Study on the feasibility of a European Personal Pension Framework : final report.
Date: 2017-09-26
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union
Subjects: European social policy, feasibility study, pension scheme, population ageing, social security, supplementary pension, tax system

Final report 
EY 
FISMA/2015/146(02)/D 

Study on the feasibility of a 
European Personal Pension 
Framework 

June 2017 

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Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Project team  

The following people from EY have contributed to this report: 

  Vincent Natier 
  Franck Chevalier 
  Caroline Chaize-Lang 
  Luc Veyssière 

DISCLAIMER 

The  information  and  views  set  out  in  this  study  are  those  of  the  authors  and  do  not 
necessarily  reflect  the  official  opinion  of  the  European  Commission.  The  European 
Commission  does  not  guarantee  the  accuracy  of  the  data  included  in  this  study. 
Neither  the  European  Commission  nor  any  person  acting  on  the  European 
Commission’s  behalf  may  be  held  responsible  for  the  use  which  may  be  made  of  the 
information contained therein. 

DOI: 10.2874/342225 
ISBN: 978-92-79-62029-4 

© European Union, (2017). 

Reproduction is authorised provided the source is acknowledged  

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Study on the feasibility of a European Personal Pension Framework 

Table of Figures ................................................................................................. 5 

List of Tables .................................................................................................... 6 

Introduction ...................................................................................................... 7 

Background and general objectives of the study ............................................... 7 

Personal pension products in the scope of the study .......................................... 9 

Methodological remarks ................................................................................18 

Clarifications on tax and features questionnaire ..........................................18 

Clarifications on selected questions and answers for clustering purposes ........20 

Information sources and interpretation of the results ...................................23 

Purpose of the study ....................................................................................30 

Tax mapping, presentation and analysis of the  taxation regimes,  clustering according 
to the products’ key features (1) ........................................................................31 

Tax mapping: tax categorization trees and Tax ID Card for  each personal pension 
product.......................................................................................................31 

Tax categorization trees ...........................................................................31 

Tax ID Card for personal pension products .................................................42 

Tax regime presentation and analysis (4) ..................................................... 157 

Tax regime analysis ............................................................................... 160 

Clustering analyses based on product feature requirements ............................ 165 

Summary of the clustering analyses performed ......................................... 165 

Clustering A based on all the feature requirements selected ....................... 167 

Clustering B based on 17 out of 20 feature requirements ........................... 172 

Clustering C based on 20 feature requirements ......................................... 176 

Clustering D based on the decumulation options ....................................... 183 

PPP market overview, products with high market penetration and their features ..... 192 

The PPP Market overview (2) ....................................................................... 192 

Assets under Management (AuM) ............................................................ 192 

Participation in personal pension plans ..................................................... 195 

Contributions to personal pension plans ................................................... 196 

Products with the highest market penetration and their key features (3) .......... 197 

Computation of a penetration index ......................................................... 198 

Description of the five PPPs with the highest market penetration index (MPI) 199 

Grouping of PPP products ....................................................................... 200 

Interpretation of the penetration index .................................................... 201 

Key features of the personal pension products ............................................... 202 

Technical feasibility assessment (6) .................................................................. 207 

Practical implementation aspects ................................................................. 207 

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Study on the feasibility of a European Personal Pension Framework 

Presentation of the preferred PEPP features according to stakeholders, based in 
particular on the workshop results ........................................................... 207 

Added value of the PEPP with preferred  features  compared with available PPPs
 .......................................................................................................... 245 

Analysis of the PEPP features with respect to PPPs with a high MPI score ..... 245 

Assessment  of  the  preferred  PEPP  features  in  comparison  with  local  PPP 
legislation and tax regimes. .................................................................... 247 

Suggested implementation/key areas of discussion ................................... 264 

Analysis of tax sensitivity of five aspects identified by DG FISMA................. 266 

Assessment of the market potential for a PEPP in the EU ................................ 271 

Main assumptions ................................................................................. 271 

Methodology overview ........................................................................... 272 

Conversion of the penetration index into AuM over HHFA ........................... 272 

Estimation of the market size ................................................................. 272 

Conclusion ..................................................................................................... 274 

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Study on the feasibility of a European Personal Pension Framework 

Table of Figures 

Figure 1 : General approach of the study ........................................................................... 8 
Figure 2: Number of PPPs per Member State ..................................................................... 28 
Figure 3 – Comparison of three curves plotted with different scales ...................................... 29 
Figure 4: Categorisation of PPPs in light of the tax regime for in-payment ............................. 31 
Figure 5: Categorisation of PPP on the basis of the tax regime of the in-payment phase ......... 32 
Figure 6: Proportion of each tax incentive limitation in the ‘Partially exempt’ category ............ 33 
Figure 7: Categorisation of PPPs with regard to the taxation applicable to the yield ................ 35 
Figure 8: Percentage  of decumulation option possibilities ................................................... 36 
Figure 9: Categorisation of PPPs with regard to the tax regime during the decumulation phase 36 
Figure 10: Categorisation of PPPs with regard to the option to benefit from early out-payment, 
and corresponding tax regimes ........................................................................................ 38 
Figure 11: Comparison of the early out-payment situations and decumulation tax regimes ..... 39 
Figure 12: Categorisation of PPPs in light of the possibility of domestic switching ................... 40 
Figure 13: Categorisation of PPPs in light of the possibility of cross-border switching .............. 40 
Figure 14: PPP ID Card grid ............................................................................................. 42 
Figure 15: Tax regime model ......................................................................................... 157 
Figure 16: Proportion of PPPs benefiting from  an  incentive on in-payments (tax regimes1 & 2)
 ................................................................................................................................. 160 
Figure 17: Categorisation of PPPs in tax regime 1 given the taxation on in-payments ........... 161 
Figure 18: Categorisation of PPPs in tax regime 1 given the taxation on out-payments ......... 161 
Figure 19: Categorisation of PPPs in tax regime 2 given the taxation on in-payments ........... 162 
Figure 20: Categorisation of PPPs in tax regime 2 given the taxation on out-payments ......... 163 
Figure 21: Proportion of decumulation option possibilities ................................................. 163 
Figure 22: Categorisation of PPPs in tax regime 3 given the taxation out-payments ............. 164 
Figure 23: Categorisation of PPPs in tax regime 4 given the taxation on out-payments ......... 164 
Figure 24: Results of Clustering B .................................................................................. 173 
Figure 25: Decumulation options in common identified ..................................................... 183 
Figure 26: Results for Group1 in Clustering D .................................................................. 186 
Figure 27: Results for Group2 in Clustering D .................................................................. 187 
Figure 28: Results for Group3 in Clustering D .................................................................. 187 
Figure 29 : PPP Assets under Management by Member State ............................................. 193 
Figure 30: Scatter plot of assets under management as a function of household financial assets
 ................................................................................................................................. 194 
Figure 31: PPP coverage rate by Member State ................................................................ 195 
Figure 32: Scatter plot of number of holders as a function of population over 15 years old .... 196 
Figure 33: In-payments made to PPPs by Member State ................................................... 196 
Figure 34: In-payments to PPPs over gross annual savings ............................................... 197 
Figure 35 - Relationship between GDP and HHFA ............................................................. 197 
Figure 36 - Visual measurement of distance from points to trend line ................................. 199 
Figure 37: PEPP ID Card - preferred PEPP features ........................................................... 242 
Figure 38: PEPP ID Card - adapted PEPP features ............................................................. 259 
Figure 39 Relation between AuM/ HHFA and the penetration index ..................................... 272 

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Study on the feasibility of a European Personal Pension Framework 

List of Tables 

Table 1: PPPs in the scope of the study ...............................................................10 
Table 2 : Coded names of the PPPs for the purpose of the study .............................14 
Table 3 : Comparison between EIOPA and current study definitions ........................17 
Table 4: Clarifications on selected questions and answers for clustering purposes .....20 
Table 5: Data quality assessment .......................................................................25 
Table 6: State and employer subsidies ................................................................34 
Table 7: Overview of the clustering analysis results ............................................ 165 
Table 8: Questions selected for clustering analysis purposes ................................ 167 
Table 9: Results of Clustering A ........................................................................ 169 
Table 10: Answers to questions selected for Clustering B ..................................... 174 
Table 11: Coded answers obtained in Cluster1 ................................................... 175 
Table 12: Value applied to coded answers obtained in Clustering C ....................... 176 
Table 13: Clusters identified in Clustering C ....................................................... 179 
Table 14: Results of Clustering C ...................................................................... 180 
Table 15: Answers obtained in Clustering C – reading grid ................................... 181 
Table 16: Answers to the questions selected for Group1 in Clustering D ................ 189 
Table 17: Answers to the questions selected for Group2 in Clustering D ................ 190 
Table 18: Answers to the questions selected for Group3 in Clustering D ................ 191 
Table 19: Detailed score of the five PPPswith the highest penetration index ........... 199 
Table 20: Grouping of PPP into More successful, Successful and Less successful ..... 200 
Table 21: Common features of products with the highest MPI .............................. 202 
Table 22: Description of the features common to a majority of PPPs ..................... 204 
Table 23: Rate computed on the PPP ................................................................. 206 
Table 24: PEPP features found in the five PPPs with the highest MPI ..................... 245 
Table 25: Preferred PEPP features qualifying as distinctive - accumulation phase .... 249 
Table 26: Preferred PEPP features qualifying as distinctive - switching................... 250 
Table 27: Comparison between the preferred PEPP features and the PPP features ... 252 
Table 28: Analysis of the result of the comparison .............................................. 255 
Table 29: Adapted analysis of the comparison .................................................... 260 

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Study on the feasibility of a European Personal Pension Framework 

Introduction 

Background and general objectives of the study 
On 30 September 2015, the European Commission launched the Capital Markets Union 
(CMU)  Action  to  help  build  a  true  single  market  for  capital  across  the  28  European 
Union Member States.  

In this communication, the European Commission called for an exploration of multiple 
ways  to  support  private  retirement  savings  with  the  appropriate  level  of  consumer 
protection  and  build  an  EU  market,  a  regulatory  template  for  pension  providers  to 
offer personal pension products across the European Union (hereafter “EU”)1. 

A clear prerequisite to any European legislative initiative was to determine whether EU 
legislation is required. 

At the same time, on 2 February 2016, the EIOPA launched a consultation on “EIOPA’s 
advice  on  the  development  of  an  EU  single  Market  for  PPP”.  Based  on  the  results  of 
this  consultation,  on  4  July  2016  the  EIOPA  issued  advice  with  a  proposal  for  a 
standardised Pan-European Personal Pension Product (hereafter “PEPP”) with a defined 
set of regulated and flexible components. 

As  part  of  the  CMU  action  plan,  on  27  July  2016  the  DG  FISMA  launched  a  public 
consultation  on  a  potential  EU  personal  pension  framework.  This  consultation  will  be 
closed on 31 October 2016. 

On  14  September  2016,  the  European  Commission  issued  a  communication2  stating 
that  “The  Commission  will  consider  proposals  for  a  simple,  efficient  and  competitive 
EU  personal  pension  product”.  Proposals  were  to  include  an in-depth overview  of  tax 
regimes  applied  to  Personal  Pension  Products  (hereafter  “PPP”)  within  the  EU  and 
provide  a  better  vision  and  understanding  of  the  European  Personal  Pensions  Market 
by identifying types of products with significant identical tax requirements. 

The  DG  FISMA  mandated  EY  to  perform  a  study  on  the  feasibility  of  a  European 
Personal Pensions Framework.  

This study should be supplemented by the following: 

  Tax mapping: the mapping of the tax, social and labour requirements for the 

available products (1) 

  The PPP market overview: a description of the PPP markets in each Member 

State (2) 

  Products  with  high  market  penetration  and  their  key  features:  the 
ranking of the products with high market penetration, their key features with a 
focus  on  the  successful  ones  and  an  understanding  of  the  sensitivity  of  the 
products  vis-à-vis  certain  key  features,  in  the  context  of  the  identification  of 
certain clusters from a tax perspective (2, 3 and 4) 

  A technical feasibility assessment (5 and 6) 

1 30 September 2015 - Communication from the Commission to the European Parliament, the Council, the 
European  Economic  and  Social  Committee  and  the  Committee  of  the  Regions  -  Action  Plan  on  Building  a 
Capital Markets Union -  
2  Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Central 
Bank,  the  European  economic  and  social  committee  and  the  committee  of  the  regions  -  Capital  Markets 
Union - Accelerating Reform 

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This  understanding  of  the  European  Personal  Pensions  Market,  in  the  light  of  the 
different tax regimes, is a prerequisite in order to analyse the feasibility of a European 
initiative in the field of personal pension products.  

This study was performed following the approach detailed below (section 1).  

Figure 1 : General approach of the study 

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Study on the feasibility of a European Personal Pension Framework 

Personal pension products in the scope of the study 
Personal pension products (hereafter “PPPs”) in the scope of this study are defined in 
the  Tender  specifications  as  “non-state  based  (so  excluding  first  and  second  pillar 
pensions) retirement financial products which: 

  are  based  on  a  contract  between  an  individual  saver  and  a  non  state-based 

entity on a voluntary basis, with an explicit retirement objective; 

  provide for capital accumulation until retirement, and where the possibilities for 

early withdrawal are limited; 

  provide  an  income  to  savers  after  retirement,  the  form  of  which  can  be  laid 

down in national law such as annuitisation or lump sums”. 

In  the  table  below,  we  have  listed  49  products  in  28  Member  States  which 
correspond  to  these  criteria.  Our  study  is  based  on  this  list  and  is  limited  to  these 
products. 

Nota bene: the original technical offer was based on the 55 products presented below. 
For  a  variety  of  reasons  (products  merging,  products  not  existing  anymore,  products 
not corresponding to the criteria), the current study is based on a list of 49 products. 

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Table 1: PPPs in the scope of the study 

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Austria 

Belgium 

Bulgaria 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

For practical reasons, the following coded names have been adopted for the products: 

Table 2 : Coded names of the PPPs for the purpose of the study 

Country 

English name 

Local name 

State-sponsored retirement 
provision  

Prämienbegünstigte 
Zukunftsvorsorge (PZV) 

Long term savings plan 

Langetermijnsparen 

Pension Savings Plan 

Pensioensparen 

Coded name 

Austria_PZV 

Belgium_LP 

Belgium_PP 

Universal voluntary pension plan 

Yniversalen dobrovolen pensionen 
plan 

Bulgaria_UVPF 

Professional voluntary pension 
plan 

Dobrovolen pensionen plan 

Croatia 

Open voluntary pension funds 

Dobrovoljni mirovinski fondovi 

Cyprus 

Individual insurance pension 
plans 

Συνταξιοδοτικά Προγράμματα 

Czech Republic 

Supplementary saving plan 

Doplňkové penzijní spoření 

Retirement pension 

Alderspension 

Denmark 

Annuity pension 

Ratepension/Ophorende livrente 

Estonia 

Finland 

France 

Age savings 

Aldersopsparing 

Voluntary supplementary funded 
pension schemes 

Vabatahtlik täiendav 
kogumispension 

Individual pension insurance 
taken out by an individual 

Popular retirement savings plan 

Personal retirement savings plan 
for self- employed workers 

Personal retirement savings plan 
for farmers 

Vapaaehtoiseen yksilölliseen 
eläkevakuutukseen ja 
pitkäaikaissäästämissopimukseen 

Plan Epargne retraite Populaire 
(PERP) 

Contrats Madelin TNS 

Contrats Madelin Agricole 

Government-subsidised pension 
saving products 

Riester-Rente 

Germany 

Basis Pensions 

Rürup-Rente 

Bulgaria_PVPF 

Croatia_OPF 

Cyprus_IIP 

Czech Republic_SSP 

Denmark_Alder 

Denmark_RP 

Denmark_Aldersop 

Estonia_VSF 

Finland_IP 

France_PERP 

France_MadelinTNS 

France_MadelinAgr 

Germany_Riester 

Germany_Rürup 

Private Pensions 

Private Altersvorsorge 

Greece 

Personal retirement savings plan 
Individual 

Συνταξιοδοτικά Προγράμματα 

Hungary 

Voluntary mutual pension fund 

Önkéntes kölcsönös nyugdíjpénztár 

Ireland 

Italy 

Retirement Annuity Contracts 
(RACs) 

Retirement Annuity Contracts 
(RACs) 

Personal Retirement Savings 
Accounts (PRSAs) 

Personal Retirement Savings 
Accounts (PRSAs) 

Individual pension plans provided 
through life insurance contracts 

Piani individuali previdenziali (PIPs) 

Open pension funds 

Fondi Pensione Aperti 

Germany_PP 

Greece_PRSP 

Hungary_PRS 

Ireland_RAC 

Ireland_PRSA 

Italy_PIP 

Italy_OPF 

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Country 

English name 

Local name 

Latvia 

Private pension fund 

Privātais pensiju fonds 

Lithuania 

Third pillar - voluntary 

Savanoriško pensijų taupymo 

Coded name 

Latvia_PPF 

Lithuania_VF 

Luxembourg 

Individual pension savings 
contracts 

Contrat individuel de prévoyance-
vieillesse 

Luxembourg_IPS 

Personal Retirement Pension 
Plans approved by the 
Commissioner for Revenue in 
Malta 

Personal Retirement Pension 
Schemes not approved by the 
Commissioner for Revenue in 
Malta 

Bank saving account for 
retirement 

Investment share in an 
investment institution or UCITS 
for retirement payments 

Malta 

Netherlands 

Personal Retirement Pension Plans 
approved by the Commissioner for 
Revenue in Malta 

Malta_PPPa 

Personal Retirement Pension 
Schemes not approved by the 
Commissioner for Revenue in Malta 

Malta_PPPna 

Lijfrentespaarrekening 

Lijfrentebeleggingsrecht 

Retirement annuities insurance 

Lijfrenteverzekering 

Individual retirement account  

Indywidualne konto emerytalne (IKE) 

Poland 

Employee retirement plan  

Pracowniczy program emerytalny 
(PPE) 

Netherlands_RBSA 

Netherlands_RAInsA 

Netherlands_RAInsD 

Poland_IKE 

Poland_PPE 

Individual retirement precaution 
account  

Indywidualne konto zabezpieczenia 
emerytalnego (IKZE) 

Poland_IKZE 

Portugal 

Life insurance with specific 
retirement objective 

Contrato de aposentadoria de 
seguro de pensao 

Life insurance with specific 
retirement objective 

Seguro de vida – pessoas com 
deficiencia 

Pension funds - individual 
contracts 

Fundos de Pensoes Abertos 

Retirement Savings Plan (PPR) 

Plano Poupança Reforma 

Romania 

Supplementary pension plan 

Schema de pensii facultative 

Slovakia 

Supplementary pension plan 

Dôchodkového poistenia 

Portugal_LifeInsR 

Portugal_LifeInsH 

Portugal_PF 

Portugal_PPR 

Romania_SPP 

Slovak Republic_PPF 

Slovenia 

Voluntary supplementary pension 
insurance scheme 

Prostovoljno dodatno pokojninsko 
zavarovanje 

Slovenia_VSP 

Individual Personal Pension Plan 

Plan de pensiones individual 

Spain 

Mutual pension provident entities  Mutualidades de prevision social 

Insured pension plans 

Planes de Previsión Asegurados 

Sweden 

Individual Pension Savings IPS 

NA 

Self-invested personal pensions 
(SIPPs) 

Self-invested personal pensions 
(SIPPs) 

United Kingdom 

Stakeholder pensions 

Stakeholder pensions 

Spain_IPP 

Spain_MP 

Spain_PPA 

Sweden-IPS 

United 
Kingdom_SIPP 

United 
Kingdom_Stakeh 

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As  mentioned  in  “EIOPA's  advice  on  the  development  of  an  EU  Single  Market  for 
personal  pension  products  (PPP)”,  EIOPA  uses  its  own  definition  of  personal  pension 
products. 

Based  on  this  definition  developed  in  its  2014  preliminary  report  "Towards  an  EU-
Single  Market 
includes 
characteristics that are different to those considered for the purpose of this study.  

for  personal  pensions”,  EIOPA’s  definition  of  PPPs 

Of the 49 products in 28 Member States included in the scope of the current study, 29 
are included in the EIOPA database. The EIOPA data base contains 67 products. 

The  main  difference  is that  the  EIOPA definition  includes mandatory  retirement 
products which are excluded from the scope of the current study. 

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Table 3 : Comparison between EIOPA and current study definitions 
PPP definition for the purpose of the study 
Private retirement financial products 

Similarity 

Based  on  a  contract  between an individual  saver and a 
private entity 
On a voluntary basis 

With an explicit retirement objective 
Provide  for  capital  accumulation  until  retirement,  and 
where the possibilities for early withdrawal are limited, 

Provide an income  to  savers  after retirement,  the  form 
of  which  can  be  laid  down  in  national  law  such  as 
annuitisation or lump sums". 
EIOPA definition criteria 

Similarity 

select  material  aspects  of 

Individual  membership  –  Employers  do  not  play  a  role 
in  establishing  or  sponsoring  a  PPP  but  may  pay 
contributions  to  an  individual  PPP  on  behalf,  or  for  the 
benefit, of the employee. Individuals can independently 
purchase  and 
the 
arrangements. Self-employed persons are often seen as 
potential PPP members. 
Payment of contributions to an individual account: PPPs 
are  financed  by  contributions  paid  to  an  individual 
account  by  product  holders  themselves  or  by  third 
parties on their behalf. 
PPPs  have  an  explicit  retirement  objective  -  set  out  in 
income  tax  law  or  other  national  legal  instruments 
(usually unrelated to labour law); 
The early withdrawal of accumulated capital is limited or 
penalised;  
Providers are private entities 
Restrictions may apply as to use of accumulated capital 
(i.e. type of benefits available for pay-out phase); 

Unlike other financial products, the specific aim of PPP is 
to provide an income to PPP holders after retirement 
PPP  provide  capital  accumulation  from  the  mid  to  long 
term  until  the (expected)  retirement  age  and  may  also 
cover biometric risks 
During 
the  accumulation  phase  premiums  and 
contributions  are  deferred  to  a  private  entity,  the  PPP 
provider 
During  the  accumulation  phase  the  possibility  for  early 
withdrawal  of  the  accumulated  capital  is  limited  and 
often sanctioned 
Upon  retirement  the  legislation  of  the  Member  State 
often  restricts  the  ways  in  which  the  accumulated  PPP 
capital  can  be  used  (e.g.  (lifelong)  annuitisation, 
programmed withdrawal, (partial) lump sums) 
PPP are funded 

Comparison with the EIOPA definition 
Included  in  the  EIOPA  definition,  with  more 
restrictive conditions. 
Included in the EIOPA definition. 

