PEPP provider proposes to choose. 

4. 

In  addition  to  the  PEPP  key  information  document,  PEPP  providers  and  PEPP 
distributors shall provide potential PEPP savers with references to any reports on the 
solvency and financial condition of the PEPP provider, allowing them easy access to 
this information. 

EN 

36 

   EN 

5. 

6. 

1. 

2. 

3. 

Potential  PEPP  savers  shall  also  be  provided  with  information  on  the  past 
performance of investments related to the PEPP scheme covering a minimum of five 
years, or, where the scheme has been operating for fewer than five years, covering all 
the  years  that  the  scheme  has  been  operating,  as  well  as  with  information  on  the 
structure of costs borne by PEPP savers and PEPP beneficiaries. 

In  order  to  ensure  consistent  application  of  this  Article,  the  European  Supervisory 
Authorities  (European  Banking  Authority,  European  Securities  and  Markets 
Authority  and  EIOPA)  ("ESAs")  shall,  through  the  Joint  Committee  of  the  ESAs, 
develop  draft  implementing  technical  standards  specifying  the  details  of  the 
presentation  and  the  content  of  each  of  the  elements  of  information  referred  to  in 
paragraphs  3  and  4,  together  with  the  requirements  needed  to  present  that 
information in a standardised format allowing for comparison. 

When developing the draft implementing technical standards the ESAs shall take into 
account  the  various  types  of  PEPPs,  the  differences  between  them  and  the 
capabilities of  PEPP  savers  as  well  as  the  features  of  the  PEPPs  so  as  to  allow  the 
PEPP  saver  to  select  between  different  underlying  investments  or  other  options 
provided  for  by  the  product,  including  where  this  selection  can  be  undertaken  at 
different points in time, or changed in the future. 

The  ESAs  shall  submit  those  draft  implementing  technical  standards  to  the 
Commission by … . 

Power  is  conferred  the  Commission  to  adopt  implementing  technical  standards 
referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) 
No  1093/2010,  of  Regulation  (EU)  No  1094/2010  and  of  Regulation  (EU)  No 
1095/2010. 

Article 24 
Disclosure of information related to distribution 

In  good  time  before  the  conclusion  of  a  PEPP-related  contract,  PEPP  providers  or 
distributors referred to in Article 19(c) of this Regulation shall provide PEPP savers 
or potential PEPP savers with at least the information in relation to the PEPP contract 
and themselves set out in Article 19 and in points (a) and (c) of the first subparagraph 
of  Article  29(1)  of  Directive  (EU)  2016/97  in  relation  to  insurance  contracts  and 
insurance intermediaries. 

The  information  referred  to  in  this  paragraph  1  shall  be  provided  in  a  standardised 
format allowing for comparison and in a comprehensible form in such a manner that 
PEPP  savers  are  reasonably  able  to  understand  the  nature  and  risks  concerning  the 
PEPP offered and, consequently, to take investment decisions on an informed basis. 

The  Commission  shall  be  empowered  to  adopt  delegated  acts  in  accordance  with 
Article 62 in order to specify the criteria on which the standardised format referred to 
in paragraph 2 shall be based. 

EN 

37 

   EN 

SECTION III 
ADVICE AND STANDARDS FOR SALES WHERE NO ADVICE IS GIVEN 

Article 25 
Specification of demands and needs and provision of advice 

Prior to the conclusion of a PEPP-related contract, the PEPP provider or distributor 
referred  to  in  Article  19(c)  of  this  Regulation  shall  specify,  on  the  basis  of 
information  obtained  from  the  PEPP  saver,  the  retirement-related  demands  and  the 
needs  of  that  PEPP  saver  and  shall  provide  the  PEPP  saver  with  objective 
information  about  the  PEPP  in  a  comprehensible  form  to  allow  that  PEPP  saver  to 
make an informed decision. 

Any  contract  proposed  shall  be  consistent  with  the  PEPP  savers’s  retirement 
demands and needs. 

Where advice is provided prior to the conclusion of any specific contract, the PEPP 
provider or distributor referred to in Article 19(c) of this Regulation shall provide the 
PEPP saver with a personalised recommendation explaining why a particular  PEPP 
would best meet the PEPP savers’s demands and needs. 

When  providing  advice  on  PEPPs,  the  PEPP  provider  or  distributor  referred  to  in 
Article 19(c) of this Regulation shall comply with the applicable national laws giving 
effect  to  the  rules  set  out  in  Article  25(2)  of  Directive  2014/65/EU  and  with  any 
directly  applicable  Union  legislation  adopted  under  Article  25(8)  of  that  Directive 
relating to those rules. 

Where a PEPP provider or distributor referred to in Article 19(c) of this Regulation 
informs the PEPP saver that it gives its advice on an independent basis, it shall give 
that  advice  on  the  basis  of  an  analysis  of  a  sufficiently  large  number  of  personal 
pension  products  available  on  the  market  to  enable  it  to  make  a  personal 
recommendation,  in  accordance  with  professional  criteria,  regarding  which  the 
PEPP-related  contract  would  be  adequate  to  meet  the  PEPP  saver’s  needs.  Such 
advice must not be limited to PEPP-related contracts provided by the PEPP provider 
or  distributor  itself,  by  entities  having  close  links  with  the  PEPP  provider  or 
distributor or by other entities with which the PEPP provider or distributor has close 
legal or economic relationships, including contractual relationships, as to pose a risk 
of impairing the independent basis of the advice provided. 

PEPP providers and distributors referred to in Article 19(c) of this Regulation  shall 
ensure  and  demonstrate  to  competent  authorities  on  request  that  natural  persons 
giving  advice  on  PEPPs  possess  the  necessary  knowledge  and  competence  to  fulfil 
their  obligations  under  this  Chapter.  Member  States  shall  publish  the  criteria  to  be 
used for assessing such knowledge and competence. 

1. 

2. 

3. 

4. 

5. 

Article 26 
Concluding a contract for a PEPP without advice 

1. 

Without  prejudice  to  Article  25(1),  the  PEPP  saver  may  waive  his  right  to  receive 
advice in relation to concluding a contract for the default investment option. 

Where  the  PEPP  saver  waives  his  right  to  receive  advice,  PEPP  providers  or 
distributors  referred  to  in  Article  19(c)  of  this  Regulation  shall,  when  carrying  out 
PEPP distribution activities, ask the PEPP saver or potential PEPP saver to provide 

EN 

38 

   EN 

information  regarding  that  person’s  knowledge  and  experience  in  the  investment 
field relevant to the PEPP offered or demanded so as to enable the PEPP provider or 
distributor to assess whether the PEPP envisaged is appropriate for the PEPP saver. 

Where the PEPP provider or distributor referred to in Article 19(c) of this Regulation 
considers, on the basis of the information received under the first subparagraph, that 
the product is not appropriate for the PEPP saver or potential PEPP saver, the PEPP 
provider  or  distributor  shall  warn  the  PEPP  saver  or  potential  PEPP  saver  to  that 
effect. That warning may be provided in a standardised format. 

Where PEPP savers or potential PEPP savers do not provide the information referred 
to in the first subparagraph, or where they provide insufficient information regarding 
their  knowledge  and  experience,  the  PEPP  provider  or  distributor  shall  warn  them 
that it is not in a position to determine whether the PEPP envisaged is appropriate for 
them. That warning may be provided in a standardised format. 

Without  prejudice  to  Article  25(1),  where  the    PEPP  saver  has  waived  his  right  to 
receive  advice  in  relation  to  the  default  investment  option,  the  PEPP  provider  or 
distributor  referred  to  in  Article  19(c)  of  this  Regulation  may  carry  out  PEPP 
distribution  activities  without  the  need  to  obtain  the  information  or  make  the 
determination  provided  for  in  paragraph  1  of  this  Article  where  all  the  following 
conditions are met: 

(a)  

(b)  

(c)  

the activities relate to PEPP contracts concerning the default investment option 
which  only  provide  investment  exposure  to  the  financial  instruments  deemed 
non-complex  under  Article  25(4)(a)  of  Directive  2014/65/EU  and  do  not 
incorporate  a  structure  which  makes  it  difficult  for  the  PEPP  saver  to 
understand the risks involved; 

the distribution of the PEPP is at the initiative of the PEPP saver or potential 
PEPP saver; 

the PEPP saver or potential PEPP saver has been clearly informed that, in the 
provision of the PEPP distribution activity, the PEPP provider or distributor is 
not  required  to  assess  the  appropriateness  of  the  PEPP  or  PEPP  distribution 
activity  provided  or  offered  and  that  the  PEPP  saver  or  potential  PEPP  saver 
does not benefit from the corresponding protection of the relevant conduct of 
business rules. Such a warning may be provided in a standardised format; 

(d)  

the PEPP provider or distributor complies with its obligations under  the rules 
applicable  to  it,  in  accordance  with  this  Chapter,  concerning  conflicts  of 
interest in relation to PEPP distribution activities. 

The  Commission  shall  be  empowered  to  adopt  delegated  acts  in  accordance  with 
Article 62 to further specify how PEPP providers or distributors referred to in Article 
19(c) of this Regulation are to comply with the principles set out in this Article when 
carrying out PEPP distribution activities, including with regard to the information to 
be obtained when assessing the appropriateness of PEPPs for their customers and the 
criteria to assess non-complex PEPP-related contracts for the purposes of point (ii) of 
paragraph 2(a) of this Article. Those delegated acts shall take into account:  

(a)  

the  nature  of  the  services  offered  or  provided  to  the  PEPP  saver  or  potential 
PEPP  saver,  having  regard  to  the  type,  object,  size  and  frequency  of  the 
transactions; and 

2. 

3. 

EN 

39 

   EN 

1. 

2. 

3. 

(b)  

the nature of the products being offered or considered, including different types 
of financial instruments. 

SECTION IV 
INFORMATION DURING THE TERM OF THE CONTRACT 

Article 27 
General provisions 

PEPP  providers  shall  draw  up  a  concise  personalised  document  containing  key 
information  for  each  PEPP  saver  taking  into  consideration  the  specific  nature  of 
national pension systems and of relevant national social, labour and tax law (“PEPP 
Benefit Statement”). The title of the document shall contain the words “PEPP Benefit 
Statement”. 

For the exact date to which the information in the PEPP Benefit Statement refers to, 
the format of information contained in the PEPP Benefit Statement, and the treatment 
of  any  material  change  to  the  information,  Article  38,  paragraphs  2-4  of  Directive 
2016/2341/EU  shall  be  applied  accordingly,  where  for  the  purposes  of  this 
Regulation "Pension Benefit Statement" means PEPP Benefit Statement. 

In  addition,  the  PEPP  saver  shall  be  kept  informed  throughout  the  term  of  the 
contract of any change concerning the following information: 

(a)  

the policy conditions, both general and special; 

(b)  

the name of the PEPP provider’s undertaking, its legal form or the address of 
its  head  office  and,  where  appropriate,  of  the  branch  which  concluded  the 
contract; 

(c)   all the information referred to in Article 23(2) to (5) in the event of a change in 
the PEPP conditions or amendment of the law applicable to the  PEPP-related 
contract; 

(d)    information  on  how  the  investment  policy  takes  into  account  environmental, 

social and governance factors. 