The  EIOPA  definition  also  includes  mandatory 
pension products. 
Included in the EIOPA definition. 
Included  in  the  EIOPA  definition  but  with  less 
restrictive  conditions,  i.e.  early  out-payments 
are  limited  or  penalised.  For  practical  reasons 
the definition for the purpose of the study does 
not exclude PPPs with non-limited withdrawals.  
Included in the EIOPA definition. 

Comparison  with  the  PPP  definition  for  the 
purpose of this study 
The  PPPs  in  the  scope  of  this  study  could  be 
offered by an employer.  

The  PPPs  in  the  scope  of  this  study  mainly 
meet  this  condition.  However  it  is  not  an 
applicable criterion. 

This condition is met. 

This condition is less restrictive, see above. 

Same as the definition used. 
This  condition  was  not 
in  the 
definition  used,  however  it  should  be  noted 
that it is mainly the case.  
Same as the definition used. 

indicated 

This  condition  was  not 
definition used.  

indicated 

in  the 

This  condition  was  not 
definition used. 

indicated 

in  the 

This  condition  was  not 
definition used.  

indicated 

in  the 

This  condition  was  not 
in  the 
definition used. It should be noted that various 
situations were observed.  

indicated 

This  condition  was  not 
definition used. 

indicated 

in  the 

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Methodological remarks 

Clarifications on tax and features questionnaire 

The following clarifications were provided during the course of our discussion with the 
EY Network regarding the following questions: 

-  Environment of the product (refer to section 0. Preliminary questions in the tax 

and features questionnaire) 

o 

Is  the  product  designed  to  target  a  limited  population?  (Refer  to 
question 0.I.1) The following coding options were allowed: All / Limited 
to defined categories excluded from public pension scheme / Others. For 
coding reasons: 

  Age  limits  were  not  taken  into  account  in  this  part  but  in  the 
specific  question:  What  are  the  age  limits  for  the  accumulation 
phase of the PPP? (Refer to question 1.VI.1.) 

  The  code  “Limited  categories  excluded  from  public  pension 
scheme”  was  selected  if  only  the  population  who  could  not 
benefit from a Pillar 1 Scheme is allowed to subscribe to the PPP. 

  The code “Other” was selected if the limitation that applied is not 
related  to  age  or  to  an  exclusion  from  the  Pillar  1  Scheme,  e.g. 
limited to handicapped persons.  

o  Main manufacturers and main distribution path (Refer to questions 0.II 
and  0.III):  If  the  information  was  available  we  indicated  the  main 
manufacturers / distributors. When such data was not available, all the 
possibilities were indicated. 

-  Taxation  requirements  applicable  to  personal  pension  products  (Refer  to 

section I) 

o  Give  the  legal  provisions  which  govern  the  personal  pension  product 

(Refer to question 1.I) 

This  section  deals  exclusively  with  the  tax  provisions  governing 
the taxation regime of the PPP. 

o  What  is  the  overall  local  tax  system  applicable  to  the  personal  pension 

products? (Refer to question 1.II) 

The overall tax regime is indicated based on the following rules: 

  EET  system:  A  form  of  taxation  of  pension  plans,  whereby 
contributions  are  Exempt  or  Partially  Exempt  from  personal 
income  taxation,  investment  income  and  capital  gains  of  the 
pension  fund  are  also  Exempt  or  Partially  Exempt,  and  benefits 
are Taxed. 

  ETE  system:  A  form  of  taxation  whereby  contributions  are 
Exempt  or  Partially  Exempt  from  personal  income  taxation, 
investment  income  and  capital  gains  of  the  pension  fund  are 
Taxed, and benefits are Exempt or Partially Exempt.  

All  further  combinations  (TEE,  TET,  EEE,  TTT,  etc.)  follow  the  same 
logic, mutatis mutandis. 

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Study on the feasibility of a European Personal Pension Framework 

o  What are the age limits for the accumulation phase of the PPP? (Refer to 
question  1.VI.1)  If  the  age  limit  indicated  by  EY  experts  was  the  legal 
minimum age to be able to subscribe  to such a contract (e.g. 18 years 
old), this limit has not been taken into account. Only maximum limits to 
subscribe  to  this  particular  contract  (e.g.  a  maximum  limit  of  58  years 
old) have been taken into account. 

o  What  is  the  form  of  the  tax  relief  on  in-payments?  (Refer  to  question 
1.VII.2) If the in-payments are exempt or partially exempt, the form of 
the tax incentive can be coded as “Tax reduction” or “Reduced tax base” 
or “Tax credit” or “Other” (e.g. financial incentives).  

o  Are  there  any  income  limitations?  (Refer  to  question  1.VII.5)  The 

answer is coded “Yes” in the following situations: 

  People with income over a certain amount do not qualify for a tax 

incentive 

  The  tax  incentive  is  limited  to  a  percentage  of  the  income  (e.g. 
tax deductibility is limited to 30% of the income / tax base). 

o 

o 

Is  the  maximum  limit  updated  over  time?  (Refer  to  question  1.VII.7) 
The  answer  to  the  question is  coded  “Yes”  if  this limit  can  be  updated, 
even if it was not updated in previous years.  

Is  the  family  situation  taken  into  account  when  determining  the 
maximum amount of in-payments per year? (Refer to question  1.VII.8) 
The answer is coded “Yes” if the tax incentive is modulated according to 
the family situation of the pension saver. 

o  What  is  the  tax  treatment  of  the  yield  on  the  accumulated  capital? 
(Refer  to  question  1.VIII.1)  The  answer  to  this  question  is  given 
from  a  pension  saver’s  perspective  and 
limited  to  the 
accumulation  phase  situation,  i.e.,  the  yield  could  be  not  taxed 
during the accumulation phase but taxed when out-payments are made. 
Such  a  situation  is  described  in  questions  1.IX.1  et  seq.  If  the  yield  is 
exempt, this issue is not usually governed by any legal provision.  

o  What  are  the  options  for  decumulation?  (Refer  to  question  1.IX.3)  The 

answers are coded as follows: 

  Lump sum: a one-time payment 

  Annuities:  pension  payments  in  annuity  form,  e.g.  life-time 

payments, payments during a fixed period, etc. 

  Combination of lump sum and annuities 

  Other: programmed withdrawals, etc. 

o  Describe  the  tax  implications  for  savers  for  each  of  the  decumulation 
options.  How  are  the  out-payments  taxed?  (Refer  to  question  1.IX.5) 
The  answers  are  coded  as  follows:  “Taxed”  if  all  the  decumulation 
options  are  taxed  (with  or  without  a  preferential  regime  or  partial  tax 
exemption), “Exempt” if all the decumulation options are totally exempt, 
and “Depends on the decumulation options” if at least one of the options 
is totally exempt and another is subject to taxation. 

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Study on the feasibility of a European Personal Pension Framework 

o 

Is it possible to redeem funds before pension age (early out-payments)? 
(Refer to question 1.IX.6) This answer is coded “No” if it is not possible 
to  redeem  funds  before  pension  age,  “Yes”  if  this  possibility  is  offered 
without limitation, and “Yes in limited situations” if this possibility is only 
offered in limited situations. 

o  What  are  the  tax  consequences  if  the  saver  chooses  to  redeem  funds 
before  pension  age  (early  out-payments)?  (Refer  to  question  1.IX.7) 
The answer is coded “Taxed” if the out-payment is taxed (even under a 
preferential regime) and “Exempt” if the out-payment is totally exempt. 

o  Switching  (Refer 

to  question  1.X.II).  The  answer 

is  coded 
“Impossible” only when there is no legal possibility of switching 
investments to another provider or if the EY network stated that 
in practice there is no possibility of switching. The answer is coded 
“No  tax  impact”  when  switching is  possible  (even  in limited  cases)  and 
does  not  trigger  tax  consequences  (however,  fees  may  apply).  The 
answer is coded “Immediate taxation” when switching is possible (even 
in limited cases) and triggers immediate taxation. 

Please note that: 

  Switching  questions  only  relate  to  the  transfer  of  the 
accumulated amounts from one provider to another within 
the same Member State or in another Member State; 

 

In many cases, questions have been answered without any legal 
basis. Thus, the answer ‘No tax impact’ could result from a legal 
vacuum and be mainly theoretical. 

-  Social,  labour  and  contract  law  requirements  applicable  to  PPPs  (Refer  to 

section 2) 

o  Does the legislation guarantee that the retirement age referred to in the 
contract  will  be  taken  as  the  reference,  should  the  retirement  age 
change under national law? (Refer to question 2.2) The answer is coded 
“Yes”  if,  in  the  event  of  modification  of  the  retirement  age  under 
national law, the retirement age taken as  the reference for the start  of 
the decumulation phase will be the age stated in the contract, “No” if, in 
such a case, the modification of the legal retirement age will impact the 
age at which the PPP decumulation phase starts, and “NA” if there is no 
retirement age under national law. 

Clarifications on selected questions and answers for clustering purposes 

Table  4:  Clarifications  on  selected  questions  and  answers  for  clustering 
purposes 

Topic 

Population 
targeted 
(0.I) 

Questions 

Methodological clarification 

Is the product designed to target a 
limited population? 
(0.I.1) 

Please refer to the clarification above. 

Main conditions for 
tax incentives 
1.III 

What  are  the  overall  conditions  for 
tax incentives applicable to? 

Age limit 
1.VI 

What  are  the  age  limits  for  the 
accumulation phase of the PPP? 
(1.VI.1)  

The  answer  to  this  question  is  found  in  the 
answers  to  the  other  questions  selected, 
unless  there  are  conditions  mentioned  here 
that  are  not  covered  by  the  other  selected 
questions.  
Please refer to the clarification above. 

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Study on the feasibility of a European Personal Pension Framework 

for 

there  any  other 

Is  a  minimum  number  of  years  to 
retirement  a  condition 
the 
purchase of the product? 
(1.VI.3)   
Are 
features 
/conditions/restrictions  required  to 
obtain 
in-
relief 
payments? 
(Provide  a  detailed 
description) 
(1.VII.3) 

the 

tax 

for 

If  the  answer  to  question  (1.VII.3) 
is  yes,  is  it  necessary  for  there  to 
be  an  insurance  element  in  the 
product? 
(1.VII.4) 
Is it possible to change the level of 
in-payments? 
(1.VII.11.a) 
Is it possible to take a break? 
(1.VII.11.b) 

If  you  answered 
to 
question  (1.VIII.1):  What  are  the 
conditions to qualify for exemption? 
(1.VIII.3) 

‘exempt’ 

Yields taxes 
1.VIII 

Decumulation 
phase 
1.IX 

Is there an age limit for the start of 
the  decumulation  phase?  (If  so 
state the age limit). 
(1.IX.1) 

Are  individuals  able  to  choose  the 
age  at  which  decumulation  starts, 
or  is  it  prescribed  by  tax  or  labour 
law? 
(1.IX.2) 
What 
decumulation?  
(Possible  options  for  decumulation 
include:  lump  sums,  partial  lump 
sums,  annuities,  annuities  during  a 
fixed period.) (1.IX.3) 

options 

are 

the 

for 

NA 

The  answers  to  this  question  have  been 
coded  for  clustering  purposes.  We  identified 
five  main  categories  of  features/  conditions/ 
restrictions required to obtain tax relief :  

 

formal conditions (e.g. official 
document from the pension fund, 
contract certified)  

  minimum holding period (e.g. 

account held for at least 10 years),  

  minimum amount of in-payments 
(minimum contribution threshold 
must be exceeded), 
conditions for out-payments (e.g. 
savings must be used for periodic 
payments by an insurer or bank). 

 

Please note that this question relates to ‘any 
other  features/  conditions/  restrictions’:  we 
any 
have 
characteristics  mentioned  in  another  answer 
to a question in the questionnaire.  
NA 

account 

taken 

into 

not 

NA 

NA 

type  of  condition 

For  clustering  purposes,  we  identified  only 
for 
one 
exemption: to have only one contract (of the 
same type). 

to  qualify 

The age limit  taken into consideration is that 
applicable in 2015.  
If  the  answer  refers  to  the  legal  retirement 
age and this legal retirement age depends on 
the  gender  of  the 
individual,  we  have 
considered the age applicable to males.  
If  the  answer  refers  to  the  legal  retirement 
age and this legal retirement age depends on 
the  date  of  birth  of  the  individual,  we  have 
considered the lowest limit. 
NA 

Both  questions 
considered 
together. If products do not include the same 
options, they cannot be in the same cluster. 

should  be 

June 2017 21 

 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

What  conditions  are  attached  to 
those options?  
(For each option, state whether it is 
mandatory  or  a  default  option  and 
describe it.) (1.IX.4) 
Is  it  possible  to  redeem  funds 
before  pension  age  (early  out-
payments) 
(1.IX.6) 
Are  there  any  social,  labour  and 
contract 
requirements 
applicable  to  PPPs?  (If  so,  describe 
them.)(2.1) 

law 

labour 
law 

2.  Social, 
and  contract 
requirements 
applicable to PPPs 

3.Other 
requirements 
applicable to PPPs 

legal 

4.Requirements 
applicable to the 
providers of PPPs 

Is  being  a  national  of  the  relevant 
Member  State  or  having  a  physical 
address  in  the  Member  State  a 
requirement  to  buy  the  product? 
(2.4) 
Does  the  personal  pension  product 
cover disability allowance?  
(Comment  to  what  extent  and  if  it 
is mandatory) (2.5) 
Are  there  any  other  conditions  to 
benefit 
tax 
treatment,  not  yet  mentioned 
above?  (If  so,  describe  them). 
(3.1) 

preferential 

from 

What  are  the  specific  contract  and 
insurance 
requirements 
applicable to PPPs?(3.2) 

law 

Where are they registered and who 
supervisory 
is 
the 
authority 
their 
oversight? (4.2) 

national 
in 

charge  of 

Are  providers  from  other  Member 
States/EEA allowed to sell the PPP? 
(4.3)  
If  you  answered  yes  to  question 
4.3 :  
What  are  the  requirements  for 
foreign  providers 
from  Member 
States/EEA to sell the PPP? (4.4) 

NA 

The  answers  to  this  question  have  been 
coded  for  clustering  purposes.  We  have 
identified  three  main  categories  of  social, 
labour and contract law requirements: 

 

 

 

Formal requirements (e.g. business 
name of the fund) 
Period of employment (employed for 
at least 3 months), 
No earlier participation. 

NA 

The answer has been taken into account only 
if  the  personal  pension  product  covers 
disability allowances mandatorily.  

The  answers  to  this  question  have  been 
coded  for  clustering  purposes.  We  have 
identified  two  main  categories  of  other 
conditions  to  benefit  from  preferential  tax 
treatment: 

  Minimum holding period (e.g. 
minimum holding period of 10 
years), 
Capital guarantee. 

 

The  answers  to  this  question  have  been 
coded  for  clustering  purposes.  We  have 
identified  only  one  main  category  of  specific 
contract  and  insurance  law  requirements 
applicable to PPPs: 

 

Social security contribution paid. 

Please  note  that  only  specific  contract  and 
insurance  law  requirements  have  been  taken 
into account when analysing the answers. 
This  question  was  selected by  the  DG FISMA 
in order to determine whether some products 
were  covered  by 
the  same  European 
supervisory  regime.  However,  given  the 
questionnaire’s  wording  and  the  answers 
obtained,  it  is  not  possible  to  use  these 
answers  to  that  end.  Thus,  the  answers  to 
this  question  were  not  considered 
for 
clustering purposes.  
If  the  answer  is  no,  the  PPP  will  not  be 
included in a cluster. 

The answers to this question have been taken 
into  account  if  additional  requirements  apply 
to foreign providers. 
In  that  case,  answers  have  been  coded  and 
we  have  identified  two  main  categories  of 
additional  requirements  applicable  to  foreign 

June 2017 22 

 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

providers: 
 
 

To have a permanent establishment, 
Specific information to be disclosed 
to the foreign supervisory authority. 

Information sources and interpretation of the results 

The  analysis  is  based  upon  the  information  received,  and  the  limitations  of  the  data 
obtained must be borne in mind when interpreting the study findings. Had more data 
been  available  to  us,  further  analysis  would  have  been  performed  and  reported.  No 
attempts were made to verify information apart from cross-checking when relevant.  

The  study  only  compiles  and  analyses 
recommendations.  

information  without  making  any 

As  indicated  in  the  section  entitled  “Personal  pension  products  in  the  scope  of  the 
study”,  DG  FISMA  provided  a  very  specific  definition  of  the  PPP  to  be  studied.  The 
study  findings  apply  to  this  definition  of  a  PPP.  It  was  noted  that  PPP  terminology 
differs between databases. The comparability of the study findings may be affected as 
a result. 

Even  though  the  study  is  intended  to  identify  the  products  with  the  highest  market 
penetration,  there  are  no  official  statistics  for  certain  PPPs,  which  means  that  they 
cannot  be  analysed.  While  the  data  gathered  provides  a  balanced  view  of  EU  PPP 
markets,  it  cannot  be  ruled  out  that  some  successful  PPPs  may  not  have  been 
identified. 

The analysis of the features was mostly qualitative. Therefore the link between a PPP 
feature and its success should be considered with caution. 

The study attempts to estimate the market potential of a PEPP taking various success 
scenarios  into  consideration.  This  estimation  exercise  is  a  theoretical  one  and  should 
be viewed as indicative only, as is the case for all prospective analysis.  

Finally, when estimating the market potential of a PEPP, the study relies on observed 
trends  and  average  behaviour.  Therefore  the  study  findings  are  more  robust  at  EU 
level than at Member State level.   

Information sources  

This  study  resulted  in  the  compilation  of  a  unique  database  on  PPPs.  On  the 
basis  of  existing  databases  on  personal  pension  plans  (EIOPA,  OECD),  data  collected 
from  the  financial  authorities  of  the  Member  States  interviewed  (see  Error! 
Reference  source  not  found.),  and  desk  research  using  national  office  statistics, 
insurance/investment  association  websites  and  reports,  a  data  set  related  to  the 
following  PPP  market  information  was  collected  for  the  period  from  2010  to  2014, 
where possible. 

The sources of information below were used to gather data on PPP products:  

-  Our network of tax and pension experts; while we relied on the EY network to 
gather data on the tax regime for each PPP, local pension experts also gathered 
information on PPP features; 

June 2017 23 

 
 
 
 
 
 
 
 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

-  Databases  on  PPPs,  as  described  below,  were  collated  from  the  EIOPA  PPP 
database,  the  OECD  database,  the  Eurostat  database  and  other  databases  in 
order to gather as much data as possible; 

-  Desk research was performed, and reports, websites and commercial brochures 

were also consulted to complete the information on PPPs; 

-  Financial  authorities  were  also  consulted  to  identify  data  sources  and  obtain 
feedback  on  the  state  of  the  pension  market  (see  Error!  Reference  source 
not found.). 

The information collected concerns 36 PPPs covering 24 Member States. Table 5: Data 
quality  assessment  below  presents  the  information  collected  per  Member  State  in 
more detail. Comments on data quality are provided in the last column of the table. 

June 2017 24 

 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Table 5: Data quality assessment  
NB. AuM means “Assets under Management” – HHI means “Herfindahl-Hirschman Index” 

Member 
state 

PPP coded name 

Austria 

Austria_PZV 

Belgium 

Belgium_PP 

Bulgaria 

Belgium_LP 
Bulgaria_PVPF  
Bulgaria_UVPF 

Croatia 

Croatia_OPF  

Cyprus 

Cyprus_IIP 

Czech 
republic 

Czech Republic_SSP 

Denmark_Alder 

Denmark 

Denmark_RP 
& Denmark_Aldersop 

Estonia 

Estonia_VSF 

Finland 

Finland_IP 

France_PERP 

France 

France_Madelin TNS 

Germany 

France_Madelin Agr 
Germany_PP 
Germany_Riester 

Germany_Rürup 

Greece 

Greece_PRSP 

Hungary 

Hungary_PRS 

Ireland 

Italy 

Ireland_RAC 

Ireland_PRSA 

Italy_OPF 

Italy_PIP 

Latvia 

Latvia_PPF 

Lithuania 

Lithuania_VF 

l

s
r
e
d
o
H
f
o
r
e
b
m
u
N

M
u
A

s
t
n
e
m
y
a
p
-
n
I

s
t
n
e
m
y
a
p
-
t
u
O

*
I
H
H

e
r
a
h
s

r
e
d
i
v
o
r
P

Comments 

Data collected for 2010-2014 – received 
information relating to product in-
payments from financial authorities on 7 
Dec. - will be integrated into the 
database in the next stage 
For both products, data related to AuM, 
market share of provider, in-payments 
were collected for 2010-2014  
Data on number of  
holders were collected for 2010-2013 
Data collected related to 2010-2015 
No data available 
There are two types of Open voluntary 
pension funds: Opened and Closed. No 
data available for the Closed type. 
According to Financial Authority 
interviews, there are no data matching 
the definition of a PPP given in the 
tender 
Data related to providers’ market share 
and AuM was collected for 2010-2015 
Data on number of holders were 
collected for 2013 to 2015 
Data on out-payments were collected 
for 2010-2014 

No data available for this PPP 

Data on AuM collected for 2014 
Number of holders and in-payments 
collected for 2010-2014 
Data on AuM collected for 2014 
Number of holders and in-payments 
collected for 2013-2014 and 2013 - 
2015 respectively 
Data on AuM and number of holders 
were collected for 2012-2015 
Data on in-payments and out-payments 
were approximated using historical data 
Data were collected for the period 2010-
2014 

Data were collected for 2010 to 2014 
except for HHI and providers’ market 
share where information is only 
available for 2014 for PERP 

No data available 
Data collected related to 2010-2015 
Only information on number of holders 
is available 
No data available 
Issue concerning isolation of the share 
of this product relative to the country’s 
overall market (available in OECD 
database)  

No data available 

Data collected related to 2010-2015 
Data on AuM and in-payments were 
obtained for 2010 to 2015 
Data on number of holders related to 
2012-2015 
Data collected related to 2010-2015 
Data on AuM, HHI and number of 
holders related to 2010-2015 

June 2017 25 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
 
 
  
  
  
  
 
 
  
 
 
  
  
  
  
 
 
 
 
 
 
 
 
  
  
  
  
 
 
  
  
  
  
 
 
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
 
 
  
  
  
  
 
 
  
  
  
  
 
 
  
 
 
  
  
  
  
  
 
 
  
  
  
  
 
 
  
  
  
  
 
 
  
  
  
  
 
 
  
  
  
  
 
 
 
  
  
  
  
 
 
  
  
  
  
 
 
 
  
 
  
  
 
 
  
  
  
  
 
 
  
  
  
  
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

l

s
r
e
d
o
H
f
o
r
e
b
m
u
N

M
u
A

s
t
n
e
m
y
a
p
-
n
I

s
t
n
e
m
y
a
p
-
t
u
O

*
I
H
H

e
r
a
h
s

r
e
d
i
v
o
r
P

Comments 

Data on number of holders were 
collected for 2010-2013 
No data available 
No data available for this PPP since it 
was set up in 2015 
Data on AuM, out-payments and in-
payments were collected for 2011-2015 
Data on number of holders were 
collected for 2013-2015 
Data collected related to 2010-2012 
No data available 
No data available 
Data were collected for 2010-2015 

Data on AuM were collected for 2010 to 
2015 
Data on number of holders were 
collected for 2012 to 2015 
No data available 

No data available 

Data collected related to 2010 to 2015 
Data collected on AuM related to 2010 
to 2015 
Data on number of holders were 
collected for 2010 to 2013 
Data on AuM and providers’ share were 
collected for 2012 to 2015 
Data on number of holders were 
collected for 2010 to 2015 

All data collected related to 2010 to 
2015 

Data on AuM was collected for 2010 to 
2014 and corresponds to overall 
Swedish personal pension market  
Data collected related to 2012-2015 
No data available 

Member 
state 

PPP coded name 

Luxembourg  Luxembourg_IPS 

Malta 

Malta_PPPa 

Malta_PPPna 

Netherlands 

Poland 

Netherlands_RBSA 
Netherlands_RAInsA 
Natherlands_RAInsD 
Poland_PPE 
Poland_IKE 
Poland_IKZE 

Portugal 

Romania 

Portugal_PPR 

Portugal_LifeInsH 
Portugal_LifeInsHR 
Portugal _PF 
Romania_SSP 

Slovakia 

Slovak Republic_PPF 

Slovenia 

Slovenia_VSP 

Spain 

Spain_MP 
Spain_PPA 
Spain_IPP 

Sweden 

Sweden_IPS 

United 
Kingdom 

United Kingdom_Stakeh 
United kingdom_SIPP 

Color 

Data quality 

High 

Medium 

None 

As  mentioned  in  the  section  “Personal  pension  products  in  the  scope  of  the  study”, 
the data collected in this study has more depth and breadth than that of the 
EIOPA  database.  A  set  of  29  products  are  common  to  this  study  and  the  EIOPA 
database.  In  addition,  information  was  collected  on  a  further  eight  PPPs,  completing 
the existing information on 18 of the EIOPA PPPs.  