Article 28 
PEPP Benefit Statement 

1. 

The PEPP Benefit Statement shall include, at least, the following key information for 
PEPP savers:  

(a)   personal details of the PEPP saver, name of the PEPP provider, information on 
pension  benefit  projections, 
information  on  accrued  entitlements  or 
accumulated  capital,  contributions  paid  by  the  PEPP  saver  or  any  third  party 
and  information  on  the  funding  level  of  the  PEPP  scheme,  for  which  Article 
39, paragraphs 1(a), (b), (d), (e), (f) and (h) of Directive 2016/2341/EU shall be 
applied,  where  the  "member"  means  the  PEPP  saver,  the  "IORP"  means  the 
PEPP  provider,  the  "pension  scheme"  means  the  PEPP  scheme  and  "the 
sponsoring  undertaking"  means  any  third  party  for  the  purposes  of  this 
Regulation;   

(b)  

the Member State in which the PEPP provider is authorised or registered and 
the name of the competent authority; 

EN 

40 

   EN 

(c)   where  applicable,  information  on  full  or  partial  guarantees  under  the  PEPP 
scheme and if relevant, the nature of the guarantee and mechanisms protecting 
accrued individual entitlements; 

(d)  

information on the past performance of the PEPP scheme as a whole or, where 
relevant,  of  the  PEPP  saver's  investment  option  presented in  a  chart  covering 
performance for any years available and up to the last ten years; 

(e)   a breakdown of the costs deducted by the PEPP provider at least over the last 
12  months,  indicating  the  costs  of  administration,  costs  of  safekeeping  of 
assets,  costs  related  to  portfolio  transactions  and  other  costs,  as  well  as  an 
estimation of the impact of the costs on the final benefits. 

The Commission shall adopt delegated acts in accordance with Article 62 setting out 
rules to determine the assumptions on pension benefit projections referred to in point 
(a)  of  paragraph  1.  Those  rules  shall  be  applied  by  PEPP  providers  to  determine, 
where  relevant,  the  annual  rate  of  nominal  investment  returns,  the  annual  rate  of 
inflation and the trend of future wages. 

In  accordance  with  Article  55,  Member  States  shall  exchange  best  practices  with 
regard to the format and the content of the PEPP Benefit Statement. 

Article 29 
Supplementary information 

The  PEPP  Benefit  Statement  shall  specify  where  and  how  to  obtain  supplementary 
information including: 

(a)  

(b)  

further  practical  information  as  set  out  in  Article  40,  paragraph  1(a)  of 
Directive 2016/2341/EU;  

information  on  the  annual  accounts  and  annual  reports  of  the  PEPP  provider, 
taking  into  account  each  PEPP  scheme  operated  by  that  provider,  and,  where 
applicable, annual accounts and annual reports for each PEPP scheme;  

(c)   a  written  statement  of  the  PEPP  provider’s  investment-policy  principles, 
containing at least such matters as the investment risk measurement methods, 
the risk-management processes implemented and the strategic asset allocation 
with respect to the nature and duration of PEPP liabilities, as well as how the 
investment  policy  takes  environmental,  social  and  governance  factors  into 
account; 

(d)   where  applicable,  information  about  the  assumptions  used  for  amounts 
expressed in annuities, in particular with respect to the annuity rate, the type of 
PEPP provider and the duration of the annuity;  

(e)  

information on the level of benefits, in case of early redemption.  

For PEPP schemes where PEPP savers bear investment risk and where an investment 
option is imposed on the PEPP saver by a specific rule specified in the PEPP scheme, 
the PEPP Benefit Statement shall indicate where additional information is available. 

EIOPA,  after  consulting  national  authorities  and  after  consumer  testing,  shall 
develop  draft  implementing  technical  standards  specifying  the  details  of  the 
presentation of the information referred to in Article 28 and in this Article.  

EIOPA shall submit those draft implementing technical standards to the Commission 
by … [within 9 months after the entry into force of the Regulation]. 

2. 

3. 

1. 

2. 

3. 

EN 

41 

   EN 

Power is conferred on the Commission to adopt the implementing technical standards 
referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) 
No 1094/2010. 

Article 30 
Information to be given to PEPP savers during the pre-retirement phase and to PEPP 
beneficiaries during the decumulation phase 

1. 

2. 

PEPP  savers  shall  receive  information  during  the  pre-retirement  phase  as  set  out  in 
Article 42 of Directive 2016/2341/EU. 

PEPP providers shall periodically provide PEPP beneficiaries with information, as set 
out  in  Article  43  of  Directive  2016/2341/EU,  where  the  "pay-out"  means  the 
decumulation for the purposes of this Regulation. 

Article 31 
Additional information to be given on request to PEPP savers and PEPP beneficiaries 

At  the  request  of  a  PEPP  saver  or  a  PEPP  beneficiary  or  their  representatives,  the  PEPP 
provider shall provide the following additional information: 

(a)  

(b)  

(c)  

the annual accounts and the annual reports referred to in point (b) of Article 29(1) or, 
where a PEPP provider is responsible for more than one PEPP scheme, the accounts 
and reports relating to their particular PEPP scheme; 

the statement of investment-policy principles, referred to in point (c) of Article 29(1); 

any  further  information  about  the  assumptions  used  to  generate  the  projections 
referred to in point (a) of Article 28(1). 

SECTION V 
REPORTING TO NATIONAL AUTHORITIES 

Article 32 
General provisions 

1. 

PEPP  providers  shall  submit  to  the  competent  authorities  the  information  which  is 
necessary for the purposes of supervision. That information shall include at least the 
information  necessary  to  carry  out  the  following  activities  when  performing  a 
supervisory review process: 

(a)  

to assess the system of governance applied by the PEPP providers, the business 
they  are  pursuing,  the  valuation  principles  applied  for  solvency  purposes,  the 
risks faced and the risk-management systems, and their capital structure, needs 
and management; 

(b)  

to  make  any  appropriate  decisions  resulting  from  the  exercise  of  their 
supervisory rights and duties. 

2. 

The competent authorities shall have the following powers: 

EN 

42 

   EN 

 
 
(a)  

to determine the nature, the scope and the format of the information referred to 
in  paragraph  1  which they  require PEPP  providers to  submit  at  the  following 
points in time: 

(i)  

at predefined periods; 

(ii)   upon occurrence of predefined events; 

(iii)   during enquiries regarding the situation of a PEPP provider; 

(b)  

to obtain from the PEPP providers any information regarding contracts which 
are held by PEPP providers or regarding contracts which are entered into with 
third parties; and 

(c)  

to require information from external experts, such as auditors and actuaries. 

3. 

The information referred to in paragraphs 1 and 2 shall comprise the following:  

(a)   qualitative or quantitative elements, or any appropriate combination thereof; 

(b)   historic,  current  or  prospective  elements,  or  any  appropriate  combination 

thereof;  

(c)   data from internal or external sources, or any appropriate combination thereof. 

4. 

The information referred to in paragraphs 1 and 2 shall:  

5. 

6. 

7. 

(a)  

reflect the  nature,  scale  and  complexity  of  the  business  of  the  PEPP  provider 
concerned, and in particular the risks inherent in that business; 

(b)   be accessible, complete in all material respects, comparable and consistent over 

time;  

(c)   be relevant, reliable and comprehensible. 

PEPP  providers  shall  have  appropriate  systems  and  structures  in  place  to  fulfil  the 
requirements laid down in paragraphs 1 to 4 as well as a written policy, approved by 
the administrative, management or supervisory body of the PEPP provider, ensuring 
the ongoing appropriateness of the information submitted. 

Upon request addressed to the competent authorities, EIOPA shall have access to the 
information submitted by PEPP providers. 

The Commission shall adopt delegated acts in accordance with Article 62 specifying 
the  information  referred  to  in  paragraphs  1  to  4,  with  a  view  to  ensuring  to  the 
appropriate extent convergence of supervisory reporting. 

EIOPA,  after  consulting  national  authorities  and  after  consumer  testing,  shall 
develop draft implementing technical standards regarding the format of supervisory 
reporting.  

EIOPA shall submit those draft implementing technical standards to the Commission 
by … [within 9 months after the entry into force of the Regulation]. 

Power is conferred on the Commission to adopt the implementing technical standards 
referred to in the second subparagraph in accordance with Article 15 of Regulation 
(EU) No 1094/2010. 

EN 

43 

   EN 

 
CHAPTER V 
ACCUMULATION PHASE 

SECTION I 
INVESTMENT RULES FOR PEPP PROVIDERS 

Article 33 
Investment rules  

1. 

PEPP  providers  shall  invest  in  accordance  with  the  "prudent  person"  rule  and  in 
particular in accordance with the following rules:  

(a)  

(b)  

(c)  

(d)  

(e) 

(f) 

(g) 

the assets shall be invested in the best long-term interests of PEPP savers as a 
whole.  In  the  case  of  a  potential  conflict  of  interest,  a  PEPP  provider,  or  the 
entity which manages its portfolio, shall ensure that the investment is made in 
the sole interest of PEPP savers; 

the assets shall be invested in such a manner as to ensure the security, quality, 
liquidity and profitability of the portfolio as a whole; 

the assets shall be predominantly invested on regulated markets. Investment in 
assets which are not admitted to trading on a regulated financial market must in 
any event be kept to prudent levels; 

investment  in  derivative  instruments  shall  be  possible  insofar  as  such 
instruments contribute to a reduction in investment risks or facilitate efficient 
portfolio  management.  Those  instruments  shall  be  valued  on  a  prudent  basis, 
taking  into  account  the  underlying  asset,  and  included  in  the  valuation  of  a 
PEPP  provider's  assets.  PEPP  providers  shall  also  avoid  excessive  risk 
exposure to a single counterparty and to other derivative operations; 

the  assets  shall  be  properly  diversified  in  such  a  way  as  to  avoid  excessive 
reliance  on  any  particular  asset,  issuer  or  group  of  undertakings  and 
accumulations of risk in the portfolio as a whole. Investments in assets issued 
by the same issuer or by issuers belonging to the same group shall not expose a 
PEPP provider to excessive risk concentration; 

the assets shall not be invested in a high-risk and non-cooperative jurisdiction 
identified by the Financial Action Task Force; 

the PEPP provider shall not expose himself to risks stemming from excessive 
leverage and excessive maturity transformation. 

2. 

The rules set out in points (a) to (g) of paragraph 1 apply only to the extent that there 
is  no  more  stringent  provision  in  the  relevant  sectorial  legislation  applicable  to  the 
PEPP provider. 

EN 

44 

   EN 

 
SECTION II 
INVESTMENT RULES FOR PEPP SAVERS 

Article 34 
General provisions 

1. 

2. 

3. 

PEPP providers shall offer up to five investment options to PEPP savers.  