The  information  available  on  Assets  under  Management  (hereafter  “AuM”) 
represents  a  large  proportion  of  total  AuM  across  the  EU  PPP  market.  The 
information  collected  covers  34  PPPs  distributed  across  24  Member  States  and 
amounts to EUR 0.6 trillion in 2014. Except for the UK market which includes about 5 
million  holders,  the  proportion  of  AuM  relating  to  PPPs  for  which information  was  not 
identified should be relatively small. 

June 2017 26 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
 
 
 
 
 
 
 
 
  
  
  
  
 
 
  
  
  
  
 
 
  
  
  
  
 
 
  
  
  
  
 
 
 
  
 
  
  
  
  
  
 
 
  
  
  
  
 
 
  
 
  
 
  
 
  
 
 
 
 
 
  
  
  
  
 
 
  
  
  
  
 
 
 
 
 
 
 
 
  
  
  
  
 
 
 
 
 
 
  
  
  
  
 
 
  
  
  
  
 
 
  
  
  
  
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

For variables other than AuM, PPP holders and in-payments, little information 
was available. For instance, information on out-payments was not always available, 
as  many  PPPs  are  recent  and  out-payments  are  scarce  for  these  products.  Likewise, 
there  are  no  official  statistics  on  the  Herfindahl-Hirschman  Index  (hereafter  “HHI”), 
since not all financial authorities compile this information.  

The  market  information  collated  can  be  seen  as  representative  of  the  EU. 
According  to  Figure  2,  except  for  southern  Europe  where  no  data  was  collected, 
market  data  was  collected  on  most  markets  where  a  PPP  is  present.  The  information 
collected is representative of both large and small EU Member States. It captures the 
diversity of the EU markets and economics very well.  

June 2017 27 

 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Figure 2: Number of PPPs per Member State      
Left panel, number of PPPs per Member State; Right panel, PPPs included in our database 

There  is  a  relatively  low  risk  of  missing  the  PPPs  with  the  highest  market 
penetration,  using  the  data  collected.  For  the  UK,  Netherlands  and  Germany  the 
information collected is incomplete. As these Member States represent major markets, 
it is possible that they may offer successful PPPs for which no information is available.  

 

 

In  Germany,  the  information  was  collected  from  the  Riester-Rente  plan  only 
and does not include the value of the Rürup-Rente assets. However, according 
to OECD Private Pensions Outlook 2008, the Rürup-Rente plan has not been as 
popular as the Riester-Rente plan. 

In the Netherlands, the relatively small size of the Dutch third pillar pension is 
also discussed in Working Paper Number WP2023. Therefore, it can be expected 
that  any  missing  information  about  all  the  PPPs  available  in  the  Netherlands 
should have a low impact on the identification of the products with the highest 
market penetration. 

  For  countries  such  as  Cyprus,  Greece  and  Luxembourg  where  data  was  not 
available,  PPP  asset  sizes  were  expected  to  be  small,  considering  their 
respective pension systems. 

Interpretation of logarithmic scales 

A  logarithmic  scale  was  used  to  analyse  PPPs.  This  scale  makes  it  possible  to  level 
discrepancies between Member States that arise because of their size differences.  

While most of the relationships presented in this study appear linear, they should not 
be interpreted as such. What appears to be a positive, linear relationship between two 

3
See https://dev.ageing.ox.ac.uk/files/workingpaper_202.pdf 

June 2017 28 

 
 
 
 
 
  
 
 
                                           
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

variables in a logarithmic scale does not reveal a proportional relationship but rather a 
power relationship.  

Figure 3 – Comparison of three curves plotted with different scales 
Left: logarithmic scale, Right: linear scale 

Blue curve: log(𝑦) = 1.5 × log⁡(𝑥) 
Red curve: log(𝑦) = 1.0 × log⁡(𝑥) 
Grey curve: log(𝑦) = 0.5 × log⁡(𝑥) 

While  a  logarithmic  scale  allows  for  better  spacing  between  points  (small  differences 
are stretched, bigger differences are shrunk) and therefore makes for a better viewing 
perspective, it is important to differentiate the two scales when a trend line is added.  
The  points  situated  above  (respectively  under)  the  curve  in  logarithmic  scale  remain 
above (respectively under) the curve in linear scale.  

Interpretation of results 

Qualification with regard to PPP features: Features that convey a certain idea of 
success are to be interpreted with caution. They are based  on the comparison of the 
five  products  with  the  highest  Market  Penetration  Index  (hereafter  ‘MPI’),  and  they 
may be difficult to extrapolate to other PPPs. Furthermore, often PPP features hinge on 
the providers. In such cases, we considered that the features were available.  

Estimation  results  should  be  viewed  as  indicative:  The  study  estimates  the 
market potential of a PEPP in various success scenarios. This estimation exercise is a 
theoretical  one  and  should  only  be  viewed  as  indicative,  as  is  the  case  for  all 
prospective  analyses.  While  a  number  of  events  which  could  potentially  affect  the 
success  of  a  PPP  have  been  considered,  events  that  were  unforeseen  at  the  time  of 
this study could alter the estimation.   

The  estimation  findings  are  more  robust  at  EU  level:  When  estimating  the 
market  potential  of  a  PEPP,  we  relied  on  observed  trends  and  average  behaviour. 
Therefore the study findings are more robust at EU level than at Member State level.    

June 2017 29 

 
 
 
 
 
 
 
 
 
  
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Purpose of the study 
The present study contains: 

  A tax mapping, presentation and analysis of the taxation regimes,  and 

clustering according to the product’s key features (1 and 4) 

  A  PPP  market  overview  (2)  including  a  presentation  of  the  products 

with the highest market penetration and their key features (3)  

  A technical feasibility assessment (6), including an analysis of the practical 
implementation aspects and an assessment of the market potential for a PEPP 
in the EU 

June 2017 30 

 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Tax mapping, presentation and analysis of the taxation 
regimes,  clustering  according  to  the  products’  key 
features (1) 

Tax  mapping:  tax  categorization  trees  and  Tax  ID  Card  for  each 
personal pension product 

Tax categorization trees 

The description of PPP is mainly based on the following classification trees: 

-  Tax treatment of in-payments; 
-  Tax treatment of yield during the accumulation phase; 
-  Options and tax treatment of the decumulation phase at the time of 

retirement; 

-  The possibility of early out-payments and their tax treatment; 
-  Domestic and cross-border switching. 

Tax treatment of in-payments 

Figure 4: Categorisation of PPPs in light of the tax regime for in-payment  

The tree (Figure 4) is divided into three sub-categories: 

-  Taxed, corresponding to the absence of tax incentive applicable on the in-

payments; 
Partially exempt; 
Partially exempt/taxed depending on the level of the pension saver’s income. 

- 
- 

June 2017 31 

Accumulation tax regimeTaxedReduced tax basePartiallyexemptTax reductionTax creditReduced tax basePartially exempt/taxedOtherNetherlands_RAInsDNetherlands_RBSANetherlands_RAInsA3Income limitationDenmark_Aldersop Germany_PP       Greece_PRSP      Malta_PPPna      Poland_IKE       Poland_PPE       Sweden_IPS 7United Kingdom_SIPP   United Kingdom_Stakeh2Income limitation and maximum amountMaximum amount4Belgium_PP Belgium_LPGermany_RiesterHungary_PRSAustria_PZVCroatia_OPF (max amount)212Ireland_PRSA Ireland_RAC Portugal_PF Portugal_PPRSpain_IPP  Spain_MP           Spain_PPAFrance_MadelinTNS   France_MadelinAgrCyprus_IIP Estonia_VSFFrance_PERPIncome limitation and maximum amount1Denmark_AlderNo limitation4Bulgaria_UVPF      Bulgaria_PVPFLatvia_PPF Lithuania_VFIncome limitationMaximum amountCzech Republic_SSPDenmark_RP  Finland_IPGermany_RürupItaly_PIP           Italy_OPF Luxembourg_IPSPoland_IKZEPortugal_LifeInsR Romania_SPPSlovak Republic_PPFSlovenia_VSP 12Malta_PPPaPortugal_LifeInsH2Maximum amount 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Figure  5:  Categorisation  of  PPP  on  the  basis  of  the  tax  regime  of  the  in-
payment phase 

Seven  products  are  classified  in  the  ‘Taxed’  category  and  represent  six  Member 
States. Basically, contributions made into these seven types of products will trigger no 
tax  incentive,  either  for  the  pension  saver  (or  the  employer  if  applicable). 
Contributions are made on net income. 

Thirty  nine  products  are  classified  as  ‘Partially  exempt’  and  represent  twenty  four 
Member States. 

Tax  incentives  may  take  the  form  of  a  tax  reduction,  reduced  tax  base,  tax  credit  or 
other (e.g. financial incentives). Please refer to figure 6 for a breakdown of partially-
exempt PPPs based on a review of tax incentive type. 

The  main  form  of  tax  incentive  available  is  a  tax  base  reduction  (29  PPPs  in  19 
Member  States).  This  tax  incentive  corresponds  to  a  reduction  of  the  taxable 
base subject to personal income tax. Thus, it may only apply to a pension saver with 
a  taxable  income  calculated  in  accordance  with  the  rules  of  the  relevant  Member 
State. 
This reduction is generally limited in different ways: 

-  Deduction of a limited amount of in-payments; 
-  Deduction limited to a percentage of income; 
-  Deduction of a limited amount of in-payments, limited to a percentage of 

income; 

-  No limitation on either the amount of in-payments or on income. 

June 2017 32 

 
 
 
 
 
 
 
 
 
 
Figure 6: Proportion of each tax incentive limitation in the ‘Partially exempt’ 
category 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Furthermore, local tax regulations may provide for additional general limitations (e.g., 
overall amount of tax deductions). Such a situation would have been described in the 
questionnaire. 

The second form of tax incentive available is a tax reduction (6 PPPs in four Member 
States),  i.e.,  a  decrease  of  the  amount  of  income  tax  due.  This  type  of  tax 
incentive  only  applies  after  all  potential  reductions  of  the  taxable  base.  Thus,  it  may 
only  apply  to  a  pension  saver  with  a  taxable  income  subject  to  income  tax  after 
offsetting of each tax reduction incentive.  

The  third  form  of  tax  incentive  available  is  a  tax  credit  (2  PPPs  in  two  Member 
States), i.e., a tax amount deductible from the personal income tax due. Such 
tax credits can be carried forward. Thus, individuals who are not subject to income tax 
during a given year may benefit from this tax incentive in subsequent fiscal years.  

The regime governing some products does not allow the pension saver’s in-payments 
to  benefit  from  tax  incentives  but  other  types  of  incentives  may  apply:  financial 
contributions paid either by the State  or the  employer.  In  such a  case the product is 
categorized  as  being  partially  exempt  if  the  incentive  benefits  from  a  tax  exemption 
regime. In such situations, the incentive will be classified in ‘Other’.  

The  table  below  shows  all  the  products  which  benefit  from  State  subsidies  and  allow 
for employer subsidies. 

June 2017 33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Table 6: State and employer subsidies 

If  a  product  benefits  from  a  specific  tax  exemption  and  a  financial  incentive,  it  is 
classified in the category ‘Partially exempt’ with tax reduction, reduced tax base or tax 
credit incentive, and not in the ‘Other’ category. 

Three products from the same Member State are classified as ‘Partially exempt/taxed’. 
These  products  benefit  from  a  tax  reduction  if  pension  savers’  income  is  below  a 
specific ceiling. Otherwise, no incentive applies to in-payments. Thus, high incomes do 
not benefit from the tax incentive. 

June 2017 34 

CountryCoded nameState subsidyEmployer subsidyCountryCoded nameState subsidyEmployer subsidyAustriaAustria_PZVyesnoLatviaLatvia_PPFnoyesBelgium_LPnonoLithuaniaLithuania_VFnoyesBelgium_PPnonoLuxembourgLuxembourg_IPSnonoBulgaria_UVPFnoyesMalta_PPPanonoBulgaria_PVPFnoyesMalta_PPPnanonoCroatiaCroatia_OPFyesyesNetherlands_RBSAnonoCyprusCyprus_IIPnoyesNetherlands_RAInsAnonoCzech RepublicCzech Republic_SSPyesyesNetherlands_RAInsDnonoDenmark_AldernoyesPoland_IKEnonoDenmark_RPnoyesPoland_PPEnoyesDenmark_AldersopnoyesPoland_IKZEnonoEstoniaEstonia_VSFnoyesPortugal_LifeInsRnoyesFinlandFinland_IPnoyesPortugal_LifeInsHnoyesFrance_PERPnonoPortugal_PFnoyesFrance_MadelinTNSno noPortugal_PPRnoyesFrance_MadelinAgrnonoRomaniaRomania_SPPnoyesGermany_RiesteryesnoSlovakiaSlovak Republic_PPFnoyesGermany_RürupnoyesSloveniaSlovenia_VSPnoyesGermany_PPnoyesSpain_IPPnoyesGreeceGreece_PRSPnoyesSpain_MPnoyesHungaryHungary_PRSnoyesSpain_PPAnoyesIreland_RACnonoSwedenSweden-IPSnonoIreland_PRSAnonoUnited Kingdom_SIPPnoyesItaly_PIPnoyesUnited Kingdom_StakehnoyesItaly_OPFnoyesMaltaNetherlandsPolandPortugalSpainUnited KingdomFranceGermanyIrelandItalyDenmarkBelgiumBulgaria 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

The  products  classified  in  ‘tax  reduction’,  ‘reduced  tax  base’  or  ‘tax  credit’,  are 
classified into sub-categories: 

-  There is a maximum amount of in-payments that qualifies for tax incentive; 
-  The tax incentive is limited to: 

  People with an income below a certain amount ; 

  A  percentage  of  income  (e.g.  the  tax  deductibility  is  limited  to 

30% of income / tax base). 

-  There is a maximum amount of in-payments that qualify for the tax incentive 

and an income limitation as described above; 

-  There is no limitation. 

Tax treatment of the yield during the accumulation phase 

Figure 7: Categorisation of PPPs with regard to the taxation applicable to the 
yield  

The tree is divided into two sub-categories: 

-  Taxed 
-  Exempt 

Twelve  products  in  six  Member  States  are  classified  in  the  ‘Taxed’  category. 
Thirty-seven  products  in  twenty  three  Member  States  are  classified  in  the  ‘exempt’ 
category. 

This sub-section is divided into two exemption categories:  

-  Exemption with no conditions (thirty-five products in twenty-three Member 

States); 

-  Exemption with conditions (two products from the same Member State). 

June 2017 35 

Yield tax regimeTaxedNo conditions to qualify for exemtptionConditions to qualify for exemptionExemptDenmark_AlderDenmark_RPDenmark_AldersopGermany_RiesterGreece_PRSPItaly_PIPItaly_OPFPortugal_LifeInsRPortugal_LifeInsHPortugal_PFPortugal_PPRSweden_IPS12France_MadelinTNSFrance_MadelinAgrAustria_PZVBelgium_LPBelgium_PPBulgaria_UVPFBulgaria_PVPFCroatia_OPFCyprus_IIPCzechRepublic_SSPEstonia_VSFFinland_IPFrance_PERPGermany_RürupGermany_PPIreland_RACIreland_PRSALatvia_PPFLithuania_VFLuxembourg_IPSMalta_PPPaMalta_PPPnaNetherlands_RBSANetherlands_RAInsANetherlands_RAInsDSlovakRepublic_PPFSpain_IPPSpain_MPSpain_PPAHungary_PRSSlovenia_VSPRomania_SPPPoland_PPEUnited Kingdom_SIPPUnited Kingdom_Stakeh3512Poland_IKE                      Poland_IKZE2 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Options  and  tax  treatment  of  the  decumulation  phase  at  the  time  of 
retirement 

Figure 8: Percentage of decumulation option possibilities 

1% 

22% 

33% 

Lump sum

Annuities

44% 

Combination of lump sum
and annuities

Other

The  most  widely-offered  decumulation  option  is  annuities.  The  option  for  pay-out  by 
lump sum is also well represented.  

Figure  9:  Categorisation  of  PPPs  with  regard  to  the  tax  regime  during  the 
decumulation phase 

June 2017 36 

Decumulation tax regimeMandatoryunique option for outpayments(annuities)TaxedTaxed or exemptNo mandatory unique option for outpaymentsWith default optionWithout default optionTaxedExemptDepends on decumulation optionTaxedFrance_MadelinTNSFrance_MadelinAgrDenmark_RPFinland_IPGermany_RürupSweden_IPS6Netherlands_RAInsANetherlands_RAInsDNetherlands_RBSA3Belgium_PP    Croatia_OPF   Denmark_Alder France_PERP   Malta_PPPa    Malta_PPPna 6Belgium_LPGermany_RiesterGermany_PPIreland_RACIreland_PRSAItaly_PIPItaly_OPFLatvia_PPFLuxembourg_IPSPoland_IKZEPortugal_LifeInsRPortugal_PPRRomania_SPPSlovenia_VSPSpain_IPPSpain_MPSpain_PPAUnited Kingdom_SIPPUnited Kingdom_Stakeh19Austria_PZV Cyprus_IIP2Bulgaria_UVPF      Bulgaria_PVPF      Czech Republic_SSP Denmark_Aldersop   Estonia_VSF        Greece_PRSP        Hungary_PRS        Lithuania_VF       Poland_IKE         Poland_PPE         Slovak Republic_PPFPortugal_LifeInsH   Portugal_PF13 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

The tree is divided into two sub-categories: 

-  Mandatory option, if there is only one applicable decumulation option; 
-  No mandatory option, if there are at least two possible decumulation options to 

choose from. This sub-category is divided into: 

o  Default option, if there is an option which applies automatically when 

the pension saver does not choose another option; 

o  No default option, if the pension saver has to choose out-payments.  

Nine products in six Member States are classified in the ‘Mandatory  option’ category. 
In  this  category  six  products  are  ‘Taxed’  i.e.,  the  mandatory  decumulation  option  is 
subject to taxation in any event. 

Three  products  from  the  same  Member  State  are  classified  ‘Taxed  or  exempt’.  These 
products  benefit  from  an  exemption  if  a  pension  saver’s  income  is  above  a  specific 
ceiling.  Otherwise,  no  incentive  applies  to  out-payments.  Thus,  high  incomes  benefit 
from the tax incentive. 

Forty products in twenty-six Member States are classified in the ‘No mandatory option’ 
category. 

In  this  category,  six  products  in  five  Member  States  are  in  the  ‘Default  option’  sub-
category. For all these products, out-payments are taxed in any event.  
The  other  thirty-four  products,  in  twenty-three  Member  States,  are  classified  in  the 
‘No default option’ sub-category.  

The  applicable  regime  for  nineteen  of  these  products  provides  for  out-payment 
taxation at the time of decumulation.  

Two of these products are included in the ‘Depends on decumulation option’ category, 
i.e.,  at  least  one  of  the  options  is  totally  exempt  and  another  one  is  taxed.  The 
applicable  regime  for  thirteen  of  these  products  allows  the  pension  saver  to  benefit 
from a tax exemption applying to out-payments once decumulation begins.  

June 2017 37 

 
 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Early out-payments: option and tax treatment 

Figure  10:  Categorisation  of  PPPs  with  regard  to  the  option  to  benefit  from 
early out-payment, and corresponding tax regimes  

This tree is divided into three sub-categories: 

-  Out-payments are allowed; 
-  Out-payments are allowed in limited situations; 
-  Out-payments are not allowed. 