The  investment  options  shall  include  a  default  investment  option  and  may  include 
alternative investment options.  

All investment options shall be designed by PEPP providers on the basis of proven 
risk-mitigation techniques which shall ensure sufficient protection for PEPP savers.  

Article 35 
Choice of investment option by the PEPP saver 

The PEPP saver shall opt for an investment option upon conclusion of the PEPP contract.  

Article 36 
Conditions for modification of the chosen investment option 

The PEPP saver shall be able to opt for a different investment option once every five 
years of accumulation in the PEPP.  

The modification of the investment option shall be free of charge for the PEPP saver.  

Article 37 
Default investment option 

The default investment option shall ensure capital protection for the PEPP saver, on 
the basis of a risk-mitigation technique that results in a safe investment strategy.  

Capital protection shall allow the PEPP saver to recoup the capital invested. 

Article 38 
Alternative investment options 

If  PEPP  providers  offer  alternative  investment  options,  at  least  one  of  them  shall 
offer a cost-effective investment option to PEPP savers.  

The  alternative  investment  options  shall  include  risk-mitigation  techniques  to  be 
defined by PEPP providers.  

1. 

2. 

1. 

2. 

1. 

2. 

Article 39 
Delegated act on the investment options 

The Commission shall be empowered to adopt a delegated act in accordance with Article 62 
specifying:  

(a)     the  risk-mitigation  technique  to  ensure  capital  protection  under  the  default 

investment option;  

(b)  

the  risk-mitigation  techniques  to  be  applied  for  the  alternative  investment 
options. 

EN 

45 

   EN 

SECTION III 
OTHER ASPECTS OF THE ACCUMULATION PHASE 

Article 40 
Conditions related to the accumulation phase 

In  accordance  with  Article  3(b),  the  PEPP  conditions  related  to  the  accumulation 
phase  shall  be  determined  by  Member  States  unless  they  are  specified  in  this 
Regulation.  

Such  conditions  may  include  in  particular  age  limits  for  starting  the  accumulation 
phase,  minimum  duration  of  the  accumulation  phase,  maximum  and  minimum 
amount  of  in-payments  and  their  continuity,  as  well  as  conditions  for  redemption 
before retirement age in case of particular hardship. 

CHAPTER VI 
INVESTOR PROTECTION 

Article 41 
Depositary 

Where the PEPP provider is an institution for occupational retirement provision or an 
investment  firm  as  referred  to  in  Article  5(1),  it  shall  appoint  one  or  more 
depositaries for the safe-keeping of assets and oversight duties. 

For the appointment of the depository and the execution of its tasks Article 33(5), (6) 
and (7) of Directive 2016/2341/EU shall be applied accordingly. 

For the safekeeping of assets and the liability of the depositary Article 34(1) and (2) 
of  Directive  2016/2341/EU  shall  be  applied  accordingly.  The  depository  shall  be 
liable to the PEPP provider and the PEPP savers for any loss suffered by them as a 
result  of  its  unjustifiable  failure  to  perform  its  obligations  or  its  improper 
performance of them. The depositor's liability shall not be affected by the fact that it 
has entrusted to a third party all or some of the assets in its safe-keeping. 

For  the  oversight  duties  of  a  depositary  Article  35(1)  of  Directive  2016/2341/EU 
shall be applied accordingly. 

1. 

2. 

1. 

2. 

3. 

4. 

Article 42 
Coverage of biometric risks  

PEPP  providers  may  offer  PEPPs  with  an  option  ensuring  the  coverage  of  the  risk  of 
biometric  risks.  For  the  purpose  of  this  Regulation,  "biometric  risks"  mean  risks  linked  to 
longevity, disability and death. 

Article 43 
Complaints 

1. 

PEPP providers and distributors shall put in place and apply adequate and effective 
complaint  resolution  procedures  for  the  settlement  of  complaints  lodged  by  PEPP 
customers concerning their rights and obligations under this Regulation. 

EN 

46 

   EN 

 
 
2. 

3. 

4. 

5. 

6. 

1. 

2. 

49 

Those procedures shall be applied in every Member State where the PEPP provider 
or distributor offers its services and shall be available in an official language of the 
relevant  Member  State  as  chosen  by  the  PEPP  customer,  or  in  another  language  if 
agreed between the PEPP provider or distributor and the PEPP customer. 

PEPP providers and distributors shall make every possible effort to reply, on paper 
or,  if  agreed  between  the  PEPP  provider  or  distributor  and  the  PEPP  customer,  on 
another durable medium, to the PEPP customers’ complaints. The reply shall address 
all  points  raised,  within an adequate timeframe and at the latest  within 15 business 
days  of  receipt  of  the  complaint.  In  exceptional  situations,  if  the  answer  cannot  be 
given within 15 business days for reasons beyond the control of the PEPP provider or 
distributor, it shall be required to send a holding reply, clearly indicating the reasons 
for a delay in answering to the complaint and specifying the deadline by which the 
PEPP customer will receive the final reply. In any event, the deadline for receiving 
the final reply shall not exceed 35 business days.  

PEPP providers  and distributors shall inform the PEPP customer about at least  one 
alternative dispute resolution (ADR) entity which is competent to deal with disputes 
concerning PEPP customers' rights and obligations under this Regulation.  

The  information  referred  to  in  paragraph  3  shall  be  mentioned  in  a  clear, 
comprehensive  and  easily  accessible  way  on  the  website  of  the  PEPP  provider  or 
distributor,  at  the  branch,  and  in  the  general  terms  and  conditions  of  the  contract 
between  the  PEPP  provider  or  distributor  and  the  PEPP  customer.  It  shall  specify 
how  further  information  on  the  ADR  entity  concerned  and  on  the  conditions  for 
using it can be accessed. 

The competent authorities shall set up procedures which allow PEPP customers and 
other interested parties, including consumer associations, to submit complaints to the 
competent  authorities  with  regard  to  PEPP  providers'  and  distributors'  alleged 
infringements of this Regulation. In all cases, complainants shall receive replies. 

 Article 44 
Out-of-court redress  

Adequate, independent, impartial, transparent and effective ADR procedures for the 
settlement of disputes between PEPP customers and PEPP providers or distributors 
concerning  the  rights  and  obligations  arising  under  this  Regulation  shall  be 
established  in  accordance  with  Directive  2013/11/EU  of  the  European  Parliament 
and  the  Council49,  using  existing  competent  bodies  where  appropriate.  Such  ADR 
procedures  shall  be  applicable,  and  the  relevant  ADR  body’s  competence  shall 
effectively  extend,  to  PEPP  providers  or  distributors  against  whom  the  procedures 
are initiated. 

The bodies referred to in paragraph 1 shall cooperate effectively for the resolution of 
cross-border disputes concerning rights and obligations arising under this Regulation. 

Directive  2013/11/EU  of  the  European  Parliament  and  of  the  Council  of  21  May 2013  on  alternative 
dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 
2009/22/EC, OJ L 165, 18.6.2013, p. 63. 

EN 

47 

   EN 

 
                                                 
 
1. 

2. 

1. 

2. 

CHAPTER VII 
SWITCHING OF PEPP PROVIDERS 

Article 45 
Provision of the switching service 

PEPP providers shall provide a switching service transferring, upon a request of the 
PEPP  saver,  any  positive  balance  from  a  PEPP  account  held  with  the  transferring 
provider to a new PEPP account opened with the receiving provider, with closing the 
former PEPP account.  

The switching service may be provided by PEPP providers established in  the same 
Member  State  (domestic  switching)  or  in  different  Member  States  (cross-border 
switching).  

The PEPP saver may switch PEPP providers no more frequently than once every five 
years after conclusion of the PEPP contract. 

Article 46 
The switching service 

At  the  request  of  the  PEPP  saver,  the  switching  service  shall  be  initiated  by  the 
receiving  PEPP  provider.  The  switching  service  shall  at  least  comply  with 
paragraphs 2 to 5. 

The receiving PEPP provider shall initiate the switching service upon receipt of the 
authorisation from the PEPP saver.  

The  authorisation  shall  be  drawn  up  in  an  official  language  of  the  Member  State 
where  the  switching  service  is  being  initiated  or  in  any  other  language  agreed 
between the parties. 

The  authorisation  shall  allow  the  PEPP  saver  to  provide  specific  consent  to  the 
performance  by  the  transferring  PEPP  provider  of  each  of  the  tasks  referred  to  in 
paragraph  3  and  to  provide  specific  consent  to  the  performance  by  the  receiving 
PEPP provider of each of the tasks referred to in paragraph 5. 

The authorisation shall allow the PEPP saver to specifically identify asset portfolios 
and/or  amounts  that  are  to  be  switched.  The  authorisation  shall  also  allow  PEPP 
savers  to  specify  the  date  from  which  payments  are  to  be  executed  to  the  PEPP 
account  opened  with  the  receiving  PEPP  provider.  That  date  shall  be  at  least  six 
working  days  after  the  date  on  which  the  receiving  PEPP  provider  receives  the 
documents transferred from the transferring PEPP provider pursuant to paragraph 4. 
Member States  may  require the authorisation from the PEPP saver  to  be in  writing 
and that a copy of the authorisation be provided to the PEPP saver. 

3. 

Within two working days from receipt of the authorisation referred to in paragraph 2, 
the receiving PEPP provider shall request the transferring PEPP provider to carry out 
the following tasks, if provided for in the PEPP saver’s authorisation: 

(a)  

transmit  to  the  receiving  PEPP  provider  and,  if  specifically  requested  by  the 
PEPP saver in the authorisation, to the PEPP saver, a list of the existing assets 
that are being switched; 

EN 

48 

   EN 

(b)  

transfer  any  remaining  positive  balance  to  the  PEPP  account  opened  or  held 
with the receiving PEPP provider on the date specified by the PEPP saver; and 

(c)   close  the  PEPP  account  held  with  the  transferring  PEPP  provider  on  the  date 

specified by the PEPP saver. 

4. 

Upon receipt  of a request  from the receiving  PEPP provider, the transferring PEPP 
provider  shall  carry  out  the  following  tasks,  if  provided  for  in  the  PEPP  saver’s 
authorisation: 

(a)   send  the  receiving  PEPP  provider  the  information  referred  to  in  point  (a)  of 

paragraph 3 within five working days; 

(b)   where the transferring PEPP provider does not provide a system for automated 
redirection of the incoming payments to the PEPP account opened by the PEPP 
saver with the receiving PEPP provider, stop accepting incoming payments on 
the  PEPP  account  with  effect  from  the  date  specified  in  the  authorisation. 
Member States may require the transferring PEPP provider to inform the PEPP 
saver of the reason for not accepting the incoming payments; 

(c)  

transfer  the  remaining  positive  balance  from  the  PEPP  account  to  the  new 
PEPP account opened with the receiving PEPP provider on the date specified 
in the authorisation; 

(d)   close the PEPP account on the date specified in the authorisation if the PEPP 
saver  has  no  outstanding  obligations  on  that  PEPP  account  and  provided  that 
the  actions  listed  in  points  (a),  (b)  and  (c)  of  this  paragraph  have  been 
completed. The PEPP provider shall immediately inform the PEPP saver where 
such  outstanding  obligations  prevent  the  PEPP  saver’s  account  from  being 
closed. 