Twenty-eight products in seventeen Member States are classified in the sub-category 
‘Out-payments  are  allowed’.  Two  of  the  regimes  applicable  to  these  products 
applicable allow the pension saver to benefit from an exemption in the event of early 
out-payments.  Pension  savers  who  use  the  twenty-six  other  products  are  subject  to 
taxation in the event of early out-payments.  
Thirteen  products  in  eight  Member  States  are  classified  in  the  sub-category  ‘Out-
payments  are  allowed  in  limited  situations’.  Three  of  the  regimes  applicable  to  these 
products  allow  the  pension  saver  to  benefit  from  a  tax  exemption  applying  to  early 
out-payments. Pension savers using the ten others are subject to taxation in the event 
of early out-payments.  

Eight products in six Member States are classified in the sub-category ‘Out-payments 
are not allowed’.  

We  have  verified  whether  early  out-payments  would  be  detrimental  from  a  tax 
standpoint. Please refer to the figure below.  

June 2017 38 

Early outpaymentsYes in limited situationsNoYesTaxedExemptTaxedExemptCroatia_OPF        Germany_Rürup      Malta_PPPa         Netherlands_RBSA   Netherlands_RAInsA Netherlands_RAInsD Portugal_PF        Sweden_IPS 8 France_MadelinTNS   France_MadelinAgr   France_PERP 3 Bulgaria_UVPFBulgaria_PVPFFinland_IPIreland_RACIreland_PRSAItaly_PIPItaly_OPFLatvia_PPFRomania_SPPSlovenia_VSP10 Slovak Republic_PPFPortugal_LifeInsH2 26 Austria_PZVBelgium_LPBelgium_PPCyprus_IIPDenmark_AlderDenmark_RPDenmark_AldersopEstonia_VSFGermany_RiesterGermany_PPGreece_PRSPHungary_PRSLithuania_VFLuxembourg_IPSMalta_PPPnaPoland_IKEPoland_PPEPoland_IKZEPortugal_LifeInsRPortugal_PPRSpain_IPPSpain_MPSpain_PPAUnited Kingdom_SIPPUnited Kingdom_StakehCzech Republic_SSP 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Figure 11: Comparison of the early out-payment situations and decumulation 
tax regimes 

Early-out-
payments 
with no 
limitation 

Tax treatment 
of early-out-
payments  

Tax treatment of 
decumulation  

Early-out-
payments less 
favourable than 
decumulation 

Member State 

Product code  

Austria 

Austria_PZV 

Belgium 

Belgium_LP 

Belgium_PP 

Cyprus 

Cyprus_IIP 

Czech Republic 

Czech Repuplic_SSP 

Denmark 

Denmark_Alder 

Denmark_RP 

Denmark_Aldersqp 

Estonia 

Estonia_VSF 

Germany 

Germany_Riester 

Germany_PP 

Greece 

Greece_PRSP 

Hungary 

Hungary_PRS 

Lithuania 

Lithuania_VF 

Luxembourg 

Luxembourg_IPS 

Malta 

Malta_PPPna 

Poland 

Poland_IKE 

Poland_PPE 

Poland_IKZE 

Portugal_LifeInsR 

Portugal 

Portugal_LifeInsH 

Portugal_PPR 

Slovakia 

Slovak Republic_PPF 

Spain 

Spain_IPP 

Spain_MP 

Spain_PPA  

United Kingdom 

United Kingdom_SIPP 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

YES 

T 

T 

T 

T 

E 

T 

T 

T 

T 

T 

T 

T 

T 

T 

T 

T 

T 

T 

T 

T 

T 

T 

E 

T 

T 

T 

T 

T 

T 

T 

T 

T 

E 

T 

T 

E 

E 

T 

T 

E 

E 

E 

T 

T 

E 

E 

T 

T 

T 

T 

E 

T 

T 

T 

T 

T 

DETRIMENTAL 
DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

UNCHANGED 
DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

UNCHANGED 
DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

DETRIMENTAL 

UNCHANGED 

UNCHANGED 

UNCHANGED 

UNCHANGED 
DETRIMENTAL 

DETRIMENTAL 

United Kingdom_Stakeh 

YES 

The table above lists the twenty-eight products (out of  forty-nine in the scope  of the 
study) in seventeen Member States for which an early out-payment is always possible. 
Products offering the possibility of early out-payments with limitations are not included 
in this analysis. 
For twenty-two of the products analysed, an early out-payment triggers an applicable 
tax regime that is less favourable than an out-payment at retirement age or similar. 
When products are coded ‘Unchanged’, this means that the tax regime in the event of 
early out-payments is the same as that applicable without early exit. 

June 2017 39 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Domestic and cross-border switching 

Figure  12:  Categorisation  of  PPPs  in  light  of  the  possibility  of  domestic 
switching  

Figure  13:  Categorisation  of  PPPs  in  light  of  the  possibility  of  cross-border 
switching 

The  two  trees  above  present  the  pension  saver’s  option  to  transfer  the  capital 
accumulated in a given PPP from the initial provider to a new one, whether within the 
same Member State or not.  

Three  sub-categories  are  defined,  depending  on  the  tax  consequences  of  such 
transfers: 

-  Switching  is  possible  and  does  not  trigger  any  tax  impact,  i.e.,  no  immediate 

taxation occurs at the time of the switch. However, fees may apply. 

-  Switching is  possible  (even  in  limited  cases,  e.g.  to  similar  PPPs)  and  triggers 

immediate taxation; 

-  No  switching is possible if there is no  option to switch investments to  another 
provider  or  if  the  EY  network  stated  that  in  practice  there  is  no  option  to 
switch. 

Domestic switching is possible without tax impact for forty-one products in twenty four 
Member States; cross-border switching is also allowed without tax impact for twenty-

June 2017 40 

Switching provider in the same MSImmediate taxationTransfer not possibleNo tax impactFrance_MadelinTNSFrance_MadelinAgrAustria_PZVBelgium_PPBulgaria_UVPFBulgaria_PVPFCzech Republic_SSPDenmark_AlderDenmark_RPDenmark_AldersopFinland_IPGermany_RiesterGreece_PRSPItaly_PIPLithuania_VFMalta_PPPaNetherlands_RBSANetherlands_RAInsANetherlands_RAInsDPoland_PPEPoland_IKZEPortugal_LifeInsRPortugal_LifeInsHPortugal_PFPortugal_PPRRomania_SPPSlovenia_VSPSweden_IPSUnited Kingdom_SIPPUnited Kingdom_StakehIreland_RACIreland_PRSACroatia_OPFEstonia_VSFFrance_PERPHungary_PRSItaly_OPFPoland_IKESpain_IPPSpain_MPSpain_PPA41Belgium_LP  Latvia_PPFLuxembourg_IPS3Cyprus_IIP          Germany_Rürup       Germany_PP          Malta_PPPna         Slovak Republic_PPF5Switchingprovider in the anotherMSImmediate taxationTransfer not possibleNo tax impactFrance_MadelinTNSFrance_MadelinAgrBelgium_PPBulgaria_UVPFBulgaria_PVPFDenmark_AlderDenmark_RPDenmark_AldersopFinland_IPGermany_RiesterGreece_PRSPItaly_PIPLithuania_VFMalta_PPPaNetherlands_RBSANetherlands_RAInsANetherlands_RAInsDPoland_PPEPoland_IKEPoland_IKZEPortugal_LifeInsRPortugal_LifeInsHPortugal_PFPortugal_PPRRomania_SPPSlovenia_VSPSweden_IPSUnited Kingdom_SIPPUnited Kingdom_Stakeh29Belgium_LP   Latvia_PPFLuxembourg_IPSIreland_RAC Ireland_PRSA5Cyprus_IIPGermany_RürupGermany_PPMalta_PPPnaSlovak Republic_PPFCroatia_OPFEstonia_VSFFrance_PERPHungary_PRSItaly_OPFSpain_IPPSpain_MPSpain_PPACzech Republic_SSPAustria_PZV15 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

nine  products  in  fifteen  Member  States.  Two  of  the  forty-one  trigger  immediate 
taxation in the event of a switch to a non-domestic provider. For eight of the forty-one 
products in four Member States, cross-border switching is not possible.  

Three products in three Member States are subject to immediate taxation in the event 
the saver switches providers within a Member State or to another Member State. 
The  regime  applicable  to  five  products  in  four  Member  States  does  not  allow  for  any 
type of switching (domestic or cross-border).  

If  switching  is  possible  but  triggers  immediate  taxation  and  potential  additional  fees, 
the operation could be deemed, in some Member States, to be a redemption followed 
by an investment in a new product.  

June 2017 41 

 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

Tax ID Card for personal pension products 

For the purpose of the study, a Tax ID Card was formalized for each personal pension 
product.  Indeed,  as  the  amount  of  information  gathered  is  very  large,  we  have 
established a summary overview of the various analyses carried out. This section aims 
to describe the Tax ID card framework.  

How to read a Tax ID Card 

Summary  cards  have  been  created  based  on  the  questionnaires  (appendix  5), 
following the model below.  

Figure 14: PPP ID Card grid 

June 2017 42 

   Country: Slovenia   Product: Voluntary supplementary pension insurance scheme  Local name: Prostovoljno dodatno pokojninsko zavarovanje Overall tax regime: EET   Upcoming Changes: None foreseen       Complimentary in-payments from employer: Yes   Comments: Foreign providers are allowed to sell the product   In-payments   Tax treatment: Partially Exempt (reduced tax base)  The annual tax base of a resident may be reduced by the amount of premiums for voluntary supplementary pension insurance paid by the person himself up to a maximum amount equal to 24% of mandatory contributions for pension and disability insurance for the insured, or 5.844% of the pension of the insured and not more than 2.819,09 euros annually. This maximum also includes premiums paid by the employee to individual pension schemes, with the employer having first priority to the scope of tax relief. In payments made by legal entities qualify as income. However, the payments are exempt from taxation.  Maximum amount that qualifies for tax relief:  Yes, EUR 2.819,09 per year.   Yields   Tax treatment: Exempt Conditions to qualify for exemption: NO.   Decumulation   Decumulation options: Lump-sum, annuities No mandatory or default option  Tax treatment:  Taxed  Lump sum is taxed at progressive tax rate ranging from 16% to 50%. Annuities are taxed at progressive tax rate ranging from 16% to 50%. However, only 50 % of income is included in tax base.  Early out-payments: Yes, in limited situations (lump-sum) Tax treatment Taxed (same taxation) 1 2 5 3 4 6 8 7  
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

The following information is included: 

1.  Identification  of  the  PPP:  Country  name,  product  name  in  English  and  in  the 

local language 

2.  Overall  tax  regime  and  upcoming  changes:  the  overall  tax  regime  is  given 

based on the following rules: 
  EET system: A form of taxation of pension plans, whereby contributions are 
Exempt  or  Partially  Exempt  from  personal  income  taxation.  Investment 
income and pension-fund capital gains are also Exempt or Partially Exempt 
and benefits are Taxed. 

  ETE  system:  A  form  of  taxation  whereby  contributions  are  Exempt  or 
Partially  Exempt  from  personal  income  taxation,  investment  income  and 
pension-fund  capital  gains  are  Taxed  and  benefits  are  Exempt  or  Partially 
Exempt.  

  All  further  combinations  (TEE,  TET,  EEE,  TTT,  etc.)  follow  the  same  logic 

mutatis mutandis. 

Upcoming changes regarding the tax incentive legislation are also given here. 

3.  Different  types  of  information  may  be  given  depending  on  the  relevant 

characteristics of the product: 
 

If  the  PPP  is  offered  only  to  a  limited  target  population  (person  that  could 
not  benefit  from  a  Pillar  1  Scheme  or  is  part  of  a  limited  population,  e.g. 
self-employed) 
If in-payments to the PPP may be supplemented by the employer 

 

4.  Comments:  Whether  or  not  non-domestic  providers  from  the  EU/EEA  are 

allowed to offer this product. 

5.  In-payments:  This  section  focuses  on  the  taxation  regime  for  in-payments  or 
contributions paid by the pension saver (and supplemented by the employer or 
the State if applicable). The following information is provided: 
  Tax treatment: Exempt, Partially Exempt or Taxed. 
  Tax  incentive:  If  in-payments  are  exempt  or  partially  exempt,  the  form  of 
the tax incentive is given: Tax reduction/Reduced tax base/tax credit/other 
(e.g. financial incentives) 

  Maximum  amount  that  qualifies  for  tax  relief:  If  such  conditions  exist,  the 
maximum amount is given in local currency and euros (approx. amount). 

6.  Yields:  This  section  focuses  on  the  taxation  regime  of  the  yield  during  the 

capitalisation phase, from a pension saver’s perspective: 
  Tax treatment: E for Exempt or T for Taxed. 
 

If any, specific conditions to qualify for the exemption 

7.  Decumulation:  This  section  focuses  on  the  taxation  regime  applicable  to  out-

payments 
  Type of out-payments: Whether out-payments can be made in the form of 

annuities/a lump sum/a combination of annuities and lump sum. 

  Tax treatment: Taxed is shown if all the decumulation options offered / or 
the  sole  option  are/is  taxed.  Exempt  is  shown  if  all  the  decumulation 
options  offered  /  or  the  sole  option  are/is  Exempt  or  Partially  Exempt. 
Decumulation  options  are  shown  if  at  least  one  of  the  options  offered  is 
Taxed while the other(s) is/are Exempt or Partially Exempt. 

June 2017 43 

 
 
 
 
 
 
 
 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

  Early  out-payments:  it  is  stated  whether  the  pension  saver  may  redeem 
funds before the pension age and the tax treatment of those out-payments, 
whether Taxed or Exempt (for exempt or partially exempt). 

8.  Switching: This section focuses on the possibility for a pension saver to switch 
investments  to  another  PPP  provider  during  the  accumulation  phase,  and 
describes both Domestic and Cross-border switching: 
 

Impossible: when there is no legal option for any type of switching or if the 
EY network has told us that such switching is impossible in practice, mainly 
for legal reasons. 

  No  tax  impact:  when  switching is  possible  from  a legal  standpoint  and  will 

 

not trigger any taxation upon the switch. 
Immediate taxation: when switching is possible from a legal standpoint and 
will trigger immediate taxation upon switching. 

June 2017 44 

 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

Austria – State-sponsored retirement provision 

Country:  Austria 

Product: 

State-sponsored 
retirement provision 

Local name: 

Prämienbegünstigte 
Zukunftsvorsorge (PZV) 

Overall tax 
regime: 

Upcoming 
changes: 

Comments: 

EEE (or EET)  

None planned 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially exempt (other) 
  Financial  incentives:  Top-up  by 
the  government  with  a  certain 
percentage 
to  stock 
relating 
market  development,  up  to  a 
rising  threshold  (1.53%  of  the 
social 
contribution 
ceiling multiplied by 36);  
These state contributions are tax 
exempt.  

security 

Yields 

Tax treatment:  Exempt  

Yields  are  exempt 
individual 
long 
distribution takes place 

as 

for 
as 

the 
no 

  Conditions 

exemption: No 

to 

qualify 

for 

Decumulation 

Decumulation 
options: 

Lump-sum and annuity  
No mandatory or default 
option 

Tax treatment:  Depends 

on 

the 

decumulation option 

  Lump  sum:  individual  has  to  pay 
back  50%  of  the  state  subsidies 
and a 25% tax on capital gain 
Annuities:  tax-exempted  (if  paid 
out  as  a  monthly  annuity  after 
retirement age) 

Early out-
payments: 

Yes 

Tax treatment:  Taxed 

  Tax  advantages  are  lost  in  the 
event  of  withdrawal  before 
retirement. 

Switching 

Domestic:  No tax impact 

Withdrawals  are  tax-exempt  if 

June 2017 45 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

the  entitlements  are  transferred 
to  an  occupational  or  personal 
pension plan. 

Cross-border:  No 

information/not 

possible 

General features 

Assets under management  €8098m 

Main distribution path: 

Information not available 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

Yes 

Possibility of changing level of in-
payments: 

Yes 

In-payments 

Investment options 

Limitations on investment options:  Different for different providers. Three main options are 

observed: 15% shares, 30% shares and 45% shares for 
policyholder <50 and 5% shares, 10% shares and 15% shares 
for policyholder >50 

Default option:  No 

Mitigation of investment risk 

Strategy choice:  Asset allocation: There is a minimum of 40% fixed for shares. The 
shares must be traded on a stock exchange in the EEA and market 
capitalization may not exceed 30% of gross domestic product 
(hereafter “GDP”). This means that only shares on the exchange in 
Austria, Slovenia, Slovakia, Czech Republic, Hungary, Poland, 
Lithuania and Latvia are possible. 

There has been a change in ratio for new business starting as from 1-
1-2010 change  
For new businesses starting as from 1-8-2013: For policyholders 
under 50 years, the proportion of shares is fixed between15% and 
60%. 60% of the shares must be traded on a stock exchange in the 
EEA and market capitalization may not exceed30% of GDP. This 
means that only shares on the exchange in Austria, Slovenia, 
Slovakia, Czech Republic, Hungary, Poland and Lithuania and Latvia 
are possible. 

For policyholders over the age of 50 years, the proportion of shares 
is fixed between 5% and 50%. 60% of the shares must be traded on 
a stock exchange in the EEA and market capitalization may not 
exceed 30% of GDP. This means that only shares on the exchange in 
Austria, Slovenia, Slovakia, Czech Republic, Hungary, Poland and 
Lithuania and Latvia are possible. 
Market example: Policyholders can choose the percentage of shares 
fixed by insurers. Defensive and balanced investment strategies can 

June 2017 46 

 
 
 
 
 
 
 
 
 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

Guarantee on minimum return:  No 

be observed.  

Mandatory advice from distributors:  Yes 

Advice 

June 2017 47 

 
 
 
 
 
 
 
 
Belgium 

Pension savings plan 

Country:  Belgium 

Product: 

Pension savings plan  

Local name:  Pensioensparen  

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially Exempt (tax 

reduction) 

Maximum 
amount that 
qualifies for 
tax relief: 

Contributions to a pension savings 
account are eligible for tax relief of 
30% of the amount contributed.  
There is a maximum annual limit of 
EUR 940 (for 2016) on individual 
contributions paid into a pension 
saving account.  
Extra contributions are not possible. 

Yields 

Tax treatment:  Exempt 

Condition to qualify for exemption: No 

Decumulation 

Decumulation 
options: 
Tax treatment:  Taxed 

Lump sum or annuity  
Default option: lump sum 

Plans are subject to an anticipated 
tax of 8% on the accumulated 
amount. 
If a plan was opened before the 
policyholder was 55, the tax is levied 
on the theoretical surrender value of 
the policy at the age of 60. 
If a plan is opened when the 
policyholder was 55 or older: the tax 
is due on the capital accumulated 
when the contract reaches 10 years. 

Early out-
payments: 

Yes 

Tax treatment:  Taxed 

  Taxed at 33% 

Switching 

Domestic:  No tax impact 

Capital may be transferred in full to 
a similar pension plan product 
without incurring taxation 

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Study on the feasibility of a European Personal Pension Framework 

Cross-border: 

No tax impact  
Same as switching within a Member 
State 

General features 

Assets under management  €27,726m 

Main distribution path:  Banks 

Accumulation phase 

Age limit for start of decumulation: 

In principle decumulation must start after the age of 60 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

Yes 

Possibility of changing level of in-
payments: 

Yes. In-payments are not mandatory 

In-payments 

Investment options 

Limitations on investment options:  Depends on the provider 

Default option: 

Information not available 

Mitigation of investment risk 

Strategy choice:  There are two main types of product in Belgium: 

- Savings funds (mainly banks): affiliates can select a specific 
asset  allocation:  aggressive,  defensive,  balanced.  Changes  in 
investment strategy are allowed 
-  Guaranteed-interest  products  (mainly  insurers):  affiliates 
cannot change the guarantee. The rate is discretionary and is 
fixed by the insurance company. 

Guarantee on minimum return:  Yes  (depends  on  the  provider).  Granted  on  built-up  reserves, 
not  on  future  premiums.  Subject  to  the  BNB  regulation  on 
maximum interest rate for life operations (2% in 2016) 

Advice 

Mandatory advice from distributors:  No 

June 2017 49 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term savings plan 

Country:  Belgium 

Product:  Long-term savings plan 

Local name:  Langetermijnsparen 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Comments: 

Foreign providers allowed 
to sell the product 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially Exempt (tax reduction) 

Maximum amount 
that qualifies for 
tax relief: 

Contributions to a pension savings account 
are eligible for tax relief of 30% of the 
amount contributed.  
There is a maximum annual limit of EUR 
2,260 (for 2016) on individual contributions 
paid into a pension saving account.  
Additional contributions do not benefit from 
tax relief. 
In-payments are subject to an insurance 
premium tax at 2%  

Yields 

Tax treatment:  Exempt. 

Condition to qualify for exemption: No 

Decumulation 

Decumulation 
options: 
Tax treatment:  Taxed 

Annuity or lump sum 
No mandatory or default option 

Plans are subject to an anticipated tax of 
10% on the accumulated amount. 
If a plan was opened before the policyholder 
was 55, the tax is levied on the theoretical 
surrender value of the policy at the age of 
60. 
If a plan was opened when the policyholder 
was 55 or older, the tax on the capital 
accumulated is due when the contract 
reaches 10 years.  

Early out-
payments: 

Yes 

Tax treatment  Taxed 

  Taxed at 33% 

Switching 

Domestic: 

Cross-border: 

Immediate taxation 
Redemption fees may be charged 
Immediate taxation 
Redemption fees may be charged 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Assets under management  €15,721m 

Main distribution path:  Banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

Yes 

Possibility of changing level of in-
payments: 

Yes, in-payments are not mandatory. No legal requirements. 

In-payments 

Investment options 

Limitations on investment options:  Depending on the product 

Default option: 

Information not available 

Mitigation of investment risk 

Strategy choice:  Products  are  usually  provided  by 

insurance  companies, 
therefore  these  are  usually  interest-guaranteed  products. 
However they can be investment fund products as well (profile 
depending on the product) 

Guarantee on minimum return:  Yes  (depends  on  the  provider).  Granted  on  built  up  reserves, 
not  on  future  premiums.  Subject  to  the  BNB  regulation  on 
maximum interest rate for life operations (2% in 2016) 

Advice 

Mandatory advice from distributors:  No 

June 2017 51 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

Bulgaria 

Professional voluntary pension plan 

Country:  Bulgaria 

Product: 

Professional voluntary 
pension plan 

Local name: 

Dobrovolen pensionen 
plan 

Overall tax 
regime: 

EEE 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

In-payments 

Tax treatment:  Partially Exempt 

(reduced tax base) 

Maximum 
amount that 
qualifies for tax 
relief: 

Employee contributions into UVPF 
(Universal Voluntary Pension 
Plans) and PVPP (Professional 
Voluntary Pension Plans) are tax 
deductible, up to 10% of the 
individual’s tax base.  