5. 

Within  five  working  days  of  receipt  of  the  information  requested  from  the 
transferring PEPP provider as referred to in paragraph 3, the receiving PEPP provider 
shall, as and if provided for in the authorisation and to the extent that the information 
provided by the transferring PEPP provider or the PEPP saver enables the receiving 
PEPP provider to do so, carry out the following tasks: 

(a)   make any necessary preparations to accept incoming payments and accept them 

with effect from the date specified in the authorisation; 

(b)  

inform payers specified in the authorisation of the details of the PEPP saver’s 
PEPP  account  with  the  receiving  PEPP  provider  and  transmit  to  the  payers  a 
copy of the PEPP saver’s authorisation.  

If the receiving PEPP provider does not have all the information it needs to inform 
the payers as referred to in point (b) of the first subparagraph, it shall ask the PEPP 
saver or the transferring PEPP provider to provide the missing information. 

Where the PEPP savers chooses to personally provide the information referred to in 
point (b) of the first subparagraph to the payers rather than provide specific consent 
in  accordance  with  paragraph  2  to  the  receiving  PEPP  provider  to  do  so,  the 
receiving PEPP provider shall provide the PEPP saver with standard letters providing 
details of the PEPP account and the starting date specified in the authorisation within 
the deadline referred to in the first subparagraph. 

EN 

49 

   EN 

Article 47 
Facilitation of domestic and cross-border switching for PEPP savers 

1. 

Where a PEPP saver indicates to his PEPP provider that he wishes to open a PEPP 
account  with  a  PEPP  provider  located  in  the  same  or  another  Member  State,  the 
PEPP provider with which the PEPP saver holds a PEPP account shall on receipt of 
such request provide the following assistance to the PEPP saver:  

(a)   provide  the  PEPP  saver  free  of  charge  with  available  information  about 
recurring  incoming  payments  to  the  PEPP  saver’s  PEPP  account  in  the 
previous 13 months; 

(b)  

transfer the positive balance remaining on the PEPP account held by the PEPP 
saver to the PEPP account opened by the PEPP saver with the receiving PEPP 
provider, provided that the request includes full details allowing the receiving 
PEPP provider and the PEPP saver’s PEPP account to be identified; 

(c)   close the PEPP account held by the PEPP saver. 

If  the  PEPP  saver  has  no  outstanding  obligations  on  the  PEPP  account,  the  PEPP 
provider with which the PEPP saver holds that PEPP account shall provide assistance 
referred  to  in  points  (a),  (b)  and  (c)  of  paragraph  1  of  this  Article  on  the  date 
specified by the PEPP saver, which shall be at least six business days after that PEPP 
provider  receives  the  PEPP  saver’s  request  unless  otherwise  agreed  between  the 
parties.  The  PEPP  provider  shall  immediately  inform  the  PEPP  saver  where 
outstanding obligations prevent his PEPP account from being closed. 

Article 48 
Fees and charges connected with the switching service 

PEPP  savers  shall  be  able  to  access  free  of  charge  their  personal  information  held  
either by the transferring or by the receiving PEPP provider. 

The  transferring  PEPP  provider  shall  provide  the  information  requested  by  the 
receiving PEPP provider pursuant to point (a) of Article 46(4) without charging the 
PEPP saver or the receiving PEPP provider. 

The  total  fees  and  charges  applied  by  the  transferring  PEPP  provider  to  the  PEPP 
saver  for  the  closure  of  the  PEPP  account  held  with  it  shall  be  limited  to  no  more 
than 1,5 % of the positive balance to be transferred to the receiving PEPP provider.  

Fees and charges, if any, applied by the transferring or the receiving PEPP provider 
to the PEPP saver for any service provided under Article 46, other than those referred 
to  in  paragraphs  1,  2  and  3  of  this  Article,  shall  be  reasonable  and  in  line  with  the 
actual costs of that PEPP provider. 

Article 49 
Protection of PEPP savers against financial loss 

Any financial loss, including fees, charges and interest, incurred by the PEPP saver 
and resulting directly from the non-compliance of a PEPP provider involved in  the 
switching  process  with  its  obligations  under  Article  46  shall  be  refunded  by  that 
PEPP provider without delay.  

Liability under paragraph 1 shall not apply in cases of abnormal and unforeseeable 
circumstances beyond the control of the PEPP provider pleading for the application 

2. 

1. 

2. 

3. 

4. 

1. 

2. 

EN 

50 

   EN 

3. 

4. 

5. 

of  those  circumstances,  the  consequences  of  which  would  have  been  unavoidable 
despite all efforts to the contrary, or where a PEPP provider is bound by other legal 
obligations covered by Union or national legislative acts. 

Liability  under  paragraph  1  shall  be  established  in  accordance  with  the  legal 
requirements applicable at national level. 

The PEPP saver shall bear the costs and any risk of financial loss connected with the 
redemption  in  kind  of  the  assets  held  in  the  PEPP  account  for  the  sake  of  their 
transfer from the transferring PEPP provider to the receiving PEPP provider. 

The PEPP saver shall bear the costs and any risk of financial loss connected with the 
capital  protection  provided  by  the  transferring  PEPP  provider.  This  capital 
protection, allowing the PEPP saver to recoup the capital invested and providing an 
inflation  indexation  mechanism,  shall  be  consumed  at  the  moment  of  switching 
providers.  

Article 50 
Information about the switching service 

1. 

PEPP  providers  shall  give  to  PEPP  savers  the  following  information  about  the 
switching service: 

(a)  

the roles of the transferring  and receiving PEPP provider for each step of the 
switching process, as indicated in Article 46; 

(b)  

the time-frame for completion of the respective steps; 

(c)  

the fees and charges charged for the switching process; 

(d)   any information that the PEPP saver will be asked to provide. 

PEPP  providers  shall  also  give  other  information,  including,  where  applicable,  the 
information  necessary  for  the  identification  of  the  deposit  guarantee  scheme, 
investor-compensation  scheme  or  pension  protection  scheme  within  the  Union  of 
which  the  PEPP  provider  is  a  member.  A  "pension  protection  scheme"  means  an 
arrangement to pay compensation to PEPP savers or PEPP beneficiaries in the event 
of insolvency of the PEPP provider. 

The  information  referred  to  in  paragraph  1  shall  be  available  in  electronic  form  on 
the  PEPP  provider's  website  at all  times,  shall  be  made  available  free  of  charge  on 
paper or another durable medium at all PEPP provider's premises accessible to PEPP 
savers, and shall be provided to PEPP savers on request. 

CHAPTER VIII 
DECUMULATION PHASE 

Article 51 
Conditions related to the decumulation phase 

In accordance with Article 3, the PEPP conditions related to the decumulation phase 
shall be determined by Member States unless they are specified in this Regulation.  

Such  conditions  may  include  in  particular  the  setting  of  the  retirement  age,  of  a 
mandatory  link  between  reaching  the  retirement  age  and  commencing  the 

2. 

1. 

2. 

EN 

51 

   EN 

 
decumulation  phase,  of  a  minimum  period  of  belonging  to  a  PEPP  scheme,  of  a 
maximum period before reaching the retirement age for joining a PEPP scheme, as 
well as conditions for redemption in case of particular hardship.  

Article 52 
Forms of out-payments 

1. 

PEPP  providers  may  make  available  to  PEPP  savers  one  or  more  of  the  following 
forms of out-payments: 

(a)   annuities; 

(b)  

lump sum; 

(c)   drawdown payments; 

(d)   combinations of the above forms. 

2. 

The  choice  of  the  form  of  out-payments  for  the  decumulation  phase  shall  be 
exercised by PEPP savers upon conclusion of a PEPP contract and can be changed 
once every five years thereafter during the accumulation phase, if applicable. 

CHAPTER IX 
SUPERVISION 

1. 

2. 

3. 

Article 53 
Supervision by the competent authorities and monitoring by EIOPA 

The competent authority of the PEPP provider shall supervise compliance with this 
Regulation  on  an  ongoing  basis.  It  shall  also  be  responsible  for  supervising 
compliance with the obligations set out in the rules or instruments of incorporation of 
the PEPP provider, and the adequacy of its arrangements and organisation with the 
tasks to be fulfilled when providing a PEPP.  

EIOPA  shall  monitor  pension  schemes  established  or  distributed  in  the  territory  of 
the Union to verify that they do not use the designation "PEPP" or suggest that they 
are a PEPP unless they are authorised under, and comply with, this Regulation.  

In  coordination  with  the  other  European  Supervisory  Authorities,  EIOPA  shall 
review  the  annual  plans  for  supervision  of  the  PEPP  providers  adopted  by  the 
competent authorities. 

Article 54 
Powers of competent authorities 

Each Member State shall ensure that the competent authority has all supervisory and 
investigatory powers that are necessary for the exercise of their functions pursuant to 
this Regulation. 

EN 

52 

   EN 

 
1. 

2. 

3. 

4. 

5. 

Article 55 
Cooperation between competent authorities and with EIOPA 

EIOPA and the competent authority of the PEPP provider shall cooperate with each 
other and exchange information for the purpose of carrying out their duties under this 
Regulation.  

The  competent  authorities  shall  cooperate  with  each  other  in  accordance  with 
Regulation 575/2013/EU of the European Parliament and of the Council50, Directive 
2016/2341/EU,  Directive  2014/65/EU,  Directive 
2009/138/EC,  Directive 
2009/65/EC and Directive 2011/61/EU.   

The  competent  authorities  and  EIOPA  shall  cooperate  with  each  other  for  the 
purpose  of  carrying  out  their  respective  duties  under  this  Regulation  in  accordance 
with Regulation (EU) No 1094/2010.  

The  competent  authorities  and  EIOPA  shall  exchange  all  information  and 
documentation necessary to carry out their respective duties under this Regulation in 
accordance with Regulation (EU) No 1094/2010, in particular to identify and remedy 
infringements of this Regulation.  

In  order  to  ensure  consistent  application  of  this  Article,  EIOPA  shall  develop  draft 
implementing  technical  standards  specifying  the  details  of  the  mechanism  for 
cooperation and exchange of information, together with the requirements needed to 
present the information above in a standardised format allowing for comparison. 

EIOPA shall submit those draft implementing technical standards to the Commission 
by … [within 9 months after the entry into force of the Regulation]. 

Power is conferred on the Commission to adopt the implementing technical standards 
referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) 
No 1094/2010. 

Article 56 
Settlement of disagreements between competent authorities in cross-border situations 

1. 

Where  a  competent  authority  of  a  PEPP  provider  or  distributor  disagrees  about  the 
procedure  or  content  of  an  action  or  inaction  of  a  competent  authority  of  another 
Member State regarding the application of this Regulation, EIOPA, at the request of 
one  or  more  of  the  competent  authorities  concerned,  may  assist  the  authorities  in 
reaching an agreement in accordance with the procedure set out in paragraphs 2 to 4.  

In  cases  involving  cross-border  situations,  and  where  on  the  basis  of  objective 
criteria  disagreement  between  competent  authorities  from  different  Member  States 
can be identified, EIOPA may, on its own initiative or upon request of the European 
Supervisory  Authority  (European  Banking  Authority)  or  the  European  Supervisory 
Authority  (European  Securities  and  Markets  Authority),  assist  the  competent 
authorities  in  reaching  an  agreement  in  accordance  with  the  procedure  set  out  in 
paragraphs 2 to 4.  

50 

Regulation  (EU)  No  575/2013  of  the  European  Parliament  and  of  the  Council  of  26  June  2013  on 
prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 
648/2012 (OJ L 176, 27.6.2013, p. 1). 

EN 

53 

   EN 

 
                                                 
2. 

3. 

4. 

5. 

EIOPA  shall  set  a  time  limit  for  conciliation  between  the  competent  authorities 
taking into account any relevant time periods, as well as the complexity and urgency 
of the matter. At that stage EIOPA shall act as a mediator. 

If  the  competent  authorities  concerned  fail  to  reach  an  agreement  within  the 
conciliation  phase  referred  to  in  paragraph  2,  EIOPA  may,  in  accordance  with  the 
procedure set out in the third and fourth subparagraph of Article 44(1) of Regulation 
(EU)  No  1094/2010,  take  a  decision  requiring  them  to  take  specific  action  or  to 
refrain  from  action  in  order  to  settle  the  matter,  with  binding  effects  for  the 
competent authorities concerned, in order to ensure compliance with Union law. 

Without prejudice to the powers of the Commission under Article 258 TFEU, where 
a competent authority does not comply with the decision of EIOPA, and thereby fails 
to  ensure  that  a  PEPP  provider  or  PEPP  distributor  complies  with  requirements 
directly applicable to it by virtue of this Regulation, EIOPA may adopt an individual 
decision addressed to the  PEPP provider or PEPP distributor requiring the necessary 
action to comply with its obligations under Union law, including the cessation of any 
practice. 

Decisions  adopted  under  paragraph  4  shall  prevail  over  any  previous  decision 
adopted  by  the  competent  authorities  on  the  same  matter.  Any  action  by  the 
competent authorities in relation to facts which are subject to a decision pursuant to 
paragraph 3 or 4 shall be compatible with those decisions. 

In  the  report  referred  to  in  Article  50(2)  of  Regulation  (EU)  No  1094/2010,  the 
Chairperson  of  EIOPA  shall  set  out  the  nature  and  type  of  disagreements  between 
competent authorities, the agreements reached and the decisions taken to settle such 
disagreements. 

CHAPTER X 
SANCTIONS 

Article 57 
Administrative sanctions and remedial measures 

1. 

Without prejudice to the right for Member States to provide for and impose criminal 
sanctions,  competent  authorities  may  impose  administrative  sanctions  and  remedial 
measures applicable to situations where: 

(a) 

(b) 

(c) 

a  financial  undertaking  as  referred  to  in  Article  5(1)  has  obtained  an 
authorisation  of  a  PEPP  through  false  or  misleading  statements  or  any  other 
irregular means in breach of Articles 5 and 6; 

a  financial  undertaking  as  referred  to  in  Article  5(1)  provides,  respectively 
distributes,  products  bearing  the  designation  "PEPP"  or  "pan-European 
Personal Pension Product" without the required authorisation; 

a  PEPP  provider  has  infringed  Article  7(3),  has  not  provided  the  portability 
service  in  breach  of  Article  13  or  the  information  about  that  service  required 
under Article 17, or has failed to meet the requirements and obligations set out 
in Chapter IV, Chapter V, Article 43 and Chapter VII; 

(d) 

a depositary has failed to fulfil its oversight duties under Article 42. 

EN 

54 

   EN 

 
2. 

Those  sanctions  and  measures  shall  be  effective,  proportionate  and  dissuasive  and 
shall include, at least the following: 

(a) 

(b) 

(c) 

a  public  statement,  which  indicates  the  identity  of  the  natural  or  legal  person 
and the nature of the infringement in accordance with Article 59; 

an order requiring the natural or legal person to cease the conduct and to desist 
from a repetition of that conduct; 

temporary  ban  against  any  member  of 

a 
the  financial  undertaking's 
management  body  or  any  other  natural  person,  who  is  held  responsible,  to 
exercise management functions in such undertakings; 

(d)  maximum  administrative  fines  of  at  least  EUR  5  000  000,  or  in  the  Member 
States whose currency is not the euro, the corresponding value in the national 
currency on [date of entry into force of this Regulation]; 

(e) 

in the case of a legal person, the maximum administrative fines referred to in 
point (d) may be of up to 10 % of the total annual turnover according to the last 
available accounts approved by the management body; where the legal person 
is a parent undertaking or a subsidiary of the parent undertaking which has to 
prepare  consolidated  financial  accounts 
in  accordance  with  Directive 
2013/34/EU of the European Parliament and of the Council51, the relevant total 
annual turnover shall be the total annual turnover or the corresponding type of 
income in accordance with the relevant accounting legislative acts according to 
the last available consolidated accounts approved by the management body of 
the ultimate parent undertaking; 

(f)  maximum  administrative  fines  of  at  least  twice  the  amount  of  the  benefit 
derived  from  the  infringement  where  that  benefit  can  be  determined,  even  if 
that exceeds the maximum amounts in points (d) and (e). 

Where  the  provisions  referred  to  in  the  first  paragraph  apply  to  legal  persons,  the 
competent authorities shall apply the administrative sanctions and remedial measures 
set out in paragraph 2 to members of the management body, and to other individuals 
who under national law are responsible for the infringement. 

Any  decision  imposing  administrative  sanctions  or  remedial  measures  set  out  in 
paragraph  2  shall  be  properly  reasoned  and  subject  to  the  right  of  appeal  before  a 
tribunal. 

Article 58 
Exercise of the power to impose administrative sanctions and remedial measures 

The  competent  authorities  shall  exercise  the  powers  to  impose  administrative 
sanctions  and  remedial  measures  referred  to  in  Article  57  in  accordance  with  their 
national legal frameworks:  

(a) 

directly; 

(b) 

in collaboration with other authorities; 

Directive  2013/34/EU  of  the  European  Parliament  and  of  the  Council  of  26  June  2013  on  the  annual 
financial  statements,  consolidated  financial  statements  and  related  reports  of  certain  types  of 
undertakings,  amending  Directive  2006/43/EC  of  the  European  Parliament  and  of  the  Council  and 
repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19). 

3. 

4. 

1. 

51 

EN 

55 

   EN 

                                                 
(c) 

by application to the competent judicial authorities. 

2. 

The competent authorities, when determining the type and level of an administrative 
sanction  or  remedial  measure  imposed  under  Article  57,  shall  take  into  account  all 
relevant circumstances, including, where appropriate: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

the materiality, gravity and the duration of the infringement; 

the  degree  of  responsibility  of  the  natural  or  legal  person  responsible  for  the 
infringement; 

the financial strength of the responsible natural or legal person, as indicated in 
particular  by  the  total  turnover  of  the  responsible  legal  person  or  the  annual 
income and net assets of the responsible natural person; 

the importance of profits gained or losses avoided by the responsible natural or 
legal person, insofar as they can be determined; 

the losses for third  parties caused  by the infringement, insofar as  they can  be 
determined; 

the  level  of  cooperation  of  the  responsible  natural  or  legal  person  with  the 
competent  authority,  without  prejudice  to  the  need  to  ensure  disgorgement  of 
profits gained or losses avoided by that person; 

(g)  previous infringements by the responsible natural or legal person. 

Article 59 
Publication of administrative sanctions and remedial measures 

        The  competent  authorities  shall  publish  without  undue  delay  on  their  official 
websites any decision  imposing an administrative sanction or  remedial measure for 
infringement of this Regulation after the addressee of the sanction or measure of the 
sanction or measure has been notified of that decision.  

The publication referred to in paragraph 1 shall include  information on the type and 
nature  of  the  infringement  and  the  identity  of  the  persons  responsible  and  the 
sanctions or measures imposed. 

Where the publication of the identity, in case of legal persons, or the identityand the 
personal data, in the case of natural persons is considered by the competent authority 
to be disproportionate following a case-by-case assessment, or where the competent 
authority considers that the publication jeopardises the stability of financial markets 
or an on-going investigation, competent authorities shall either: 

(a) 

defer  the  publication  of  the  decision  imposing  the  administrative  sanction  or 
remedial  measure  until  the  moment  where  the  reasons  for  non-publication 
cease to exist; or 

(b)  publish the decision imposing the administrative sanction or remedial measure, 
omitting  for  a  reasonable  period  of  time  the  identity  and  personal  data of  the 
addressee, if it is envisaged that within that period the reasons for anonymous 
publication shall cease to exist and provided that such anonymous publication 
ensures an effective protection of the personal data concerned; or 

(c) 

not publish at all the decision to impose the administrative sanction or remedial 
measure in the event that the options set out in points (a) and (b) are considered 
to be insufficient to ensure: 

1. 

2. 

3. 

EN 

56 

   EN 

(i) 

that the stability of financial markets would not be put in jeopardy; 

(ii) 

the  proportionality  of  the  publication  of  such  decisions  with  regard  to 
measures which are deemed to be of a minor nature. 

In the case of a decision to publish a sanction or measure on an anonymous basis as 
referred to in paragraph 3(b), the publication of the relevant data may be postponed. 
Where a decision imposing an administrative sanction or remedial measure is subject 
to an appeal before the relevant judicial authorities, competent authorities shall also 
immediately  add  on  their  official  website  that    information  and  any  subsequent 
information  on  the  outcome  of  such  appeal.  Any  judicial  decision  annulling  a 
decision  imposing  an  administrative  sanction  or  a  remedial  measure  shall  also  be 
published. 

The competent authorities shall ensure that any publication referred to in paragraphs 
1 to 4 shall remain on their official website for at least five years after its publication. 
Personal data contained in the publication shall only be kept on the official website 
of the competent authority for the period which is necessary in accordance with the 
applicable data protection rules. 

Article 60 
Duty to submit information to EIOPA in relation to administrative sanctions and 
remedial measures 

The  competent  authorities  shall  inform  EIOPA  of  all  administrative  sanctions  and 
other measures imposed but not published in accordance with Article 59(1). 

The  competent  authorities  shall  provide  EIOPA  annually  with  aggregated 
information regarding all administrative sanctions and remedial measures imposed in 
accordance with Article 57. 

EIOPA shall publish that information in an annual report. 

Where  the  competent  authority  has  disclosed  an  administrative  sanction  or  other 
measure to the public, it shall at the same time report that fact to EIOPA. 

4. 

5. 

1. 

2. 

3. 