 

 

 

The individual is taxed 
for excess contributions 
(flat income tax rate of 
10%).  
Employer contributions 
are not included in the 
employee’s taxable 
income, up to BGN 60 
per month (excess 
contributions are taxed 
as benefits-in-kind). 
Social security 
contributions: Neither 
employee nor employer 
contributions are 
subject to obligatory 
social security 
contributions. 

Yields 

Tax treatment:  Exempt 

  Condition to qualify for 

exemption: No 

Decumulation 

Decumulation 
options: 

Lump sum (or other 
periodic payments) 
No mandatory or default 
options 
Tax treatment:  Exempt 

Early out-
payments: 

Yes, in limited situations 

Tax treatment:  Taxed 

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Study on the feasibility of a European Personal Pension Framework 

Switching 

Domestic:  No tax impact 
Cross-border:  No tax impact 

June 2017 53 

 
 
 
 
 
 
General features 

Assets under management  €218.81m 

Main distribution path: 

Insurance networks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  60 

Possibility of choosing age at 
decumulation: 

Yes 

Possibility of changing level of in-
payments: 

No legal provision. The option could be governed by the terms 
and conditions of the contract. 

In-payments 

Investment options 

Limitations on investment options:  Left  to  the  discretion  of  the  voluntary  pension  fund,  as  long 

as it complies with the requirements set out in local law. 

Default option:  Left  to  the  discretion  of  the  voluntary  pension  fund,  as  long 

as it complies with the requirements set out in local law. 

Mitigation of investment risk 

Strategy choice:  Defensive  –  most  of  the  rules  applicable  to  Pillar  2  pension 
funds are applicable. Investment requirements are set in local 
law. 

Guarantee on minimum return:  No 

Advice 

Mandatory advice from distributors:  No 

June 2017 54 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Universal voluntary pension plan 

In-payments 

Country:  Bulgaria 

Product: 

Universal voluntary 
pension plan 

Local name: 

Yniversalen 
dobrovolen pensionen 
plan 

Overall tax regime: 

EEE 

Upcoming changes: 

None planned 

Supplementary in-
payments by 
employer:  

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

Tax treatment:  Partially exempt (reduced 
tax base) 

Maximum 
amount that 
qualifies for tax 
relief: 

Employee contributions into UVPF 
(Universal Voluntary Pension Plans) and 
PVPP (Professional Voluntary Pension 
Plans) are tax deductible, up to 10% of 
the individual’s tax base.  

 

 

The individual is taxed for 
excess contributions (flat 
income tax rate of 10%).  
Employer contributions are 
not included in the employee’s 
taxable income, up to BGN 60 
per month (excess 
contributions are taxed as 
benefits-in-kind). 
Social security contributions: Neither 
employee nor employer contributions 
are subject to obligatory social security 
contributions. 

Yields 

Tax treatment:  Exempt 

  Conditions to qualify for 

exemption: No 

Decumulation 

Decumulation 
options: 

Lump sum, annuity  
No mandatory or default 
options 
Tax treatment:  Exempt 

Early out-
payments: 

Yes, in limited situations 

Tax treatment:  Taxed 

  Yes, in limited situations (acquisition or 

maintenance of the family home, 
unemployment exceeding a certain 
length, medical care, etc.) 

Switching 

Domestic: 

No tax impact 

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Study on the feasibility of a European Personal Pension Framework 

Cross-border: 

No tax impact 

: 

General features 

Main distribution path: 

Insurance networks 

Accumulation phase 

Age limit for start of decumulation:  Either the age limit applicable for the State-based pension, or 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

up to 5 years before the applicable age. 
Yes 

In-payments 

Possibility of changing level of in-
payments: 

Yes,  however  the  terms  and  conditions  of  the  contract  may 
provide some specifications. 

Investment options 

Limitations on investment options:  Left  to  the  discretion  of  the  voluntary  pension  fund,  as  long 

as it complies with the requirements set out in local law. 

Default option:  Left  to  the  discretion  of  the  voluntary  pension  fund,  as  long 

as it complies with the requirements set out in local law. 

Mitigation of investment risk 

Strategy choice:  Defensive  –  most  of  the  rules  applicable  to  Pillar  2  pension 
funds  are  applicable.  Investment  requirements  are  set  out  in 
local law. 

Guarantee on minimum return:  No 

Advice 

Mandatory advice from distributors:  No 

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Study on the feasibility of a European Personal Pension Framework 

Croatia – Open voluntary pension funds 

Country:  Croatia 

Product: 

Open voluntary pension 
funds  

Local name: 

Dobrovoljni mirovinski 
fondovi 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 
Yes  

Comments:  

Foreign providers are 
allowed to sell the 
product 

In-payments 

Tax treatment:  Partially Exempt (Other).  

  Payments to voluntary pension funds made by 

the employee do not benefit from a tax 
exemption.  
However, payments to voluntary pension funds 
made by the employer benefit from a tax 
exemption up to a specified limit (see above), 
i.e. contributions paid by the employer up to a 
specified limit are not included in the taxable 
income of the employee. 
Payments to voluntary pension funds made by 
the employer that do not qualify for tax 
exemption (as described above) are considered 
taxable benefits-in-kind (for tax and social 
security purposes) and subject to the 
progressive tax brackets/rates in Croatia 
(12%, 25% and 40% plus city tax). 
In addition, contributions paid by the State are 
not taxable. 
Supplements are limited to a maximum annual 
amount of HRK 750/ EUR 100. 

Maximum 
amount that 
qualifies for 
tax relief: 

HRK 500/EUR 70 monthly (HRK 6,000/EUR 800 
annually) 

Yields 

Tax treatment:  Exempt 

  Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 

Lump-sum, annuity, combination 
of lump-sum and annuity  
Default option Annuity  

Tax treatment:  Taxed 

  The tax rate applied is 12%, plus the city tax rate. The 
city tax rate can differ based on the place where the 
individual resides (e.g. the highest city tax rate is 18% 
for Zagreb). 

Early out-
payments: 

No 

Switching 

Domestic:  No tax impact 

Fees may apply 

Cross-border:  Transfer not possible 

General features 

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Study on the feasibility of a European Personal Pension Framework 

Assets under management  €398.80m 

Main distribution path:  Banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  50  

Possibility of choosing age at 
decumulation: 

Yes.  Assuming  the  individual  is  older  than  50,  decumulation 
may start any time after that age. 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Limitations on investment options:  There are six open voluntary pension funds in total.  

Default option: 

Four  funds  provide  a  defensive  investment  strategy  and  two 
funds provide a balanced investment strategy. 
Investment options vary with the provider. Holders can choose 
to invest in funds with different investment strategies: 

  Defensive - >70% debt securities (mostly 

government);  0%-30% equity instruments depending 
on the fund; other investments usually related to 
UCITS funds, etc. 

  Balanced - 40%-50% equity instruments; remaining 
investments mostly related to debt securities, UCITS 
funds etc. 
Mitigation of investment risk 

Strategy choice:  Depending on the provider and the terms of the policy, holders 
can  choose  to  invest  in  funds  with  different  investment 
strategies. 
No aggressive strategy. 

Guarantee on minimum return:  No 

Advice 

Mandatory advice from distributors: 

Information not available 

June 2017 58 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

Cyprus – Individual insurance pension plan 

Country:  Cyprus 

Product: 

Individual 
pension plan 

insurance 

Local name: 

Συνταξιοδοτικά 
Προγράμματα 

Overall tax 
regime: 

Upcoming 
changes: 

EEE (or EET) 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Yes 

Comments: 

Foreign 
allowed 
product. 

providers 
sell 
to 

are 
the 

In-payments 

Tax treatment:  Partially  exempt  (reduced  tax 

base) 

Maximum 
amount that 
qualifies for tax 
relief: 

Life  insurance  premiums  are  restricted  to 
7%  of  the  insured  amount.  In  addition,  all 
contributions  (medical  fund,  social  security 
insurance,  pension/provident 
life 
insurance  contributions)  are  restricted  to 
1/6 of taxable income. 

funds, 

Yields 

Tax treatment:  Exempt 

Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 

Lump sum, annuity  
No mandatory or default 

Tax treatment:  Depends  on  the  decumulation 

option 

  Lump sum: exempt 
Annuity: taxed  
The  tax  rate  is  changing,  depending  on  the 
amount  of  the  net  annual  taxable  income 
earned per tax year (0 to 35%). 
Yes 

Early out-
payments: 

Tax treatment:  Taxed 

In  the  event  of  cancellation  of  a  life 
insurance  policy  within  six  years  from  the 
day  of 
issue,  a  percentage  of  the 
premiums is taxable as follows: 

its 

 

 

Cancellation  within  three  years  -
30% 
Cancellation from four to six years 
-20% 

Switching 

Domestic:  Transfer not possible 
Cross-border:  Transfer not possible 

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Main distribution path: 

Insurance networks 

General features 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  There  are  no  special  legislation  and/or  regulations  and/or 
guidelines  currently  in  force  with  regard  to  PPPs  in  Cyprus. 
However,  such  rules  could  be  provided  for  by  the  terms  and 
conditions of different contracts.  
There  is  no  special  legislation  and/or  regulation  and/or 
guidelines  currently  in-force  with  regard  to  PPPs  in  Cyprus. 
However,  such  rules  could  be  provided  by  the  terms  and 
conditions of different contract.  

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

There  are  no  special  legislation  and/or  regulations  and/or 
guidelines  currently  in  force  with  regard  to  PPPs  in  Cyprus. 
However,  such  limitations  could  be  provided  for  by  the  terms 
and conditions of different contract.  

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

June 2017 61 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

Czech Republic – Supplementary saving plan 

Country:  Czech Republic 

Product: 

Local name: 

Supplementary saving 
plan 
Doplňkové Penzijní 
Spoření 

Overall tax 
regime: 

EEE 

Upcoming 
changes: 

There is a pending 
amendment (likely to be 
approved in the course 
of 2017) to the law 
whereby the exemption 
of employers’ 
contributions will be 
lost (both in the future 
and retroactively) in the 
event of a partial 
settlement payment 

Supplementary 
in-payments by 
employer: 

Yes 

In-payments 

Tax treatment:  Partially Exempt (reduced tax base) 

Maximum 
amount that 
qualifies for 
tax relief: 

In-payments may be deductible (if paid by 
the employee) or exempt (if paid by the 
employer), subject to certain limits. 

Contributions exceeding CZK 12,000 per year 
may be deducted. The deduction cannot 
exceed CZK 12,000 per year, i.e. 
approximately EUR 444. [15-5-c ITA] Since 
2017, the sum of the amounts by which the 
monthly contributions exceed the monthly 
threshold for maximum state contribution 
(currently CZK 1,000) have been able to be 
deducted. The deduction may not exceed CZK 
24,000, i.e. being approx. EUR 888. The 
difference between the amount paid and the 
maximum amount may not be utilized in the 
following years. Employer contributions are 
exempt from personal income taxation up to 
the limit of CZK 30,000 per year (CZK 50,000 
since 2017). 

Yields 

Tax treatment:  Exempt 

The income of the pension fund is subject to 
0% corporate tax rate. All payments made 
to the pension funds are exempt from Czech 
withholding tax. 

Decumulation 

Decumulation 
options: 

Lump sum and annuity  
No mandatory or default option 

Tax treatment:  Exempt 

Early out-
payments: 

Yes  
As of 2016 it is possible to withdraw a 
partial lump sum (one third of the funds) at 
the age of 18 provided the individual has 
contributed for at least 120 months before 
the withdrawal. In such a case the 
withdrawal does not result in termination of 
the insurance contract. Other early 
withdrawals are is possible only in the event 
of the termination of the insurance contract 
(without a transfer to another insurance 
provider).  

Tax treatment  Taxed 

Switching 

Domestic:  No tax impact.  

No specific rules exist - case by case review 
required. The transfer of funds from the 
abolished Pillar 2 to the individual’s bank 
account or to Pillar 3 is tax exempt. 

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Study on the feasibility of a European Personal Pension Framework 

Cross-border:  Transfer not possible  

General features 

Assets under management  €12 ,932m 

Main distribution path:  Banks,  insurance  networks,  broker  agents,  banks,  insurance 
companies and their tied agents, independent agents networks 

Accumulation phase 

Age limit for start of decumulation: 

Possibility of choosing age at 
decumulation: 

Timeframe for the accumulation of funds 

 60,  with  at  least  a  60-month  contribution  period.  Old-age 
pensions  may  also  begin  to  be  paid  out  to  an  individual  a 
maximum  of  five  years  before  he/she  reaches  the  age  for 
entitlement to an old-age pension from the mandatory pension 
insurance scheme.  
No 

In-payments 

Possibility of changing level of in-
payments: 

Yes,  based  on  an  agreement  between  the  individual  and  the 
insurance company. 

Investment options 

Limitations on investment options:  3-4 options, depending on the company 

The Mandatory Conservative Fund is always included 

Default option:  The Mandatory Conservative Fund is the default  option if the 

client does not choose a fund 

Mitigation of investment risk 

Strategy choice:  Depends  on  the  pension  company.  Generally  the  holder  can 
defensive 

(dynamic), 

choose 
(conservative) and balanced strategy. 

aggressive 

between 

Guarantee on minimum return:  No 

Advice 

Mandatory advice from distributors:  Yes,  providers  have  to  inform  and  advise  their  clients  as 

required by the law. 

June 2017 63 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denmark 

Annuity pension 

Country:  Denmark 

Product:  Annuity pension 

Local name:  Ratepension 

Overall tax 
regime: 

ETT 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

Maximum 
amount that 
qualifies for 
tax relief: 

base) 
Contributions are exempt, i.e. deductible for the 
determination of the personal income tax, up to 
DKK 52,400 (EUR 7,050) for 2016 and up to 
DKK 53,500 (EUR 7,200) for 2017.  
An individual who is liable for tax in Denmark must 
pay the labour market contribution 
(Arbejdsmarkeds-bidrag – AM) of 8% of gross 
salary, including contributions to pension schemes. 
There is no cap on the labour market contribution. 

Yields 

Tax treatment:  Taxed 

In Denmark, individuals are taxed on the growth of 
their pension schemes. The tax rate is fixed at 
15.3%. PAL (tax regarding growth of a pension 
scheme) is collected by the insurance company or 
pension fund, etc., which is obligated to withhold 
and pay the tax on behalf of the owner of the plan.  

Decumulation 

Decumulation 
options: 

Annuities 
Annuity duration: 10 years minimum, 25 years 
maximum,  
Mandatory option 

Tax treatment:  Taxed 

Benefits are taxed as personal income at a tax 
rate between 42% and 46% (progressive taxation) 
(plus “topskat”). In 2016 the marginal tax rate 
could not exceed 51.95%.  
Yes 

Early out-
payments: 

Tax treatment:  Taxed 

  The same tax treatment applies in cases of death 
or early retirement. Otherwise, if the person 
chooses to redeem funds before the retirement age 
instead of receiving the benefits as annuities (over 
min. 10 years and max. 25 years) 60% of the 
distributed amount of the early benefits will 
generally be taxed.  

Switching 

Domestic:  No tax impact 

Possible as long as the product type is the same  

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Study on the feasibility of a European Personal Pension Framework 

Cross-border:  No tax impact 

In the same conditions as domestic switching 

General features 

Assets under management  €52,461m 

Main distribution path:  Banks, pension funds, insurance companies, brokers 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  The  age  limit  for  the  start  of  decumulation  is  five  years 
before  the  State  pension  age  at  the  earliest.  The  State 
pension age is indexed to expected lifetime. 
Yes,  but  only  up  until  15  years  after  the  retirement  age,  as 
the  duration  of  the  annuity  period  is  minimum  10  years,  and 
the last out-payment can be disbursed no later than 25 years 
after the retirement age.  

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

June 2017 65 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement pension 

Country:  Denmark 

Product:  Retirement pension 

Local name: 

Alderspension  

Overall tax 
regime: 

ETT 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments 

Foreign providers are 
allowed to sell the 
product 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

Maximum 
amount that 
qualifies for tax 
relief: 

base) 
Contributions are deductible for the 
determination of the personal income tax 
and there is no limitation to the 
contribution amount per year provided 
that the PPP is not “interrupted” 
(meaning that it is not life-long). 
Exception: If the PPP is interrupted (and 
has an out-payment period of at least 10 
years) a limitation of DKK 52,400 (€ 
7,050) applies. 
An individual who is liable for tax in 
Denmark must pay the labour market 
contribution (Arbejdsmarkeds-bidrag – 
AM) of 8% of gross salary, including 
contributions to pension schemes.  

Yields 

Tax treatment:  Taxed 

In Denmark, individuals are taxed on the 
growth of their pension schemes. The tax 
rate is fixed at 15.3%. PAL (tax 
regarding growth of a pension scheme) is 
collected by the insurance company or 
pension fund, etc., which is obligated to 
withhold and pay the tax on behalf of the 
owner of the plan.  

Decumulation 

Decumulation 
options: 
Tax treatment:  Taxed 

Annuity, lump sum 
Default option: annuity  

Benefits are taxed as personal income at 
a tax rate between 42% and 46% 
(progressive taxation) (plus “topskat”). 
In 2016 the marginal tax rate could not 
exceed 51.95%.  
Yes  

Early out-
payments: 

Tax treatment:  Taxed 

  Generally taxed at a 60% flat rate. If the 
person chooses to redeem funds before 
the retirement age instead of receiving 
the out-payments as (non-interrupted) 
annuities, the 60% of the distributed 
amount of early benefits will generally be 
taxed.  

Switching 

Domestic:  No tax impact 

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Study on the feasibility of a European Personal Pension Framework 

Possible as long as the product type is 
the same.  

In the same conditions as domestic 
switching. 

Cross-border:  No tax impact 

General features 

Main distribution path:  Banks, pension funds, insurance companies, brokers 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  The  age  limit  for  the  start  of  decumulation  is  five  years 
before  the  State  pension  age  at  the  earliest.  The  State 
pension age is indexed to expected lifetime. 
Yes 

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

June 2017 67 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Age saving 

Country:  Denmark 

Product: 

Age savings 

Local name:  Aldersopsparing 

Overall tax 
regime: 

TTE 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments 
from employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Taxed 

  Contributions are non-deductible  

Yields 

Tax treatment:  Taxed 

In Denmark, individuals are taxed on the 
growth of their pension schemes. The tax 
rate is fixed at 15.3%. 
PAL (tax regarding growth of a pension 
scheme) is collected by the insurance 
company or pension fund, etc., which is 
obligated to withhold and pay the tax on 
behalf of the owner of the plan.  

Decumulation 

Decumulation 
options: 

Lump sum or annuity  
No mandatory or default option 

Tax treatment:  Exempt 

Early out-
payments: 

Yes 

Tax treatment  Taxed 

  Taxed at a 20% flat rate. 

If a person chooses to redeem funds from 
the PPP before the retirement age instead of 
receiving the benefits as a tax-exempt lump 
sum, the early benefits will be taxed for 
20% of the distributed amount. 

Switching 

Domestic:  No tax impact 

In general Aldersopsparing are transferable 
to similar aldersopsparing.  

Cross-border:  No tax impact 

There are no particular cross-border 
provisions for transfers of Aldersopsparing.  

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Study on the feasibility of a European Personal Pension Framework 

General features 

Main distribution path:  Banks, pension funds, insurance companies, brokers 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  The  age  limit  of  the  start  of  the  decumulation  is  five  years 
before  the  State  pension  age  at  the  earliest.  The  State 
pension age is indexed to expected lifetime. 
Yes 

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

June 2017 70 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

Estonia – Voluntary supplementary funded pension schemes 

Country:  Estonia 

Product: 

Local name: 

Voluntary supplementary 
funded pension schemes 
Vabatahtlik täiendav 
kogumispension 

Overall tax 
regime: 

EEE 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

In-payments 
Tax treatment:  Partially Exempt (reduced tax 

Maximum 
amount that 
qualifies for 
tax relief: 

base) 
The deduction is limited to 15% of the 
taxpayer’s income taxable in Estonia for 
the same tax period, but no more than 
EUR 6000 for the period of taxation 
(which is one calendar year). 

Tax treatment:  Exempt 

Yields 

  Conditions to qualify for exemption: No 

Decumulation 
options: 

Decumulation 
Lump sum, annuity, 
combination of lump sum and 
annuity 
No mandatory or default 
options  

Tax treatment:  Exempt 

Early out-
payments: 

Yes  

Tax treatment:  Taxed 

Switching 

Domestic:  No tax impact 

Cross-border:  Transfer not possible 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Assets under management  €349.5m 

Main distribution path:  Banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

Yes.  Savers  are  able  to  choose  the  age  at  which  the 
decumulation  phase  starts,  after  the  age  of  62  years  is 
reached. 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

June 2017 72 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

Finland – Pension insurance taken out by out an individual 

Country:  Finland 

Product: 

Local name: 

Pension insurance taken 
out by an individual 
Vapaaehtoiseen 
yksilölliseen 
eläkevakuutukseen ja 
pitkäaikaissäästämissopi
mukseen 

Overall tax 
regime: 

EET  

Upcoming 
changes: 

Yes 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially Exempt (reduced 
tax base) 

Maximum amount 
that qualifies for 
tax relief: 

Individual contributions are deductible 
up to EUR 5,000 per year. If the 
employer provides a voluntary personal 
plan for its employees, the tax-
deductible amount of contributions to a 
voluntary personal plan taken out by 
the employee decreases to EUR 2,500. 

Yields 

Tax treatment:  Exempt  

  Conditions to qualify for 

exemption: No 

Decumulation 

Decumulation 
options: 
Tax treatment:  Taxed 

Annuities, mandatory option 

Pension benefits received from 
voluntary personal plans taken out by 
individuals are taxed as capital income 
at a flat rate of 30%, up to EUR 
30,000. The excess amount is taxed at 
34 % (2016). 

Early out-
payments: 

Yes, in limited situations 
(unemployment, disability, 
divorce and death of a 
spouse).  

Tax treatment:  Taxed 

Switching 

Domestic:  No tax impact 

Cross-border:  No tax impact 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Assets under management  €12,249m 

Main distribution path:  Banks and insurance companies 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  Age  at  decumulation  cannot  be  lower  than  the  maximum 
statutory pensionable age (currently 68) to be eligible for tax 
relief. 
Yes 

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Limitations on investment options:  Two options: 

-  with profit (guaranteed return) and  
- 

unit-linked (return based on a stock market portfolio) 

Default option:  No 

Mitigation of investment risk 

Strategy choice:  Yes,  customers  can  choose  a  combination  of  guaranteed 

return and return based on a stock market portfolio 

Guarantee on minimum return:  Yes, customers  can  choose the option of having  a with-profit 

portfolio with a guaranteed minimum return of 1.5% 

Advice 

Mandatory advice from distributors:  No 

June 2017 75 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

France 

Popular retirement saving plan 

Country:  France 

Product: 

Local Name: 

Popular retirement 
saving plan 
Plan Epargne 
Retraite Populaire 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Comments: 

Foreign providers are 
able to sell the 
product 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

Maximum 
amount that 
qualifies for tax 
relief: 

base) 
10% of gross professional earnings of the 
previous year. This ceiling cannot be lower 
than 10% of the annual social security 
ceiling (PASS) of the previous year or 
greater than eight times the PASS of the 
previous year (EUR 38,040 in 2015). 

Tax treatment:  Exempt 

Yields 

  Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 

Annuity, combination of lump sum and 
annuity, (lump sum) 
Default option (annuity) 

Tax treatment:  Taxed 

  Annuities are subject to the same social security 

and income taxes as public pensions. These 
pensions are taxed at the individual’s marginal 
rate of income tax after a 10% deduction. These 
pensions are also subject to Contribution sociale 
généralisée (CSG) (6.6%), Contribution pour le 
remboursement de la dette sociale (CRDS) (0.5%), 
health contributions (1%) and the Contribution de 
solidarité pour l’autonomie (CASA)- (0.3%). Part 
of the CSG is deductible from income tax (4.2%). 

Pensioners can withdraw up to 20% of their PERP 
as a lump sum. In this case, pensioners can choose 
between three fiscal options: 
- The lump sum is taxed at the individual’s 
marginal rate of income tax after a deduction of 
10%. The lump sum is also subject to social 
security contributions. 
- The income tax due for the lump sum is equal to 
four times the additional tax that would be 
generated by a quarter of the lump sum being 
taxed at the marginal rate of income tax. The 
lump sum is also subject to social security 
contributions. 
- The lump sum is taxed in full at the rate of 7.5% 
and subject to CSG (6.6%) and CRDS (0.5%). CSG is 
not deductible under this option. ,. This option is 
only available if it is not possible to withdraw 
another lump sum from the same contract in the 
future. 

Early out-
payments: 

Yes, in limited situations 

Tax treatment:  Exempt 

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Study on the feasibility of a European Personal Pension Framework 

Switching 

Domestic:  No tax impact 

Cross-border:  Transfer not possible 

General features 

Assets under management  €12,380m 

Main distribution path:  Banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  Yes 

Possibility of choosing age at 
decumulation: 

There is no age limit for the start of decumulation phase but it 
may start at the earliest either at the minimum age provided 
for  by  law  (currently  62  years  old  for  persons  born  since  1 
January 1955) or, if earlier, the date on which the participant 
actually  liquidates  his  pension  rights  in  a  mandatory  pension 
scheme. 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Limitations on investment options: 

Investment options 

Investment  options  vary  with  provider  and  depend  on  holder 
choice.  However,  four  types  of  investment  options  can  be 
identified:: 
(1) allocation to euro-funds (defensive investment) 
(2) allocation to unit-linked products (aggressive investment) 
(3)  allocation  of  a  high  percentage  of  assets  to  unit-linked 
products at the time of subscription with a gradual conversion 
to a euro-fund as the holder gets close to the retirement age.   
(4) the percentage of allocation of assets between euro funds 
and unit-linked products is left to the discretion of the holder. 

Default option:  No 

Mitigation of investment risk 

Strategy choice:  Depends on the provider and the terms of the policy. 

Guarantee on minimum return:  No, but providers may offer a minimum guaranteed return for 

euro funds. 
There is no guarantee on return from unit-linked products. 

Mandatory advice from distributors:  Yes,  providers  have  to  inform  and  advise  their  clients  as 

required by the law. 

Advice 

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Study on the feasibility of a European Personal Pension Framework 

Personal  pension  plan  for  self-employed  workers  performing  a  non-
agricultural activity 

Country:  France 

Product: 

Personal pension plan for 
self-employed workers 
performing a non-
agricultural activity 

Local name:  Madelin 
Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Limited 
population: 

Limited to self-employed 
people performing a non-
agricultural activity 

Comments: 

Foreign providers are able 
to sell the product 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

Maximum amount 
that qualifies for 
tax relief: 

The tax deduction limit for contributions 
depends on the taxable profit. If the 
taxable profit is lower than the annual 
social security ceiling (PASS) (EUR 38,616 
in 2016) then the tax deduction is capped 
at 10% of the PASS. If the taxable profit is 
between 1 and 8 times the PASS, the cap is 
equal to 10% of the taxable profit plus 
15% of the taxable profit above 1 PASS. If 
the taxable profit is greater than 8 times 
the PASS, the cap is equal to 10% of 8 
times the PASS plus 15% of 7 times the 
PASS. 

Yields 

Tax treatment:  Exempt 

  Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 
Tax treatment:  Taxed 

Annuity, mandatory option 

  Annuities are subject to the same social 
security and income taxes as public 
pensions. These pensions are taxed at the 
individual’s marginal rate of income tax 
after a 10% deduction. This deduction 
cannot be lower than EUR 379 per 
pensioner or greater than EUR 3,711 per 
household. If the individual’s pension is 
lower than EUR 379, then the tax 
deduction is equal to the pension. These 
pensions are also subject to Contribution 
sociale généralisée (CSG)  (6.6%), 
Contribution pour le remboursement de la 
dette sociale (CRDS) (0.5%), health 
contributions (1%) and the Contribution de 
solidarité pour l’autonomie (CASA) - 
(0.3%). Part of the CSG is deductible from 
income tax (4.2%). 

Early out-
payments: 

Yes, in limited situations 

Tax treatment  Exempt 

Switching 

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Study on the feasibility of a European Personal Pension Framework 

Cross-border:  No tax impact 

Domestic:  No tax impact 

General features 

Assets under management  €32,738m 

Main distribution path: 

Insurance networks, banks 

Accumulation phase 

Age limit for start of decumulation:  Yes 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

There is no age limit for the start of decumulation phase but it 
may start at the earliest either at the minimum age provided 
for  by  law  (currently  62  years  old  for  persons  born  since  1 
January 1955) or, if earlier, the date on which the participant 
actually  liquidates  his  pension  rights  in  a  mandatory  pension 
scheme. 

In-payments 

Possibility of changing level of in-
payments: 

It is only possible to increase the level of in-payments. 

Limitations on investment options: 

Investment options 

Investment  options  vary  with  provider  and  depend  on  holder 
choice.  However,  four  types  of  investment  options  can  be 
identified: 
(1) allocation to euro-funds (defensive investment) 
(2) allocation to unit-linked products (aggressive investment) 
(3)  allocation  of  a  high  percentage  of  assets  to  unit-linked 
products at the time of subscription with a gradual conversion 
to a euro-fund as the holder gets close to the retirement age.   
(4) the percentage of allocation of assets between euro funds 
and unit-linked products is left to the discretion of the holder. 

Default option:  No 

Mitigation of investment risk 

Strategy choice:  Depends on the provider and the terms of the policy. 

Guarantee on minimum return:  Yes, there is 0% minimum guaranteed return for euro funds. 

There is no guarantee on return from unit-linked products. 

Advice 

Mandatory advice from distributors:  Yes,  providers  have  to  inform  and  advise  their  clients  as 

June 2017 79 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Study on the feasibility of a European Personal Pension Framework 

required by the law. 

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Study on the feasibility of a European Personal Pension Framework 

Personal plan for self-employed workers performing an agricultural activity 

Country:  France 

Product: 

Personal pension plan for 
self-employed workers 
performing an agricultural 
activity 

Local name:  Madelin agricole 
EET 
Overall tax 
regime: 

Upcoming 
changes: 

None planned 

Limited 
population: 

Limited to self-employed 
people performing an 
agricultural activity 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

Maximum 
amount that 
qualifies for 
tax relief: 

The tax deduction limit for contributions 
depends on the taxable profit. If the taxable 
profit is lower than the PASS (EUR 38,616 in 
2016) then the tax deduction is capped at 
10% of the PASS. If the taxable profit is 
between 1 and 8 times the PASS, the cap is 
equal to 10% of the taxable profit plus 15% 
of the taxable profit above 1 PASS. If the 
taxable profit is greater than 8 times the 
PASS, the cap is equal to 10% of 8 times the 
PASS plus 15% of 7 times the PASS. 

Tax treatment:  Exempt 

Yields 

  Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 
Tax treatment:  Taxed 

Annuities, mandatory option 

  Annuities are subject to the same social 

security and income taxes as public pensions. 
These pensions are taxed at the individual’s 
marginal rate of income tax after a 10% 
deduction. This deduction cannot be lower 
than EUR 379 per pensioner or greater than 
EUR 3,711 per household. If the individual’s 
pension is lower than EUR 379, then the tax 
deduction is equal to the pension. These 
pensions are also subject to the Contribution 
sociale généralisée (CSG) (6.6%), 
Contribution pour le remboursement de la 
dette sociale (CRDS) (0.5%), health 
contributions (1%) and the Contribution de 
solidarité pour l’autonomie - CASA - (0.3%). 
Part of the CSG is deductible from income 
tax (4.2%). 

Early out-
payments: 

Yes, in limited situations 

Tax treatment  Exempt 

Switching 

Domestic:  No tax impact 
Cross-border:  No tax impact 

June 2017 81 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
General features 

Assets under management  €4,794m 

Main distribution path: 

Insurance networks, banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  Yes 

Possibility of choosing age at 
decumulation: 

There is no age limit for the start of decumulation phase but it 
may start at the earliest either at the minimum age provided 
for  by  law  (currently  62  years  old  for  persons  born  since  1 
January 1955) or, if earlier, the date on which the participant 
actually  liquidates  his  pension  rights  in  a  mandatory  pension 
scheme. 

In-payments 

Possibility of changing level of in-
payments: 

It is only possible to increase the level of in-payments. 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Germany 

Rürup-Rente 

Country:  Germany 

Product:  Basis pensions 

Local name:  Rürup-Rente 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

Yes 

Supplementary 
in-payments 
byemployer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

  Policyholders are allowed to deduct a set 

amount of their contributions from their taxes 
as special expenses. 

Maximum 
amount that 
qualifies for 
tax relief: 

In 2016, 82% of a maximum 
EUR 22,767 for single individuals 
(EUR 45,543 for married couples) of 
contributions could be deducted from 
taxable income. 

Yields 

Tax treatment:  Exempt 

  No additional conditions required. 

Decumulation 

Decumulation 
options: 

Annuities 
Mandatory option 
Tax treatment:  Taxed - Germany is currently in a transition 

period (moving towards a retroactive taxation 
with full deductibility of contributions and full 
taxation of payments in the retirement phase). 
By 2040 pensioner income will be fully taxed. 
Until this date, pensioners benefit from a tax-
free part of their pension. The tax-free part is 
calculated based on the pension received in 
the first year after the retirement. For the 
individual pensioner, this tax-free part is 
nominally fixed at the beginning of retirement. 
Overall, the tax free portion decreases on a 
sliding scale until 2040 (where 100% of the 
pension payment will be taxed), meaning that 
each new generation of pensioners is taxed on 
a larger proportion of their income. For 
pensioners there is a lump-sum allowance of 
EUR 102. No tax has to be paid if the total 
income of the pensioner does not exceed EUR 
8,652 in total. 

Early out-
payments: 

No 

Switching 

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Study on the feasibility of a European Personal Pension Framework 

Domestic:  Transfer not possible 

Cross-border:  Transfer not possible 

General features 

Main distribution path: 

Insurance networks, brokers/agents 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  The start of the decumulation phase is not possible before the 

Possibility of choosing age at 
decumulation: 

age of 62. 
Individuals may choose an age higher than 62 years old. 

In-payments 

Possibility of changing level of in-
payments: 

It  is  possible  to  make  extra  contributions;  it  may  be  possible 
to suspend payments depending on the contract. 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

June 2017 84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Riester-Rente

Country:  Germany 

Product: 

Government-subsidized 
pension saving products 

Local name:  Riester-Rente 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Limited 
population: 

Other: employees obliged 
to pay into the state 
based pension scheme (or 
into the pension scheme 
for farmers) and state 
officers and equivalent 
persons (such as judges, 
soldiers, etc.) and their 
spouses (and equivalents) 

Comments: 

Foreign providers are 
allowed to sell the 
product 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially Exempt (tax 

reduction) 

Maximum amount 
that qualifies for 
tax relief: 

Yes, EUR 2,100 

Yields 

Tax treatment:  Exempt 

No look-through at 
beneficiary level. 

Decumulation 

Decumulation 
options: 

Annuity, lump sum, 
combination of lump sum and 
annuity  
No mandatory or default 
option 
Tax treatment:  Taxed 

Early out-
payments: 

Yes 

Tax treatment  Taxed 

Switching 

Domestic:  No tax impact 

Cross-border:  Transfer not possible 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Assets under management  €223,588m 

Main distribution path:  Banks, insurance brokers, insurance networks and online 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  The start of the decumulation phase is not possible before the 

Possibility of choosing age at 
decumulation: 

age of 62 
Individuals are able to choose an age higher than 62 years old. 

In-payments 

Possibility of changing level of in-
payments: 

It  is  possible  to  change  the  amount  of  payments  and  it  is 
mandatory  for  contracts  to  include  the  right  of  the  taxpayer 
to suspend the contract. 

Investment options 

Limitations on investment options:  The following products are available: bank savings plans, fund 
saving  plans,  fund-linked  pension  insurance,  private  pension 
insurance, occupational pension vehicles and private homes. 

Mitigation of investment risk 

Strategy choice:  There  are  different  investment  options,  e.g.  fund-linked 
pension insurance, bank savings plans, insurance products, etc. 
The  policyholder  can  choose  an  investment  options  which 
pursues  a  more  aggressive  strategy  (e.g.  fund-linked  pension 
insurance)  or  a  more  defensive  strategy  (bank  savings  plans 
or private homes). 

Guarantee on minimum return:  The pay-out is at least as high as the invested capital. 

Advice 

Mandatory advice from distributors:  Yes, there are common disclosure obligations for providers. 

June 2017 87 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private pensions 

Country:  Germany 

Product: 

Private pensions 

Local name:  Private Altersvorsorge 

Overall tax 
regime: 

TET 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Taxed 

  No deduction available for the 

beneficiary/taxpayer 

Maximum amount 
that qualifies for 
tax relief: 

N/A 

Yields 

Tax treatment:  Exempt 

Decumulation 

Decumulation 
options: 

Lump sum, annuity  
No mandatory or default option 
Taxpayers can generally choose freely 
between these options. Details depend 
on contractual terms and conditions. 

Tax treatment:  Taxed 

Early out-
payments: 

Yes, 

Tax treatment:  Taxed 

Switching 

Domestic:  Transfer not possible 
Cross-border:  Transfer not possible 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Main distribution path: 

Insurance networks, broker agents, online 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

Yes 

Possibility of changing level of in-
payments: 

Contributions  can  be  reduced  or  put  on  hold  according  to 
contractual terms and conditions  

In-payments 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Greece – Personal retirement savings plan 

Country:  Greece 

Product: 

Personal retirement 
savings plan 

Local name: 

Συνταξιοδοτικά 
Προγράμματα  

Overall tax 
regime: 

TTE 

Upcoming 
changes: 

None planned 

Comments: 

Foreign 
allowed 
product 

providers 
sell 
to 

are 
the 

In-payments 

Tax treatment:  Taxed 

Maximum amount 
that qualifies for 
tax relief: 

N/A 

Yields 

Tax treatment:  Taxed 

In cases where yields are paid by a 
foreign insurance company, the 
relevant amount will be added to the 
income tax return of the beneficiary, 
who will pay the relevant tax. To 
clarify, no withholding takes place at 
provider level. The beneficiary will pay 
the tax that corresponds to the yield 
along with any other tax liability from 
another source of income. 

Decumulation 

Decumulation 
options: 

Annuity, lump sum, 
combination of lump sum 
and annuity  
No mandatory or default 
options 
Tax treatment:  Exempt 

Early out-
payments: 

Yes 

Tax treatment:  Taxed 

Switching 

Domestic:  No tax impact 
Cross-border:  No tax impact 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Main distribution path: 

Insurance companies 

Accumulation phase 

Age limit for start of decumulation:  The decumulation phase may not start  before the age of 67  

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

No 

Possibility of changing level of in-
payments: 

No 

In-payments 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Hungary – Voluntary mutual pension fund 

Country:  Hungary 

Product: 

Voluntary mutual pension 
fund 

Local name: 

Önkéntes kölcsönös 
nyugdíjpénztár 

Overall tax 
regime: 

EEE 

Upcoming 
changes: 

None planned 

Complimentary 
in-payments 
from employer: 

Yes 

In-payments 

Tax treatment:  Partially Exempt (tax reduction) 

  Tax relief can be claimed on up to 20% of 

the individual in-payments, but the maximum 
amount is HUF 150 000 / tax year. Therefore 
to reach the maximum tax refund option of 
HU  750 000, individual cash in-payments are 
needed. 

Maximum amount 
that qualifies for 
tax relief: 

HUF 750,000, approx EUR 2,421. 

Yields 

Tax treatment:  Exempt 

Decumulation 

Decumulation 
options: 

Lump sum, annuity or 
combination of lump sum and 
annuity  
No mandatory or default options 

Tax treatment:  Exempt 

Early out-
payments: 

Yes, if funds are redeemed 
before reaching the retirement 
age, pay-outs from the pension 
funds may be taxable. 

Tax treatment:  Taxed 

Switching 

Domestic:  No tax impact 

Cross-border:  No transfer possible   

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Study on the feasibility of a European Personal Pension Framework 

General features 

Main distribution path: 

Insurance networks, banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

Yes 

Possibility of changing level of in-
payments: 

In-payments 

Yes,  it  is  possible  to  change  the  amount  of  in-payments  or 
take a break. However, if there is a minimum amount defined 
by  the  Fund  to  maintain  the  individual’s  membership,  it  must 
be  paid  every  month/year  and  will  be  automatically  withheld 
by the Fund even for the period of the break. 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Ireland 

Personal retirement savings accounts 

Country: 

Ireland 

Product: 

Personal retirement 
savings accounts 

Local name:  PRSAs 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

yes 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

Maximum amount 
that qualifies for 
tax relief: 

The maximum amount of pension 
contributions in respect of which an 
individual may claim tax relief may not 
exceed the relevant age-related percentage 
of the individual’s net relevant earnings in 
any year of assessment. The age-related 
percentage limits are: 
Under 30 years: 15% 
30-39: 20% 
40-49: 25% 
50 or over: 30% 
55 or over: 35% 
60 or over: 40% 
The 30% limit applies, irrespective of the 
lower age-based limits, to certain categories 
of professional sportspersons. 

The amount of employee contributions that 
can be tax-relieved is limited to an age-
related percentage amount of the 
employee’s earnings. There is also an overall 
upper limit on the amount of earnings that 
are taken into account for the purposes of 
giving tax relief. Since 2011, this limit has 
been set at EUR 115,000. 

Yields 

Tax treatment:  Exempt 

Decumulation 

Decumulation 
options: 

Combination of lump sum and 
annuity, annuity, lump sum, other 
No mandatory option or default 
options 

Tax treatment:  Taxed 

Early out-
payments: 

Yes, in limited situations 

Tax treatment:  Taxed 

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Study on the feasibility of a European Personal Pension Framework 

Switching 

Cross-border: 

Immediate taxation 

Domestic:  No tax impact 

General features 

Assets under management  €5,220m 

Main distribution path:  Life assurance companies and financial advisers. 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  From age 60, benefits can be drawn down at any time without 
condition.  Benefits  from  a  PRSA  must  be  drawn  down  before 
age 75.   
Yes - within the limits set out above. 

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Retirement Annuity Contracts 

Country: 

Ireland 

Product: 

Local name: 

Retirement annuity 
contracts 
RACs 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Limited 
population: 

Self-employed and 
workers without access to 
occupational pension 
schemes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

Maximum 
amount that 
qualifies for tax 
relief: 

The maximum amount of pension 
contributions in respect of which an 
individual may claim tax relief may not 
exceed the relevant age-related percentage 
of the individual’s net relevant earnings in 
any year of assessment. 
The age-related percentage limits are: 
Under 30 years: 15% 
30-39: 20% 
40-49: 25% 
50 or over: 30% 
55 or over: 35% 
60 or over: 40% 
The amount of employee contributions that 
can be tax-relieved is limited to an age-
related percentage amount of the 
employee’s earnings. There is also an overall 
upper limit on the amount of earnings that 
are taken into account for the purposes of 
giving tax relief. Since 2011, this limit has 
been set at EUR 115,000. 

Yields 

Tax treatment:  Exempt 

Decumulation 

Decumulation 
options: 

Combination of lump sum and 
annuity  
No mandatory option or default 
options 

Tax treatment: 

Taxed 

Early out-
payments: 

Yes, in limited situations  
Additional Voluntary 
Contributions (AVCs) 

Tax treatment:  Taxed 

  Funds accessed through the early access to 
AVCs option were subject to income tax at 
the higher rate but not subject to the 
Universal Social Charge. 

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Study on the feasibility of a European Personal Pension Framework 

Switching 

Cross-border: 

Immediate taxation  

Domestic:  No tax impact 

General features 

Main distribution path: 

Investment  managers, 
institutions. 

insurance  companies  and  credit 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  From age 60, benefits can be drawn down at any time without 
condition.  Benefits  from  a  RAC  must  be  drawn  down  before 
age 75.   
Yes – within the limits set out above. 

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

June 2017 97 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Italy 

Open pension fund 

Country: 

Italy 

Product:  Open pension funds 

Local name: 

Fondi pensione aperti 

Overall tax 
regime: 

ETT 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

Maximum 
amount that 
qualifies for tax 
relief: 

The contributions paid into open 
pension funds are deductible up 
to about EUR 5,164 per year. 