CHAPTER XI 
FINAL PROVISIONS 

Article 61 
Processing of personal data 

With regard to the processing of personal data within the framework of this Regulation, PEPP 
providers  and  competent  authorities  shall  carry  out  their  tasks  for  the  purpose  of  this 
Regulation  in  accordance  with  Regulation  (EU)  2016/679.  With  regard  to  the  processing  of 
personal data by EIOPA within the framework of this Regulation, EIOPA shall comply with 
Regulation (EC) No 45/2001.  

Article 62 
Exercise of the delegation 

1. 

The  power  to  adopt  delegated  acts  is  conferred  on  the  Commission  subject  to  the 
conditions laid down in this Article.  

EN 

57 

   EN 

 
2. 

3. 

4. 

5. 

The power to adopt delegated acts referred to in Article 24(3), Article 26(3), Article 
28(2),  Article  32(7)  and  Article  39  shall  be  conferred  on  the  Commission  for  an 
indeterminate period of time from the date of entry into force of this Regulation. 

The  delegation  of  powers  referred  to  in  Article  24(3),  Article  26(3),  Article  28(2), 
Article 32(7) and Article 39 may be revoked at any time by the European Parliament 
or  by  the  Council.  A  decision  to  revoke  shall  put  an  end  to  the  delegation  of  the 
power specified in that decision. It shall take effect the day following the publication 
of  the  decision  in  the  Official  Journal  of  the  European  Union  or  at  a  later  date 
specified therein. It shall not affect the validity of any delegated acts already in force. 

As soon as it adopts a delegated act, the Commission shall notify it simultaneously to 
the European Parliament and to the Council. 

A  delegated  act  adopted  pursuant  to  Article  24(3),  Article  26(3),  Article  28(2), 
Article  32(7)  and  Article  39  shall  enter  into  force  only  if  no  objection  has  been 
expressed either by the European Parliament or the Council within a period of three 
months of notification of that act to the European Parliament and the Council or if, 
before the expiry of that period, the European Parliament and the Council have both 
informed the Commission that they will not object. That period shall be extended by 
three months at the initiative of the European Parliament or the Council. 

Article 63 
Evaluation and report 

Five  years  after  the  entry  into  force  of  this  Regulation,  the  Commission  shall  carry  out  an 
evaluation of this Regulation and, and after consulting EIOPA, present a Report on the main 
findings  to  the  European  Parliament,  the  Council  and  the  European  Economic  and  Social 
Committee.  

Where  the  evaluation  identifies  important  problems  with  the  functioning  of  the  Regulation, 
the  Report  should  outline  how  the  Commission  is  intending  to  address  the  identified 
problems, including steps and timings of the potential revision. 

Article 64 
Entry into force 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

58 

   EN 

LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1.  Title of the proposal/initiative  

1.2.  Policy area(s) concerned 

1.3.  Nature of the proposal/initiative  

1.4.  Objective(s)  

1.5.  Grounds for the proposal/initiative  

1.6.  Duration and financial impact  

1.7.  Management mode(s) planned  

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

2.2.  Management and control system  

2.3.  Measures to prevent fraud and irregularities  

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1.  Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

3.2.  Estimated impact on expenditure  

3.2.1. Summary of estimated impact on expenditure  

3.2.2. Estimated impact on operational appropriations  

3.2.3. Estimated impact on appropriations of an administrative nature 

3.2.4. Compatibility with the current multiannual financial framework 

3.2.5. Third-party contributions  

3.3.  Estimated impact on revenue

EN 

59 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. Title of the proposal/initiative  

Regulation  of  the  European  Parliament  and  of  the  Council  on  a  pan-European 
Personal Pension Product (PEPP)     

1.2. Policy area(s) concerned  

Financial Services  

1.3. Nature of the proposal/initiative  

X The proposal/initiative relates to a new action  

  The  proposal/initiative 
project/preparatory action52  

relates 

to  a  new  action 

following  a  pilot 

 The proposal/initiative relates to the extension of an existing action  

 The proposal/initiative relates to an action redirected towards a new action  

1.4. Objective(s) 

 

The  Commission's  multiannual 
proposal/initiative  

strategic  objective(s) 

targeted  by 

the 

A Deeper and Fairer Internal Market with a Strenghtened Industrial Base  

 

Specific objective(s) 

Specific objective No 2.4. 

Consumers have access to safe and reliable insurance, pension and UCITS products 

52 

As referred to in Article 54(2)(a) or (b) of the Financial Regulation. 

EN 

60 

   EN 

 
 
 
                                                 
 

Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

Further  develop  EU  capital  markets  towards  sufficiently  deep,  liquid  and  efficient 
markets,  benefitting  investment  and  growth  in  the  EU.  A  well-functioning  internal 
market for personal pensions could contribute significantly to: 

-  provide  consumers  with  adequate  choice  of  personal  pension  products  with 
minimum EU quality standards ensuring consumer protection, 

-  provide  consumers  and  pension  product  providers  with  adequate  market  access 
across the EU. 

 

Indicators of results and impact  

Specify the indicators for monitoring implementation of the proposal/initiative. 

After the entry into force of the Regulation, Commission will monitor the application  
through regular EIOPA reporting (e.g. annual coordination of supervisory process) as 
well  as  through  its  regular  contacts  with  stakeholders  (e.g.  consumers,  industry 
and/or ESA's). 

Key  monitoring  indicators  of  impact  of  the  measure  will  be  (assessed  e.g.  5  years 
after entering into application of the PEPP Regulation):  

KPI's to monitor the the objective to Increase investment in the EU and contribute 
to completing the CMU: 

KPI 1: Total uptake (in terms of Assets under Management) of PPPs (including 
national PPPs and the PEPP, compared to the baseline scenario.  

The total uptake in terms of assets under management of all PPPs including national 
PPPs and the PEPP is a measure for success as the PEPP will set out the benchmark 
in  terms  of  product  features.  Due  to  competition  forces,  national  PPPs  could  take 
over  PEPP  features,  driving  take-up.  Success  can  be  measured  in  case  the  trend  in 
total  uptake  would  be  statistically  higher  than  the  uptake  of  the  baseline  scenario 
(encompassing  national PPPs).  This  information  is  available  through  the  household 
statistics survey of EUROSTAT to be combined with information by EIOPA. 

KPI  2:  Geographical  and  sectorial  distribution  of  PEPP  providers  and 
investments in PEPPs 

A  broad  geographical  spectrum  of  PEPPs'  take-up  would  prove  their  popularity 
regardless the relative wealth of households in different Member States and provide 
evidence  of  the  contribution  to  a  CMU.  A  broad  circle  of  PEPP  providers  from 
different sectors of the financial industry would testify for the economic viability of 
PEPPs and increasing inter-sectorial competition and would provide evidence of the 
creation of a true single market for personal pensions as part of the CMU. 

EN 

61 

   EN 

 
 
 
 
 
KPI's  to  monitor  the  enhancement  of  product  features  on  the  personal  pension 
market 

KPI 3: Number of PEPP registrations as taken from the central register kept by 
EIOPA.  

The  number  of  applications  after  introduction  of  the  PEPP  provides  important 
information on the availability and market adoption of features entailed in the PEPP. 

KPI 4 : Relative share of PPPs (including national PPPs and PEPPs) compared 
to household financial assets. 

A statistical increase in the relative share (compared to the baseline scenario) would 
imply that households, after introduction of PEPP, have a higher share of savings in 
PPPs  as  compared  to  holdings  of  other  financial  assets  such  as  e.g.  savings  in 
deposits.  This  statistic  is  available  following  the  household  statistics  survey  of 
EUROSTAT to be combined with information by EIOPA.  

KPI's to monitor the cross border provision and portability of PPPs: 

KPI  5:  Number  of  providers  using  a  passport  over  a  period  of  5  years  (cross 
border  activity  by  providers  either  through  free  provision  of  services  or 
freedom of establishment) 

A  positive  trend  in  the  number  of  providers  using  a  passport  is  an  indicator  of 
increased  cross  border  activity  of  providers.  This  data  should  be  available  through 
competent authorities & ESAs. 

KPI 6: Relative share (in numbers and in value of assets under management) of 
PEPPs  with  more  than  one  (national)  compartment  compared  to  all  PPPs 
(including  national  PPPs  and  PEPPs)  (measure  of  cross  border  activity  by 
individuals).  

A  positive  trend  of  the  share  of  PEPPs  with  more  than  one  compartment  is  an 
indicator that individuals are participating in the PEPP in a cross border context. This 
data should be available through competent authorities & ESAs. 

1.5. Grounds for the proposal/initiative  

 

Requirement(s) to be met in the short or long term  

EIOPA  shall  be  entrusted  with  certain  supervisory  powers  under  the  Regulation. 
Indeed, it will be in charge of authorising PEPPs and establishing and maintaining a 
central register. It will also coordinate supervision, with other ESAs and NCAs.  

In the short term, EIOPA will have to set up internal administrative processes, create 
a  central  register,  develop  implementing  standards  and  will  have  to  be  ready  to 
authorise PEPPs. 

In  the  longer  term,  EIOPA  will  have  to  be  able  to  coordinate  supervision,  by  
coordinating supervision of national competent authorities. EIOPA will also have to 

EN 

62 

   EN 

 
 
 
 
collect  information  and  report  on  market  data  on  which  EIOPA  is  required  by  the 
Regulation to periodically report to the Commission. 

 

Added  value  of  Union  involvement  (it  may  result  from  different  factors,  e.g. 
coordination  gains,  legal  certainty,  greater  effectiveness  or  complementarities).  For 
the purposes of this point 'added value of Union involvement' is the value resulting 
from  Union  intervention  which  is  additional  to  the  value  that  would  have  been 
otherwise created by Member States alone. 

Reasons for action at European level (ex-ante) 

-  Mitigate  the  risk  of  divergent  and  inconsistent  application  of  the  Regulation  by 
different national competent authorities; 

- Multiplicity of national competent authorities involved and risks of conflicts over 
competences (for which binding mediation is proposed); 

As  shown  in  the  impact  assessment,  entrusting  EIOPA  with  registration  and  the 
coordination  of  supervision  of  PEPPs  will  remedy  or  significantly  reduce  those 
problems. 

Expected generated Union added value (ex-post) […] 

Establish a single market for the PEPP and ensure its adequate functioning. 

 

Lessons learned from similar experiences in the past 

This supervisory model is a proven cost-effective method to achieve the objective of 
a true single market and an adequate CMU perspective with a high level of consumer 
protection.  European  Supervisory  Authorities  have  been  charged  with  similar  tasks 
already and the experience, overall, has been positive. 

 

Compatibility and possible synergy with other appropriate instruments 

EIOPA  has  limited  supervisory  powers  in  the  area  of  supervisory  convergence. 
Synergies  could  be  obtained  from  the  existing  EIOPA  powers  in  the  area  of  onsite 
inspections and supervisory convergence although EIOPA is not yet been entrusted 
with the power to grant authorisations.   