Yields 

Tax treatment:  Taxed 

Decumulation 

Decumulation 
options: 

Annuity, combination of lump 
sum and annuity.  
No mandatory or default 
options. 

Tax treatment:  Taxed  

Early out-
payments: 

Yes, in limited situations 

Tax treatment:  Taxed 

Switching 

Domestic:  No tax impact 

Cross-border:  Not possible 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Assets under management  €15,430m 

Main distribution path: 

Insurance networks and banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

Yes,  contributions  to  supplementary  pension  schemes  may 
voluntarily  go  beyond  the  retirement  age  required  under  the 
compulsory system of membership, provided that the member 
can  claim  at  least  one  year  of  contributions  at  the  date  of 
retirement. 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Limitations on investment options:  There are four options: 

- equity based (mostly equity assets) 
-Balanced (same amount of equities and bonds) 
-Bond based (mostly bond assets) 
-Guaranteed (offers a minimum guaranteed return or capital) 

Default option:  No, there is  no default option. Pension savers have to choose 

one of the four investment types 

Mitigation of investment risk 

Strategy choice:  Yes 

Guarantee on minimum return:  Yes, if the pension saver chooses the "Guaranteed" option 

Advice 

Mandatory advice from distributors:  Yes 

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Study on the feasibility of a European Personal Pension Framework 

Individual pension plans provided through life insurance contracts 

Country: 

Italy 

Product: 

Local name: 

Individual pension plans 
provided through life 
insurance contracts 
Piani individuali 
previdenziali (PIPs) 

Overall tax 
regime: 

ETT 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

Maximum amount 
that qualifies for 
tax relief: 

Contributions paid into open 
pension funds are deductible 
up to about EUR 5,164 per 
year. 

Yields 

Tax treatment:  Taxed 

Decumulation 

Decumulation 
options: 

Annuity, combination of lump 
sum and annuity 
No mandatory or default 
options 
Tax treatment:  Taxed  

Early out-
payments: 

Yes, in limited situations 

Tax treatment:  Taxed 

Switching 

Domestic:  No tax impact 

Cross-border:  Transfer not possible 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Assets under management  €26,835m 

Main distribution path: 

Insurance networks and banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

Yes,  contributions  to  supplementary  pension  schemes  may 
voluntarily  go  beyond  the  retirement  age  required  under  the 
compulsory  system  of  membership,  provided  that  at  the  date 
of  retirement  the  member  can  claim  at  least  one  year  of 
contributions. 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Limitations on investment options:  There are three options: 

-Switch 
-Lapse 
-Paid up 

Mitigation of investment risk 

Strategy choice:  This depends on the underlying assets of the PIP. The pension 

saver can choose: 
-Segregated funds –defensive strategy 
-Unit-linked – aggressive strategy 
-Mixed 

Guarantee on minimum return:  Yes as the pension saver can choose the "Guaranteed" option 

Advice 

Mandatory advice from distributors:  Yes 

June 2017 101 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Latvia – Private pension funds 

Country:  Latvia 

Product:  Private pension fund 
Local name:  Privātais pensiju fonds 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially Exempt (reduced 
tax base) 

Maximum amount 
that qualifies for 
tax relief: 

No  
However, there is an income limitation: 
voluntary contributions to private 
pension funds are tax deductible up to 
10% of the individual’s annual taxable 
income. The total of donations and 
gifts, payments into private pension 
funds, insurance premium payments 
and purchase costs of investment 
certificates of investment funds may 
not exceed 20% of the amount of the 
payer’s taxable income.  

Yields 

Tax treatment:  Exempt  

  Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 

Lump sum, annuity  
No mandatory or default 
option  
Tax treatment:  Taxed  

Income from investment of 
contributions to private pension funds 
is subject to a preferential tax regime. 
A 10% a tax rate applies. 

Early out-
payments: 

Yes, in limited situations  
When person has been recognized as a 
first-group invalid for life, or if a 
person works in a profession that has 
set an earlier retirement age 

Tax treatment:  Taxed 

  Taxed at the same rate (10%) 

Switching 

Domestic: 

Immediate taxation 

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Cross-border: 

Immediate taxation  

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General features 

Assets under management  €331,46m 

Main distribution path:  Banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  The  pensionable  age  specified  in  the  pension  scheme  may  not 
be less than 55 years, except for persons employed ins special 
professions specified in the regulations. 
Yes 

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes, depending on the terms and conditions of the contract. 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Lithuania – Third pillar voluntary 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

Country:  Lithuania 

Product:  Third pillar - voluntary 

Local name:  Savanoriško pensijų 
taupymo 

Overall tax 
regime: 

EEE 

Upcoming 
Changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

base) 
 

 

 

Employee contributions to third-pillar 
pension funds are considered as 
expenses and can be deducted as part of 
the annual deduction for expenses.  
The total amount of deducted expenses 
(pension contributions, life insurance 
premiums, interest on mortgage, 
educational expenses, etc.) may not 
exceed 25% of taxable income.  
Employer contributions are not 
considered to be employee taxable 
income if the amount of contributions 
does not exceed 25% of the employee’s 
employment-related income. 

Maximum amount 
that qualifies for 
tax relief: 

25% of taxable income 

Yields 

Tax treatment:  Exempt 

Decumulation 

Decumulation 
options: 

Lump sum or annuity or 
combination of lump sum and 
annuity  
No mandatory or default options 

Tax treatment:  Exempt 

The tax treatment of pension income from 
third pillar pension funds depends on the 
decumulation age, the length of the contract 
and whether the individual has deducted 
third pillar contributions from the income 
tax base. For contracts opened since 
1 January 2013, the following rules apply: If 
the duration of the contract is at least five 
years and the individual withdraws no more 
than five years before the statutory 
retirement age (for contracts before 2013, 
the age of 55 is set) or limited working 
capabilities are determined, pension benefits 
are tax-free. For pension income that does 
not qualify under these conditions, the 
income amount is equal to in-payments made 
provided the in-payments were not paid by 
employer or the individual did not reduce 
his/her taxable base with such in-payments. 
Otherwise, pension benefits are taxed at the 
flat income tax rate of 15%. 

Early out- Yes 

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payments: 

Tax treatment:  Taxed 

Switching 

Domestic:  No tax impact 
Cross-border:  No tax impact 

General features 

Assets under management  €61.55m 

Main distribution path:  Banks, insurance networks, broker agents 

Accumulation phase 

Age limit for start of decumulation:  This  cannot  be  more  than  five  years  before  the  pension  age 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

established for state pensions (i.e.55 years). 
Yes 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Luxembourg – Individual pension savings contract 

Country:  Luxembourg 

Product: 

Local name: 

Individual pension savings 
contracts 
Contrat individuel de 
prévoyance-vieillesse 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

A tax reform is planned 
for 2017 and could impact 
the ceilings for deductible 
contributions 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially exempt (reduced tax 

base) 

  Participants may not contribute to the PPP 
above the ceiling set for tax deductibility. 
Therefore, the maximum annual deductible 
amount is to be equal to the maximum 
annual investment made in the PPP. 

Maximum amount 
that qualifies for 
tax relief: 

The payment of premiums may 
benefit from a tax base 
reduction ranging from 
EUR 1,500 to 3,200 per year 
depending on the age of the 
taxpayer.  

Yields 

Tax treatment:  Exempt 

  Conditions to qualify for exemption: No  

Decumulation 

Decumulation 
options: 

Annuity, combination of lump 
sum (max 50% to benefit from 
tax incentives) and annuity  
No mandatory or default 
options 
Tax treatment:  Annuities: only 50% taxed at the 

participant’s average tax rate, 50% 
exempted. 
Lump sums (representing a maximum of 
50% of accrued benefits): treated as 
“extraordinary income”, taxed at half the 
overall effective tax rate. 

Early out-
payments: 

Yes 

Tax treatment  Taxed 

  Taxed without preferential regime 

Switching 

Domestic: 

Immediate taxation, without 
application of the advantageous tax 

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treatment  

Cross-border: 

Immediate taxation, without 
application of the advantageous tax 
treatment 

General features 

Main distribution path: 

Insurers and credit institutions 

Accumulation phase 

Age limit for start of decumulation:  Between  the  age  of  60  and  the  day  before  the  individual 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

reaches 75 years old. 
Yes, with the limits described above 

In-payments 

Possibility of changing level of in-
payments: 

Yes,  the  level  of  in  payments  is  freely  determined  between 
zero and the maximum ceiling. 

Limitations on investment options:  There are three main options: 

Investment options 

- market money funds 
- investment funds (unit-linked) 
-  capitalization  units  of  Collective  Investment  Undertakings 
(income units of CIUs are not allowed) 
There is a wide range of possible investment. 

Default option:  Mandatory according to the law. 

Mitigation of investment risk 

Strategy choice:  Depending on the kind of product selected: 

insurance 

contracts  with  a 

Insurance companies (regulated by the CAA). 
Life 
capital  guarantee: 
Capitalization of the premiums paid with a guaranteed rate of 
interest. 
Unit-linked life insurance contracts: No guaranteed capital.  
Credit institutions (regulated by the CSSF). 
For  both  insurance  companies  and  credit  institutions  who 
provide  products  without  a  capital  guarantee,  the  following 
restrictions must be applied: 
-  Each  service  provider  (insurance  company  or  credit 
institution)  must  offer  a  product  investing  exclusively  in  the 
euro money market (money market funds). 
-  The  investment  policy  of  these  products  (investment  funds 
or  CIUs)  is  subject  to  certain  absolute  caps  on  investment  in 
shares,  defined  according  to  the  age  of  the  subscriber 
contract  at  the  beginning  of  the  tax  year.  There  are  two 
possible options: 

Guarantee on minimum return:  Only  for  life  insurance  contracts  with  guaranteed  return: 
capitalization  of  premiums  at  the  legal  interest  rate  in  the 

  A "stock" formula OR 
  A "flux" formula  

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Mandatory advice from distributors:  Yes 

insurance industry as a minimum return 

Advice 

June 2017 109 

 
 
 
 
 
 
Malta 

Personal retirement plan 

Country:  Malta 

Product: 

Personal retirement plans 
are not approved by 
Malta’s Commissioner for 
Revenue  

Local name: 

No specific local name 

Overall tax 
regime: 

TET 

Upcoming 
changes: 

Based on the 2017 budget 
speech, pensioners who 
are older than 61 years of 
age will not pay income 
tax on their pension 
income (even if they 
receive pensions from 
different sources) 
provided that their 
pension does not exceed a 
certain income. 

However, so far, nothing 
has been published in this 
regard. 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Taxed 

  There are no tax incentives on in-

payments to this product. 

Yields 

Tax treatment:  Exempt 

Conditions to qualify for exemption: No.   

Decumulation 

Decumulation 
options: 

Lump sum, annuity or 
combination of lump sum and 
annuity  
Default option: annuity  

Tax treatment:  Taxed 

Lump sums received are: exempted up to 
30% of the total pension (value of 
assets accumulated), the remaining lump 
sum/income are taxed at the individual’s 
marginal income tax rate.  
Other options are taxed at the 
individual’s marginal income tax rate 
(maximum 35%). 

Early out-
payments: 

Yes 
No specific provision on this topic. 
Depends on terms and conditions of the 
contract. 
Tax treatment  Taxed 

Switching 

Domestic:  Transfer not possible 
Cross-border:  Transfer not possible 

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General features 

Assets under management  €3144.31m 

Main distribution path: 

Information not available 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  The principle applicable is that the decumulation phase should 
begin  at  an  age  not  earlier  than  fifty  and  not  later  than  the 
date when the individual attains the age of seventy-five. 
Yes, within the limits provided by law (50 to 75) 

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes,  however  the  terms  and  conditions  of  the  contract  may 
provide some specifications. 

Investment options 

Limitations on investment options: 

Information not available 

Default option: 

Information not available 

Mitigation of investment risk 

Strategy choice: 

Information not available 

Guarantee on minimum return: 

Information not available 

Advice 

Mandatory advice from distributors:  Not  mandatory  -  the  provider/distributor  will  analyse  the 
individual’s  situation  and  give  (informal)  advice  to  the 
individual on the most suitable PPP.  

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Retirement pension plan 

Country:  Malta 

Product: 

Retirement pension plan 
approved by Malta’s 
Commissioner for Revenue  

Local name:  No specific local name 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

Based on the 2017 budget 
speech, our understanding 
is that pensioners who are 
older than 61 years of age 
will not pay income tax on 
their pension income (even 
if they receive pensions 
from different sources) 
provided that their 
pension does not exceed a 
certain income. 
However, so far, nothing 
has been published in this 
regard. 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially Exempt (tax credit) 
Individuals who contribute to personal 
retirement schemes receive a non-
refundable tax credit equal to 15% of the 
member’s contribution, up to EUR 1,000 a 
year. The tax credit is consequently capped 
at EUR 150 a year. 

Maximum amount 
that qualifies for 
tax relief: 

EUR 1,000 per year  

Yields 

Tax treatment:  Exempt 

Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 

Lump sum, annuity or 
combinations of lump sum and 
annuity  
Default option: annuity  

Tax treatment:  Taxed 

Lump sums received are: exempted up to 
30% of the total pension (value of assets 
accumulated), the remaining lump 
sum/income are taxed at the individual’s 
marginal income tax rate.  
Other options are taxed at the individual’s 
marginal income tax rate (maximum 35%) 

Early out-
payments: 

No 

Switching 

Domestic:  No tax impact  

If the funds are not considered as income 
in the hands of the individual our 
understanding is that the funds will be 
taxed once they are redeemed / received by 
the individual. 

Cross-border:  No tax impact 

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If the funds are not considered as income 
in the hands of the individual our 
understanding is that the funds will be 
taxed once they are redeemed by the 
individual. 

General features 

Main distribution path:  Banks and Insurance networks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  The principle applicable is that the decumulation phase should 
begin  at  an  age  not  earlier  than  fifty  and  not  later  than  the 
date when the individual attains the age of seventy-five. 
Yes 

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes,  however  the  terms  and  conditions  of  the  contract  may 
provide some specifications. 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

June 2017 114 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Netherlands 

Retirement annuities 

Country:  Netherlands 

Product: 

Retirement annuities 
insurance 

Local name:  Lijfrenteverzekering 

Overall tax 
regime: 

EET or TEE 

Upcoming 
changes: 

There is an ongoing 
discussion with respect to 
further limitation of 
facilitated pension 
accrual with TEE 
incentives, for instance by 
lowering the maximum 
yearly income for which 
TEE tax incentives may 
apply for pensions in the 
second pillar and PPPs in 
the third pillar. 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially exempt (reduced tax base) 

or Taxed 
EET up to an income of EUR 101,519. 
TEE for in-payments from  income above EUR 
101.519 

Maximum 
amount that 
qualifies for 
tax relief: 

The limitation is based on the policyholder’s 
annual income. Contributions to private personal 
old-age provisions are tax-deductible up to a 
maximum amount. Contributions are limited to 
13.8% of annual income (with a ceiling of EUR 
101,519) minus a threshold for the first pillar 
(general state pension), and taking into account 
accrued pension rights in the occupational 
pension plan. 

Yields 

Tax treatment:  Exempt 

Conditions to qualify for exemption: No 

Decumulation 
options: 

Decumulation 

Annuity 
Mandatory option 
Annuities starting before pensionable age must 
have a lifelong duration.  
Annuities starting at pensionable age are allowed 
if they do not exceed a yearly amount of 
EUR 21,248, , provided that they have a minimum 
duration of five years. If the yearly amount does 
exceed EUR 21,248, the duration must be lifelong. 

Tax treatment:  EET system: Taxed 

Basically, the taxable income will be taxed based 
on marginal tax rates (maximum 52%). 
TEE system: Exempt 

Early out-
payments: 

No 

Switching 
Domestic:  No tax impact 

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Cross-border: 

No tax impact 

General features 

Main distribution path: 

Insurers, broker agents, online 

Accumulation phase 

Age limit for start of decumulation:  Annuities  must  start  five  years  after  pensionable  age  (state 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

pension) at the latest. 
Yes 

In-payments 

Possibility of changing level of in-
payments: 

Yes,  although  the  provider’s  conditions  may  contain 
commercial restrictions. 

Investment options 

Limitations on investment options:  Depends  on  the  provider.  50%  stocks  /  50%  bonds,  or  40% 

stocks / 60% bonds.  
When  the  saver  approaches  pension  age,  the  provider 
automatically changes to a more defensive strategy. 

Default option:  Depends  on  the  provider.  50%  stocks  /  50%  bonds,  or  40% 

stocks / 60% bonds.  
When  the  saver  approaches  pension  age,  the  provider 
automatically changes to a more defensive strategy. 

Mitigation of investment risk 

Strategy choice:  Yes,  depending  on  the  provider.  A  strategy  is  considered 
defensive  if  <30%  is  invested  in  stocks,  and  offensive  if 
>70% is invested in stocks.  

Guarantee on minimum return:  No 

Advice 

Mandatory advice from distributors:  No 

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Bank saving account for retirement 

Country:  Netherlands 

Product: 

Bank saving account for 
retirement 
Local name:  Lijfrentespaarrekening 

Overall tax 
regime: 

EET or TEE 

Upcoming 
Changes: 

There is an ongoing 
discussion concerning 
further limitation of 
facilitated pension 
accrual with TEE 
incentives, for instance by 
lowering the maximum 
yearly income for which 
TEE tax incentives may 
apply for pensions in the 
second pillar and PPP’s in 
the third pillar. 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially exempt (reduced tax 
base) or Taxed 
EET up to an income of EUR 101,519. 
TEE for in-payments from income above EUR 
101,519.  

Maximum 
amount that 
qualifies for 
tax relief: 

The limitation is based on the policyholder’s 
annual income. Contributions to private 
personal old-age provisions are tax-
deductible up to a maximum amount. 
Contributions are limited to 13.8% of annual 
income (with a ceiling of EUR 101,519) minus 
a threshold for the first pillar (general state 
pension) and taking into account accrued 
pension rights in the occupational pension 
plan. 

Yields 

Tax treatment:  Exempt 

Conditions to qualify for exemption: No 

Decumulation 
options: 

Decumulation 

Annuity  
Mandatory option 
Annuities starting before pensionable age 
must have a minimum duration of 20 years, 
plus the number of years between the first 
payment and the pensionable age. Annuities 
starting at pensionable age are allowed if 
they do not exceed a yearly amount of EUR 
21,248, provided that they have a minimum 
duration of five years. If the yearly amount 
does exceed EUR 21,248, the duration must be 
at least 20 years. 

Tax treatment:  EET system: Taxed 

Basically, the taxable income will be taxed on 
the basis of marginal tax rates (maximum 
52%). 
TEE system: Exempt 

Early out-
payments: 

No 

Switching 

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Cross border:  No tax impact 

Domestic:  No tax impact 

General features 

Assets under management  €9,659m 

Main distribution path:  Banks, broker agents, online 

Accumulation phase 

Age limit for start of decumulation:  Annuities  must  start  five  years  after  pensionable  age  (State 

Timeframe for the accumulation of funds 

Possibility to choose the age of 
decumulation: 

pension) at the latest. 
Yes 

In-payments 

Possibility to change level of in-
payments: 

Yes,  although  the  provider’s  conditions  may  contain 
commercial restrictions. 

Investment options 

Limitations of investment options:  Fixed or variable interest rates 

Default option: 

Information not available  

Mitigation of investment risk 

Strategy choice:  The product  does  not allow selection of a more aggressive or 
defensive  investment  strategy  (it  is  a  bank  savings  product, 
not an investment product) 

Guarantee on minimum return:  Yes  (when  a  fixed  interest  rate  is  chosen,  the  return  is 

between 0.55% and 1.65%). 

Advice 

Mandatory advice from distributors:  No 

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Study on the feasibility of a European Personal Pension Framework 

Investment  share  in  an  investment  institution  or  UCITS  for  retirement 
payment

Country:  Netherlands 

Product: 

Investment share in an 
investment institution or 
UCITS for retirement 
payments 
Local name:  Lijfrentebeleggingsrecht 

Overall tax 
regime: 

EET or TEE 

Upcoming 
changes: 

There is an ongoing 
discussion concerning 
further limitation of 
facilitated pension 
accrual with TEE 
incentives, for instance by 
lowering the maximum 
yearly income for which 
TEE tax incentives may 
apply for pensions in the 
second pillar and PPPs in 
the third pillar. 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially exempt (reduced tax 
base) or Taxed 
EET up to an income of EUR 101,519. 
TEE for in-payments related to income above 
EUR 101,519.  

Maximum 
amount that 
qualifies for 
tax relief: 

The limitation is based on the annual income 
of the policyholder. Contributions to private 
personal old-age provisions are tax-deductible 
up to a maximum amount. Contributions are 
limited to 13.8% of annual income (with a 
ceiling of EUR 101,519) minus a threshold for 
the first pillar (general state pension) and 
taking into account accrued pension rights in 
the occupational pension plan. 

Yields 

Tax treatment:  Exempt 

Conditions to qualify for exemption: No 

Decumulation 
options: 

Decumulation 

Annuity  
Mandatory option 
Annuities starting before pensionable age 
must have a minimum duration of 20 years, 
plus the number of years between the first 
payment and the pensionable age.  
Annuities starting at pensionable age, which 
do not exceed a yearly amount of EUR 21,248, 
are allowed provided that they have a 
minimum duration of five years. If the yearly 
amount does exceed EUR 21,248, the duration 
must be at least 20 years. 

Tax treatment:  EET system: Taxed 

Basically, the taxable income will be taxed on 
the basis of marginal tax rates (maximum 
52%). 
TEE system: Exempt 

Early out-
payments: 

No 

Switching 

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Domestic:  No tax impact 

Cross-border:  No tax impact 

General features 

Main distribution path:  Broker  agents,  investment  institutions,  undertakings  for  the 
investment  of  transferable  securities  (UCITS), 

collective 
online 

Accumulation phase 

Age limit for start of decumulation:  Annuities  must  start  five  years  after  pensionable  age  (State 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

pension) at the latest. 
Yes 

In-payments 

Possibility of changing level of in-
payments: 

Yes,  although  the  provider’s  conditions  may  contain 
commercial restrictions. 

Investment options 

Limitations on investment options:  Fixed or variable interest rates 

Default option: 

Information not available 

Mitigation of investment risk 

Strategy choice:  The product  does  not allow selection of a more aggressive or 
defensive investment strategy (it is a savings product, not an 
investment product). 