EN 

63 

   EN 

 
 
 
1.6. Duration and financial impact  

 Proposal/initiative of limited duration  

 Proposal/initiative in effect from [DD/MM]YYYY to [DD/MM]YYYY  

 Financial impact from YYYY to YYYY  

X Proposal/initiative of unlimited duration 

Implementation with a start-up period from 2019 to 2020, 

followed by full-scale operation. 
1.7. Management mode(s) planned53  

 Direct management by the Commission 

 by its departments, including by its staff in the Union delegations;  

 by the executive agencies  

 Shared management with the Member States  

X Indirect management by entrusting budget implementation tasks to: 

 third countries or the bodies they have designated; 

 international organisations and their agencies (to be specified); 

the EIB and the European Investment Fund; 

X bodies referred to in Articles 208 and 209 of the Financial Regulation; 

 public law bodies; 

  bodies  governed  by  private  law  with  a  public  service  mission  to  the  extent  that 

they provide adequate financial guarantees; 

 bodies governed by the private law of a Member State that are entrusted with the 
implementation of a public-private partnership and that provide adequate financial 
guarantees; 

  persons  entrusted  with  the  implementation  of  specific  actions  in  the  CFSP 

pursuant to Title V of the TEU, and identified in the relevant basic act. 

If more than one management mode is indicated, please provide details in the ‘Comments’ section. 

Comments  

53 

Details of management modes and references to the Financial Regulation may be found on the 
BudgWeb 
site:https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx  

EN 

64 

   EN 

 
                                                 
2. 

MANAGEMENT MEASURES  

2.1 Monitoring and reporting rules  

Specify frequency and conditions. 

In  line  with  already  existing  arrangements  EIOPA  prepares  regular  reports  on  its 
activity  (including  internal  reporting  to  Senior  Management,  MB  reporting,  six 
month  activity  reporting  to  BoS  and  the  production  of  the  annual  report),  and 
undergoes audits by the Court of Auditors and the Internal Audit Service on its use of  
resources. Monitoring and reporting of the present proposed actions will comply with  
already existing requirements. 

2.2 Management and control system  

 

Risk(s) identified  

In relation to the legal, economic, efficient use of appropriations resulting form the 
proposal it is expected that the proposal would not bring about new risks that would 
not be currently covered by an EIOPA existing internal control framework.  

 

Information concerning the internal control system set up 

Management  and  control  systems  as  provided  for  in  the  EIOPA  Regulation  are 
already implemented. EIOPA works closely together with the Internal Audit Service 
of  the  Commission  to  ensure  that  the  appropriate  standards  are  met  in  all  internal 
control areas. These arrangements will apply also with regard to the role of EIOPA 
according  to  the  present  proposal.  Annual  internal  audit  reports  are  sent  to  the 
Commission, Parliament and Council. 

 

Estimate  of  the  costs  and  benefits  of  the  controls  and  assessment  of  the  expected 
level of risk of error  

Not applicable 

2.3 Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures. 

For  the  purposes  of  combating  fraud,  corruption  and  any  other  illegal  activity,  the 
provisions of Regulation (EC) No 883/2013  of the European Parliament and of the 
Council of 11 September 2013 concerning investigations conducted by the European 
Anti-Fraud Office (OLAF) applies to EIOPA without any restriction. 

EIOPA  acceded  to  the  Interinstitutional  Agreement  of  25  May  1999  between  the 
European Parliament, the Council of the European Union and the Commission of the 
European  Communities  concerning  internal  investigations  by  the  European  Anti-
Fraud Office (OLAF) and adopted appropriate provisions for all EIOPA staff. 

EN 

65 

   EN 

 
 
 
 
 
 
EIOPA  currently  has  a  dedicated  anti-fraud  strategy  and  resulting  action  plan.  The 
strategy  and  action  plan  has  been  put  in  place  in  2014.    EIOPA’s  strengthened 
actions in the area of anti-fraud will be compliant to the rules and guidance provided 
by  the  Financial  Regulation  (anti-fraud  measures  as  part  of  sound  financial 
management),  OLAF’s  fraud  prevention  policies,  the  provisions  provided  by  the 
Commission  Anti-Fraud  Strategy  (COM(2011)376)  as  well  as  set  out  by  the 
Common  Approach  on  EU  decentralised  agencies  (July  2012)  and  the  related 
roadmap. 

The  Regulation  establishing  EIOPA  sets  out  the  provisions  on  implementation  and 
control of the EIOPA budget and applicable financial rules. 

[…] 

EN 

66 

   EN 

 
3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1  Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

Existing budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure 

Contribution  

Heading of 
multiannual 
financial 
framework 

Number  
[…][Heading………………………...………
……] 

Diff./Non-
54 
diff.

from 
EFTA 
countries
55 

from 
candidate 
56 
countries

from third 
countries 

within the 
meaning of 
Article 21(2)(b) of 
the Financial 
Regulation  

1a 

12 02 05 EIOPA 

Diff. 

NO 

NO 

NO 

NO 

Heading of 
multiannual 
financial 
framework 

New budget lines requested / Not applicable  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of 
expenditure 

Contribution  

Number  
[…][Heading 
………………………………………] 

Diff./Non-
diff. 

from 
EFTA 
countries 

from 
candidate 
countries 

from third 
countries 

within the 
meaning of 
Article 21(2)(b) of 
the Financial 
Regulation  

[…][XX.YY.YY.YY] 

YES/N
O 

YES/NO 

YES/N
O 

YES/NO 

54 
55 
56 

Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidates from the Western Balkans. 

EN 

67 

   EN 

 
 
 
 
 
                                                 
3.2 Estimated impact on expenditure  

 

Summary of estimated impact on expenditure  

Heading of multiannual financial  
framework  

Number 

[Heading 1A.……………………………………………………………….] 

EUR million (to three decimal places) 

DG: FISMA 

 Operational appropriations  

Year 
2019 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

Number of budget line 12 02 05 EIOPA 

Commitments 

(1) 

0,348 

0,251 

Number of budget line 

Payments 

Commitments 

Payments 

(2) 

(1a) 

(2a) 

0,348 

0,251 

Appropriations  of  an  administrative  nature  financed  from  the 
envelope of specific programmes57  

PM 100% would 
be 870,5k for 
2019 and 629,2k 
for2020 
respectively, due 
to co-financing 
arrangement 
60/40, only 40% is 
mentioned here  

57 

Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, 
direct research. 

EN 

68 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Number of budget line 

TOTAL appropriations 
for DG FISMA – (40%) 

Commitments 

Payments 

 TOTAL operational appropriations  

Commitments 

Payments 

  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelope for specific programmes  

0,348 

0,251 

0,348 

0,251 

(3) 

=1+1a 
+3 

=2+2a 

+3 

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADING <….> 
of the multiannual financial framework 

Commitments 

=4+ 6 

Payments 

=5+ 6 

If more than one heading is affected by the proposal / initiative: 

 TOTAL operational appropriations  

Commitments 

Payments 

  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelope for specific programmes  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADINGS 1 to 4 
of the multiannual financial framework 
(Reference amount) 

Commitments 

=4+ 6 

Payments 

=5+ 6 

EN 

69 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Heading of multiannual financial  
framework  

5 

‘Administrative expenditure’ 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6)  

TOTAL 

EUR million (to three decimal places) 

DG: <…….> 

 Human resources  
 Other administrative expenditure  

TOTAL DG <…….> 

Appropriations  

TOTAL appropriations 
under HEADING 5 
of the multiannual financial framework  

(Total  commitments  = 
Total payments) 

Year 
N58 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

EUR million (to three decimal places) 

TOTAL appropriations  
under HEADINGS 1 to 5 
of the multiannual financial framework  

Commitments 

0,348 

0,251 

Payments 

0,348 

0,251 

58 

Year N is the year in which implementation of the proposal/initiative starts. 

EN 

70 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
 

Estimated impact on operational appropriations  

 The proposal/initiative does not require the use of operational appropriations  

X  The proposal/initiative requires the use of operational appropriations, as explained below: NOT APPLICABLE 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

OUTPUTS 

Commitment appropriations in EUR million (to three decimal places) 

Enter as many years as necessary to show the 
duration of the impact (see point 1.6) 

TOTAL 

o
N

Cost  N

o

Cost 

o
N

Cost 

o
N

Cost  N

o

Cost  N

o

Cost  N

o

Cost 

Total 
No 

Total 
cost 

Indicate 
objectives and 
outputs  

 

Type
59

Avera
ge 
cost 

SPECIFIC OBJECTIVE No 1

60

… 

- Output 

- Output 

- Output 

Subtotal for specific objective No 1 

SPECIFIC OBJECTIVE No 2 ... 

- Output 

Subtotal for specific objective No 2 

TOTAL COST 

59 
60 

Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.). 
As described in point 1.4.2. ‘Specific objective(s)…’  

EN 

71 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
 

 

Estimated impact on appropriations of an administrative nature 

Summary  

X  The  proposal/initiative  does  not  require  the  use  of  appropriations  of  an 

administrative nature  

 The  proposal/initiative  requires  the  use  of  appropriations  of  an  administrative 

nature, as explained below: 

EUR million (to three decimal places) 

Year 
61
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as necessary to show the 
duration of the impact (see point 1.6) 

TOTAL 

HEADING 5 
of the multiannual 
financial framework 

Human resources  

Other administrative 
expenditure  

Subtotal HEADING 5 
of the multiannual 
financial framework  

62 

Outside HEADING 5
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework  

TOTAL 

The  appropriations  required  for  human  resources  and  other  expenditure  of  an  administrative  nature  will  be  met  by 
appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the 
DG,  together  if  necessary  with  any  additional  allocation  which  may  be  granted  to  the  managing  DG  under  the  annual 
constraints.
allocation 

procedure 

budgetary 

light 

and 

the 

of 

in 

61 
62 

Year N is the year in which implementation of the proposal/initiative starts. 
Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of 
EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

72 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.1 Estimated requirements of human resources 

X  The proposal/initiative does not require the use of human resources.  

 The proposal/initiative requires the use of human resources, as explained below: 

Estimate to be expressed in full time equivalent units 

Year 
N 

Year 
N+1 

Year N+2 

Ye
ar 
N+
3 

Enter 
as 
many 
years 
as 
necessa
ry to 
show 
the 
duratio
n of the 
impact 
(see 
point 
1.6) 

 Establishment plan posts (officials and temporary staff) 

XX 01 01 01 (Headquarters and Commission’s 
Representation Offices) 

XX 01 01 02 (Delegations) 

XX 01 05 01 (Indirect research) 

10 01 05 01 (Direct research) 

 External staff (in Full Time Equivalent unit: FTE)

63

XX 01 02 01 (AC, END, INT from the ‘global 
envelope’) 

XX 01 02 02 (AC, AL, END, INT and JED in the 
delegations) 

XX 01 04 yy 

64

- at Headquarters 

- in Delegations  

XX 01 05 02 (AC, END, INT - Indirect research) 

10 01 05 02 (AC, END, INT - Direct research) 

Other budget lines (specify) 

TOTAL 

XX is the policy area or budget title concerned. 

The human resources required will be met by staff from the DG who are already assigned to management of the 
action  and/or  have  been  redeployed  within  the  DG,  together  if  necessary  with  any  additional  allocation  which 
may  be  granted  to  the  managing  DG  under  the  annual  allocation  procedure  and  in  the  light  of  budgetary 
constraints. 

Description of tasks to be carried out: 

Officials and temporary staff 

External staff 

63 

64 

AC=  Contract  Staff;  AL  =  Local  Staff;  END=  Seconded  National  Expert;  INT  =  agency  staff; 
JED= Junior Experts in Delegations.  
Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines). 

EN 

73 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.4. Compatibility with the current multiannual financial framework  

X  The  proposal/initiative  is  compatible  with  the  current  multiannual  financial 

framework. 

 The  proposal/initiative  will  entail  reprogramming  of  the  relevant  heading  in  the 

multiannual financial framework. 

Explain what reprogramming is required, specifying the budget lines concerned and the corresponding 
amounts. 

[…] 

 The  proposal/initiative  requires  application  of  the  flexibility  instrument  or 

revision of the multiannual financial framework. 

Explain what is required, specifying the headings and budget lines concerned and the corresponding 
amounts. 

[…] 

3.2.5. Third-party contributions  

The proposal/initiative does not provide for co-financing by third parties.  

X The proposal/initiative provides for the co-financing estimated below: 

Appropriations in EUR million (to three decimal places) 

Year 
2019 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

Total 

Specify  the  co-financing 
body - NCA's 60% 

0,870 

0,629 

TOTAL appropriations 
co-financed  

0,522 

0,377 

PM 100% 

PM 60% due 
to 
cofinancing 
arrangement 

EN 

74 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.3 Estimated impact on revenue  

X  The proposal/initiative has no financial impact on revenue. 

 The proposal/initiative has the following financial impact: 

 

 

on own resources  

on miscellaneous revenue  

Appropriation
s available for 
the current 
financial year 

Budget revenue line: 

Article …………. 

EUR million (to three decimal places) 

Impact of the proposal/initiative

65

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as necessary to show 
the duration of the impact (see point 1.6) 

For miscellaneous ‘assigned’ revenue, specify the budget expenditure line(s) affected. 

[…] 

Specify the method for calculating the impact on revenue. 

[…] 

65 

As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net 
amounts, i.e. gross amounts after deduction of 25 % for collection costs. 

EN 

75 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
                                                 
ANNEX  to  Legislative  Financial  Statement  for  Proposal  for  Regulation  on  pan-
European Personal Pension Products (PEPP) 

Applied methodology and main underlying assumptions 

The  costs  related  to  the  coordination  of  supervision  of  PEPP  by  EIOPA  have  been 
estimated  according  to  three  cost  categories:  the  staff  costs, the  infrastructure costs 
and the operations costs, in line with the classification in the budget of EIOPA.  

According  to  preliminary  current  estimations  by  the  Commission,  the  PEPP 
authorisation and supervisory tasks will require 3 new staff members in 2019 and 1 
additional staff member for the year 2020. This would be in addition to the staff that 
are  currently  working  in  EIOPA  and  that  are  covered  under  the  current  budget  for 
EIOPA. The costs are shared on a 60/40 basis with Member States. 

The  need  for  increased  staff  numbers  reflects  the  additional  tasks  entrusted  by  the 
Regulation to EIOPA and relates to the coordination of supervision of PEPPs: 

 

 

 

 

 

 

Prepare for and manage authorisation process; 
Set up and maintain a central registry66; 

Develop technical standards foreseen in the Regulation; 

Facilitate cooperation between national competent authorities; 

Prepare  the  take  up  of  coordination  of  ongoing  supervision  by  the  national 
competent authorities: set up reporting and monitoring framework 

Annually, monitor and report on KPI's  

These new tasks are set out in the proposed Regulation and further spelled out in the 
explanatory  memorandum.  They  include,  but  are  not  limited  to,  the  registration  of 
PEPPs, coordination of supervision of registered PEPPs, requiring periodic contacts 
with  the  management/  staff  of  the  supervised  entities,  responding  to  questions, 
complaints or requests by national competent authorities or consumers, monitoring of 
the  compliance  of  PEPPs  with  requirements  set  out  in  the  PEPP  Regulation, 
requesting  information  from  PEPPs  or  persons  involved  in  the  management  of  the 
schemes, conducting onsite inspections, examining records and hearing of persons on 
alleged breaches of the Regulation. EIOPA  could also fulfill a role in the power of 
national  competent  authorities  to  withdraw  the  registration  and  take  other 
supervisory measures as listed in Article 57 of the PEPP Regulation and to impose 
fines and periodic penalty payments on PEPPs which are in breach of the Regulation, 
providing  evidence  about  the  breach  and  proposing  the  amount  of  the  fine  or  the 
penalty payment. Also, EIOPA could provide binding mediation in the event national 
competent authorities require so. 

Below, the general assumptions  for the calculation of additional resources, the cost 
of new headcount and the aditional infrastructural costs are described.   

66 

Independently from IT and technical support related costs. 

EN 

76 

   EN 

 
 
 
 
                                                 
General assumptions made when calculating additional resources 

When  calculating  the  additional  resources  the  following  assumptions  have  been 
made. 

It is assumed that the Regulation shall enter into application at the start of 2019 and 
based on general interest expressed during stakeholder meetings, it is estimated that 
ca.  325  providers  will  apply  for  PEPP-registrations  in  the  following  5  years  based 
upon the experience of other new regime like IORP (80 registrations in 2 years and 
LTIF  5  in  one  year.  Once  registered,  these  PEPPs  are  to  be  supervised  by  national 
competent authorities which supervision is coordinated by EIOPA. 

Additional  posts  are  assumed  to  be  either  permanent  staff  or  temporary  agents  of 
grade AD7 with average salary costs of EUR 138.000 as taken from Table 1. 

As  a  general  remark,  costs  for  EIOPA  are  currently  shared  between  the  Member 
States and the Commission on a 60/40 basis. 

Table 1 Personnel Costs  

Category of 
personnel 

Total average cost to be used for 
the financial statements(*)  

Average cost without 
"habillage" (**)  

Official  

138.000 €/year 

115.000 €/year 

Temporary 
agent 

138.000 €/year 

115.000 €/year  

(**) Real estate expenses, furniture, IT, etc. 

Other assumptions 

Due  to  location  of  EIOPA  in  Frankfurt,  a  salary  correction  coefficient  of  0,972  is 
taken due to the lower cost of living compared to Brussels. 

Mission costs are estimated at €10,000 per staff member per year. 

Recruitment related costs (travel, hotel, medical examinations, installation and other 
allowances, removal costs, etc) are estimated at €12,700 per staff member. 

Calculation of additional headcount  

For the calculation of the additional headcount with EIOPA the new tasks are divided 
in  three  main  areas  of  new  work  attributed  to  EIOPA:  Authorisation,  coordinating 
supervision  and  policy  work.  For  these  areas,  the  following  estimate  of  amount  of 
work is taken into account. 

For authorisation, it is estimated that one officer (for clarity assumed to be equal to 
one Fte) could process 1 authorisation per two weeks which translates in ca. 25 per 
year. It is assumed that in the first year of application (i.e. 2019) there will be ca. 25 
applications, rising to 75 in each of the following full years. 

EN 

77 

   EN 

 
 
 
   
 
Actual  coodination  of  supervision  duties  will  be  low  in  the  first  year  when  the 
amount of schemes to be supervised by national competent authorities is still small, 
picking  up  with  the  pace  of  schemes  to  be  authorized  each  year.  Some  synergies 
could  be  achieved  building  on  the  existing  powers  for  EIOPA  in  the  area  of 
supervisory convergence, albeit that the new powers attributed to EIOPA for PEPP 
are more extensive. 

For  policy  work  it  is  first  taken  into  account  that  the  regulation  contains  several 
mandates  for  EIOPA  to  work  on  technical  standards.  Secondly,  monitoring  and 
reporting on the key performance indicators would be expected. Some synergies are 
to  be achieved here;  EIOPA already has  policy expertise that could  take on part of 
the new tasks while the need to attract expertise in the specific area is catered for.     

Dedicated IT and support entails mainly the establishment of the central registry, or 
PEPP  register,  as  well  as  the  supporting  infrastructure  for  the  reporting  of  the  key 
performance indicators and is for the purposes of headcount calculations assumed to 
be covered with EIOPA's current headcount.   

Table 2 presents the total estimated additional headcount per area for EIOPA in the 
area of PEPP. 

Table 2 Total Fte per annum per area for PEPP 

Total Fte per 
area for PEPP 

2019 

2020 

Authorisation 

Coordinating 
supervision 

Policy work 

Total 

1 

1 

1 

3 

2 

1 

1 

4 

Future needs post-2020 will be calculated and allocated in the context of the future 
Multi Annual Financial Framework.  

Calculation of the infrastructure expenditure  

The main expenditure in additional infrastructure relates to the setting up of a central 
registry,  accompanying  reporting  requirements  and  the  setting  up  of  a  database  to 
monitor  the  key  performance  indicators.  For  these  IT  related  expenditures  it  is 
assumed  in  total  EUR  400.000  is  required  with  10%  annual  maintenance  costs 
calculated in. Assumptions underlying this total amount:  

 

Set up and maintain a central registry or PEPP Register 

EN 

78 

   EN 

 
 
 
       
 
        
 

 

The creation of a ‘central registry’ similar to one of the existing registers 
could  be  envisaged,  e.g.  the  Register  of  IORPs  Prudential  Provisions; 
with a few hundred pension products covered containing product name, 
financial data, KPIs and potentially qualitative information; updated once 
a year; operation starts in 2019, ultimately beginning of 2020; 

To prepare for the take up for coordination of ongoing supervision: set up 
reporting and monitoring framework, the collected ‘central registry’ data 
should  be  integrated  into  EIOPA’s  Central  Repository  and  should  be 
made  available  through  the  corporate  Business  Intelligence  solution; 
integration  work  would  be  necessary  and  new  licences  for  new  staff 
members will need to be acquired. 

Total amounts of expenditure 2019-2020 

Taken into account the above assumption the total amounts estimated for the PEPP 
tasks to be performed by EIOPA for the period 2019-2020 is presented in Table 3. 

Table 3 Total EIOPA related expenditures for PEPP in the years 2019-2020 

Amounts in thousands 

Cost type 

Calculation 

Staff 
expenditure/ 
Salaries and 
allowances 

Expenditure 
related to 
recruitment 

Mission 
expenses 

Infrastructure 
/ IT 

Total (*) 

138k per 
staff x 0,972  

12,7k fixed 
per new staff 
member  

10k per staff 
member/year 

400k + 10 % 
maintenance 

2019 

402,4 

2020 

536,5 

38,1 

12,7 

30 

400 

40 

40 

870,5 

629,2 

 (*) Total amounts: not taking into account the 60/40 allocation Member States/ 
Commission for EIOPA budget. 

EN 

79 

   EN