Guarantee on minimum return:  Yes  (when  a  fixed  interest  rate  is  chosen,  the  return  is 

between 0.95% and 1.50%). 

Advice 

Mandatory advice from distributors:  No 

June 2017 120 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Poland 

“IKE” 

Country:  Poland 

Product: 

Local name: 

Individual retirement 
account 
Indywidualne konto 
emerytalne (IKE) 

Overall tax 
regime: 

TEE 

Upcoming 
changes: 

None planned 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Taxed 

  Contributions to IKEs are taxed at the 
marginal income tax rate in the sense 
that contributions are made from 
after-tax earnings and do not benefit 
from tax relief.  

Yields 

Tax treatment:  Exempt  

  Conditions to qualify from exemption: 
Income from savings for individual 
retirement accounts obtained in 
connection with the collection and 
payment of funds by the saver is tax 
exempt. The exemption does not apply 
if the saver accumulates savings to 
more than one individual retirement 
account, unless the terms and 
conditions of the contract provide for 
such a possibility. 

Decumulation 

Decumulation 
options: 

Annuity or lump sum  
No mandatory or default 
option 

Tax treatment:  Exempt 

Out-payments are not taxed regardless 
of decumulation option.  

Early out-
payments: 

Yes 

Tax treatment  Taxed 

  Early withdrawal from IKE is possible 

but in that case capital gains are taxed 
at 19%. 

Switching 

Domestic:  No tax impact 

Transfers are only allowed: from IKE to 
IKE; IKE to PPE; PPE to IKE  

Cross-border:  No tax impact 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Assets under management  €312,56m 

Main distribution path:  Banks, insurance networks, broker agents, online, others. 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  The  age  limit  to  benefit  from  the  preferential  tax  regime  is 

Possibility of choosing age at 
decumulation: 

the legal retirement age (currently 60 years old) 
No, individuals cannot start decumulation before the age of 60 
or 55 and reaching the age at which retirement rights begin. 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available  

Advice 

Information not available 

June 2017 123 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
“IKZE” 

Country:  Poland 

Product: 

Individual retirement 
precaution account 

Local name: 

Indywidualne konto 
zabezpieczenia 
emerytalnego - IKZE 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

Maximum amount 
that qualifies for 
tax relief: 

Contributions to IKZEs are tax deductible up 
to a limit. Annual contributions into IKZEs 
are capped at 1.2 times the national 
projected average monthly salary (PLN 
4,866/ EUR 1132 in 2016).  

Yields 

Tax treatment:  Exempt  

  Conditions to qualify for exemption: Income 
from savings for individual retirement 
account obtained in connection with the 
collection and payment of funds by saver is 
tax exempt. The exemption does not apply if 
the saver accumulates savings to more than 
one individual retirement account, unless the 
terms and conditions of the contract provide 
for such a possibility. 

Decumulation 

Decumulation 
options: 

Lump sum or annuity  
No mandatory or default option 

Tax treatment:  Taxed  

IKZE benefits can be paid at the age of 65 or 
older as a lump sum or as regular payments 
(instalments). Both are taxed at 10%. 

Early out-
payments: 

Yes 

Tax treatment:  Taxed 

  Early withdrawal from an IKZE is possible, 

but the amount of withdrawal must be added 
to revenue (other sources).  

Switching 

Domestic:  No tax impact  

Transfers are only allowed from an IKZE to 
another IKZE 

Cross-border:  No tax impact  

Transfers are only allowed from an IKZE to 
another IKZE. Transfers to other products 

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are impossible.  

General features 

Assets under management  €34.2m 

Main distribution path:  Banks, insurance networks, broker agents, online, others. 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  At the age of 65 years or older 

Possibility of choosing age at 
decumulation: 

No,  individuals  cannot  start  decumulation  before  the  age  of 
65. 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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“PPE” 

Country:  Poland 

Product:  Employee pension plan 

Local name: 

Pracowniczy program 
emerytalny – PPE 

Overall tax 
regime: 

TEE 

Upcoming 
changes: 

None planned 

Limited 
population: 

Employees 

Complimentary 
in-payments 
from employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Taxed 

  Contributions to PPEs are subject to 
taxation according to Polish PIT Act. 
Employers’ part of contributions is 
excluded from the social security basis.  
No 

Maximum amount 
that qualifies for 
tax relief: 

Yields 

Tax treatment:  Exempt  

  Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 

Annuity or lump sum, no 
mandatory or default option 

Tax treatment:  Exempt  

Out-payments are not taxed regardless 
of decumulation option. 

Early out-
payments: 

Yes 

Tax treatment  Taxed 

  Earlier withdrawal from PPE is possible 
but in that case capital gains are taxed 
at 19%. 

Switching 

Domestic:  No tax impact 

Transfers are only allowed from: PPE to 
PPE; PPE to IKE; IKE to PPE. 

Cross-border:  No tax impact 

The law does not distinguish transfer 
payments between participating entities. 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Assets under management  €584.3m 

Main distribution path:  Banks, insurance networks, online, others 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  The  age  limit  to  benefit  from  the  tax  preferential  regime  is 

Possibility of choosing age at 
decumulation: 

the legal retirement age (currently 60 years old) 
No, individuals cannot start decumulation before the age of 60 
or 55 and reaching the age at which retirement rights begin.  
In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available  

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Portugal 

Open-ended pension funds 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

Country:  Portugal 

Maximum amount 
that qualifies for 
tax relief: 

Product:  Open-ended pension funds 
Fundos de Pensões 
Abertos 

Local name: 

Overall tax 
regime: 

ETE 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

base) 
Individuals may deduct from 
their taxable income 20% of 
their contributions to a private 
pension scheme up to an 
annual ceiling of EUR 400 per 
year for persons aged less than 
35 years, EUR 350 per year for 
persons aged between 35 and 
50 years, and EUR 300 per year 
for persons aged over 50 
years. 

Yields 

Tax treatment:  Taxed 

Decumulation 
options: 

Decumulation 

Lump-sum, partial lump sum, 
annuity, annuity over a fixed 
period. 
No mandatory or default 
options  

Tax treatment:  Exempt 

 

 

Annuities: The capital component is 
not subject to tax. Pension income 
derived from pension funds is subject 
to taxation at the marginal income 
tax rate. If it is not possible to 
distinguish between contributions and 
returns, then only 15% of the 
annuities are subject to taxation at 
the marginal income tax rate.  
Lump sum: The capital component is 
not subject to tax. Reimbursement 
under legal conditions. 

Early out-
payments: 

No early out-payments except 
payments under specific, 
permitted conditions. 

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Tax treatment:  NA 

Switching 

Domestic:  No tax impact 
Cross-border:  No tax impact 

General features 

Assets under management  No information available 

Main distribution path:  Banks, insurance networks, broker agents, online 

Accumulation phase 

Age limit for start of decumulation:  The  decumulation  phase  may  start  at  the  age  of  60  or,  for 
example, as soon as the individual is in a retirement situation. 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

Yes  

Possibility of changing level of in-
payments: 

Yes 

In-payments 

Investment options 

  No information available 

Mitigation of investment risk 

  No information available 

Advice 

  No information available 

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“PPR” 

Country:  Portugal 

Product:  PPR 

Local name:  Plano Poupança Reforma 

Overall tax 
regime: 

ETT 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

Maximum amount 
that qualifies for 
tax relief: 

Individuals may deduct from 
their taxable income 20% of 
their contributions to a 
private pension scheme up to 
an annual ceiling of EUR 400 
per year for persons aged 
less than 35 years, EUR 350 
per year for persons aged 
between 35 and 50 years, and 
EUR 300 per year for persons 
aged over 50 years) 

Yields 

Tax treatment:  Taxed 

Decumulation 
options: 

Decumulation 

Lump-sum or annuity or 
combination of lump sum and 
annuity. 
No mandatory or default 
option 

Tax treatment:  Taxed 

Early out-
payments: 

Yes 

Tax treatment:  Taxed 

Switching 

Domestic:  No tax impact 
Cross-border:  No tax impact 

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Study on the feasibility of a European Personal Pension Framework 

Assets under management  €1690m 

General features 

Main distribution path:  Bancassurance,  insurance  companies  networks,  broker  agents 

and homebanking 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  From  a  tax  standpoint,  the  decumulation  phase  may  start  at 
the age of 60 or, for example, as soon as the individual is in a 
retirement situation. 
Yes, individuals can choose the age at which the decumulation 
phase starts, provided this occurs after the age of 60 or after 
being in a retirement situation. 

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Limitations on investment options:  Usually  the  conditions  do  not  prescribe  any  investment 
options  besides  the  investment  policy  of  the  product.  In 
general  there  are  no  options  in  terms  of  profile  (aggressive, 
defensive or other investment options). 

Default option:  There is no default investment option but there are applicable 
legal  limits,  established  in  law.  There  are  investment  policies 
with  central  values  and  the  funds  are  invested  according  to 
them. Two examples are: 
Montepio  PPR5:  75%  to  100%  bonds,  0%  to  5% equities,  0% 
to 15% property, 0% to 10% liquid assets; 
Liberty PPR Mais Jovem: 80% bonds, 10% equities, 10% other. 

Mitigation of investment risk 

Strategy choice:  Yes, depends on the structure of the product. 

Guarantee on minimum return:  Depends on the product and the insurer. 

Advice 

Mandatory advice from distributors:  Yes 

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Study on the feasibility of a European Personal Pension Framework 

Life insurance with specific retirement objective  

Country:  Portugal 

Product: 

Life insurance with 
specific retirement 
objective 

Local name: 

Contrato de 
aposentadoria de seguro 
de pensão  

Overall tax 
regime: 

ETT 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax 
treatment: 

Partially Exempt (reduced tax base) 

  Exclusively regarding “risk professions” 
– miners, fishermen and athletes – life 
insurance premiums paid on contracts 
that solely provide guarantees upon 
death, disability or retirement; provided 
benefits are paid after the age of 55 
years and no benefits are paid within the 
first five years of duration of the 
contract, are deductible from income, up 
to EUR 2,096.10. 

Maximum 
amount that 
qualifies for 
tax relief: 

The cap for the deduction from 

income is EUR 2,096.10. 

Yields 

Tax 
treatment: 

Taxed 

Decumulation 

Decumulation 
options: 

Lump sum, annuity, combination 

of lump sum and annuity  
No mandatory or default options 

Tax 
treatment: 

Taxed 

Early out-
payments: 
Tax 
treatment: 

Yes 

Taxed 

Switching 
Domestic:  No tax impact 

Cross-border: 

No tax impact 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Main distribution path:  Bancassurance and broker agents are the most representative 

channels in Portugal  

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  Normal retirement age is 66 years and 2 months old (in 2017, 
the normal retirement age will be 66 years and 3 months old). 
Benefits have to be paid after the age of 55. 
Yes,  individuals  are  able  to  choose  the  decumulation  start 
provided it occurs after the age of 55 and provided five years 
of contract duration have elapsed. 

Possibility of choosing age at 
decumulation: 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Life insurance with specific retirement objective – Handicapped persons 

Country:  Portugal 

Product: 

Life insurance with 
specific retirement 
objective for Handicapped 
persons 

Local name: 

Seguro de vida - pessoas 
com deficiência  

Overall tax 
regime: 

ETE 

Upcoming 
changes: 

None planned 

Complimentary 
in-payments 
from employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially Exempt (tax credit) 

Maximum amount 
that qualifies for 
tax relief: 

Conditions for the 25% tax 
credit to apply: 

 

 

The life insurance contract must 
exclusively guarantee the risks of 
death, disability or old-age 
retirement 
In case of old age retirement, 
benefits must be paid after the 
age of 55 and provided five years 
of contract duration have elapsed 
In order for the tax credit to 
apply, if insurance premiums 
were paid by third parties, they 
must have been considered to be 
income of the handicapped person 
  Only a 60% or more handicapped 
status qualifies for tax purposes. 

 

Yields 

Tax treatment:  Taxed 

Decumulation 

Decumulation 
options: 

Lump-sum or annuity, or 
combination of lump sum and 
annuity  
No mandatory or default 
options 

Tax treatment:  Exempt 

Early out-
payments: 

Yes 

Tax treatment:  Exempt 

Switching 

Domestic:  No tax impact 
Cross-border:  No tax impact 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Main distribution path:  Bancassurance and broker agents are the most representative 

channels in Portugal  

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

Yes  

Possibility of changing level of in-
payments: 

Yes 

In-payments 

Investment options 

Information not available  

Mitigation of investment risk 

Information not available  

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Romania – Supplementary pension plan 

Country:  Romania 

Product: 

Supplementary Pension 
Plan 

Local name: 

Schema de pensii 
facultative – Pilon 3 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

  Excess contributions are subject to both 
social security contributions and income 
tax. 

Maximum amount 
that qualifies for 
tax relief: 

EUR 400, approximately 
RON 1,800 per employee per 
year. 

Yields 

Tax treatment:  Exempt 

. 

Decumulation 

Decumulation 
options: 

Lump sum, annuity 
No mandatory or default 
option 
Tax treatment:  Taxed 

  Pension income below RON 1,050 is tax-

free. Pension income above this 
threshold is taxed at the flat income tax 
rate of 16%. Health fund contributions 
(5.5%) are levied on pension income, but 
not on pension income which is less than 
RON 871.1. Furthermore, investment 
assets of supplementary pension funds 
are tax exempt until the actual payment 
to participants of the pension right. 
Yes, in limited situations 

Early out-
payments: 

Tax treatment:  Taxed 

Switching 

Domestic:  No tax impact 
Cross-border:  No tax impact 

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General features 

Assets under management  €277.3m 

Main distribution path:  Marketing agents/broker agents 

Accumulation phase 

Age limit for start of decumulation:  The  right  to  receive  supplementary  pension  benefits  becomes 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

effective starting on the participant’s 60th birthday. 
No,  decumulation  age  is  provided  for  by  the  law.  The  right  to 
receive  supplementary  pension  benefits  becomes  effective 
starting  on  the  participant’s  60th  birthday,  and  participants 
may  not  request  the  payment  of  supplementary  pension 
before that age, unless he/she retires for disability reasons.  

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Slovak Republic – Supplementary pension plan 

Country:  Slovak Republic 

Product: 

Supplementary pension 
plan 

Local name:  Dôchodkového poistenia 

Overall tax 
regime: 

EEE 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

Maximum amount 
that qualifies for 
tax relief: 

The maximum tax allowance represents 
the amount of provably paid 
contributions to the supplementary 
pension scheme, up to a total of EUR 180. 

Yields 

Tax treatment:  Exempt 

  Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 

Lump sum or annuity or 
combination of lump sum and 
annuity or other (programmed 
withdrawals) 

Tax treatment:  Exempt 

Early out-
payments: 

Yes 

Tax treatment:  Exempt 

Switching 

Domestic:  Transfer not possible 
Cross-border:  Transfer not possible 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Assets under management  €1545.3m 

Main distribution path:  Banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  Generally 62 years old 

Possibility of choosing age at 
decumulation: 

No 

Possibility of changing level of in-
payments: 

Yes 

In-payments 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Study on the feasibility of a European Personal Pension Framework 

Slovenia – Voluntary supplementary pension insurance scheme 

Country:  Slovenia 

Product: 

Local name: 

Voluntary supplementary 
pension insurance scheme  
Prostovoljno dodatno 
pokojninsko zavarovanje 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially Exempt (reduced tax 

base) 

  The annual tax base of a resident may be 
reduced by the amount of premiums for 
voluntary supplementary pension insurance 
paid by the person him- or herself, up to a 
maximum amount equal to 24% of mandatory 
contributions for pension and disability 
insurance for the insured, or 5.844% of the 
pension of the insured, and not more than 
EUR 2,819.09 annually. This maximum also 
includes premiums paid by the employee to 
individual pension schemes, with the employer 
having priority for tax relief. 
In-payments made by legal entities qualify as 
income. However, the payments are exempt 
from taxation. 

Maximum 
amount that 
qualifies for 
tax relief: 

Yes, EUR 2,819.09 per year. 

Yields 

Tax treatment:  Exempt 

Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 

Lump-sum, annuity 
No mandatory or default option 

Tax treatment: 

Taxed 

  Lump sums are taxed at a progressive rate 

ranging from 16% to 50%. 
Annuities are taxed at progressive rate 
ranging from 16% to 50%. However, only 50 
% of income is included in the tax base. 

Early out-payments:  Yes, in limited situations (lump 

sum) 

Tax treatment  Taxed (same taxation) 

Switching 

Domestic:  No tax impact 

Cross-border: 

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No tax impact 

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Study on the feasibility of a European Personal Pension Framework 

General features 

Assets under management  €2,008m 

Main distribution path:  Online 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  58 years old 

Possibility of choosing age at 
decumulation: 

Yes. However, the  minimal requirements to be  entitled to tax 
incentives (including age) are prescribed by the law.  

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Limitations on investment options: 

Individuals  usually  have  three  investment  options  (defensive, 
aggressive and balanced). 

Default option:  Default investment options vary between providers (e.g. 70% 
bonds,  30%  equity;  85%  equity,  10%  bonds,  5%  money 
market; 90% bonds, 5% equity, 5% money market). 

Mitigation of investment risk 

Strategy choice: 

Individuals  can  choose  between  a  defensive,  aggressive  and 
balanced investment strategy. 

Guarantee on minimum return:  Yes, 100% of in-payments for certain investment options. 

Advice 

Mandatory advice from distributors:  Yes 

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Spain 

Insured pension plan 

Country:  Spain 

Product: 

Local name: 

Insured pension plans 
PPA (Planes de Previsión 
Asegurados) 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

No 

Complimentary 
in-payments 
from employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially exempt (reduced tax 

rate) 

Maximum amount 
that qualifies for 
tax relief: 

The limit mainly relates to the 
policyholder’s income: 30% of the 
aggregate amount of labour income and 
income from economic activities. 
The limit is the lesser of (i) 30% of the 
aggregate amount of labour income and 
income from economic activities, and (ii) 
EUR 8,000 per year. These annual 
financial limits on contributions may not 
be exceeded. 

Yields 

Tax treatment:  Exempt 

  Conditions to qualify for exemption: No 
Decumulation 

Decumulation 
options: 

Lump sum, annuity or 
combination of lump sum and 
annuity 
No mandatory or default 
options 

Tax treatment:  Taxed 

There is no special tax treatment for 
pension income, but taxpayers aged over 
65 generally have a larger exempt 
income (personal taxpayer’s minimum 
allowance). The base amount is 
EUR 5,550 per taxpayer. Taxpayers aged 
over 65 may add EUR 1,150 to that 
amount. Those aged over 75 may claim 
an additional EUR 1,400. 

Early out-
payments: 

Yes 

Tax treatment:  Taxed in the same conditions 

Switching 

Domestic:  No tax impact 

In general terms, in Spain there are no 
barriers for transferring savings 
between providers. It is possible to 
switch pension plans between providers 
and products within the same system 
without tax costs. 

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Cross-border:  Transfer not possible 

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General features 

Assets under management  €12,106m 

Main distribution path:  Banks, insurance networks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

No 

Possibility of changing level of in-
payments: 

Yes 

In-payments 

Investment options 

Limitations on investment options:  Depends on provider 

Default option:  No 

Mitigation of investment risk 

Strategy choice:  Yes 

Guarantee on minimum return:  Yes 

Advice 

Mandatory advice from distributors:  No 

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Study on the feasibility of a European Personal Pension Framework 

Individual personal pension plan  

Country:  Spain 

Product: 

Local name: 

Individual personal 
pension plan 
Plan de Pensiones 
Individual 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

No 

Supplementary 
in-payments by 
employer: 

Yes 

In-payments 

Tax treatment:  Partially exempt (reduced 
tax base) 

Maximum amount 
that qualifies for 
tax relief: 

The limit mainly relates to the 
policyholder income: 30% of the 
aggregate amount of labour income 
and income from economic activities. 
The limit is the lesser of (i) 30% of the 
aggregate amount of labour income 
and income from economic activities, 
and (ii) EUR 8,000 per year. These 
annual financial limits on contributions 
may not be exceeded. 

Yields 

Tax treatment:  Exempt 

  Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 

Lump sum, annuity or 
combination of lump sum 
and annuity 
No mandatory or default 
options 

Tax treatment:  Taxed 

There is no special tax treatment for 
pension income, but taxpayers aged 
over 65 generally have larger exempt 
income (personal taxpayer’s minimum 
allowance). The base amount is 
EUR 5,550 per taxpayer. Taxpayers 
aged over 65 may add EUR 1,150 to 
that amount. Those aged over 75 may 
claim an additional EUR 1,400. 

Early out-
payments: 

Yes 

Tax treatment:  Taxed, in the same 

conditions. 

Switching 

Domestic:  No tax impact 

In general terms, in Spain there are no 
barriers for transferring savings 
between providers. It is possible to 
switch pension plans between 

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providers and products within the same 
system without tax costs. 

General features 

Cross-border:  Transfer not possible  

Assets under management  €68,327.8m 

Main distribution path:  Banks, insurance networks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

No 

Possibility of changing level of in-
payments: 

Yes  

In-payments 

Investment options 

Limitations on investment options:  Depends on provider 

Default option:  No 

Mitigation of investment risk 

Strategy choice:  The product allows the selection of more defensive strategies. 

Guarantee on minimum return:  Depends on provider 

Advice 

Mandatory advice from distributors:  No 

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Mutual pension provident entities 

Country:  Spain 

Product: 

Local name: 

Mutual pension provident 
entities  
Mutualidades de prevision 
social (mps) 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

No 

Supplementary 
in-payments by 
employer: 

Yes 

In-payments 

Tax treatment:  Partially exempt (reduced 
tax rate) 

Maximum amount 
that qualifies for 
tax relief: 

The limit mainly relates to the 
policyholder income: 30% of the 
aggregate amount of labour income 
and income from economic activities. 
The limit is the lesser of (i) 30% of the 
aggregate amount of labour income 
and income from economic activities, 
and (ii) EUR 8,000 per year. These 
annual financial limits on contributions 
may not be exceeded. 

Yields 

Tax treatment:  Exempt 

  Conditions to qualify for exemption: No 

Decumulation 

Decumulation 
options: 

Lump sum, annuity or 
combination of lump sum 
and annuity 
No mandatory or default 
options 

Tax treatment:  Taxed 

There is no special tax treatment for 
pension income, but taxpayers aged 
over 65 generally have a larger exempt 
income (personal taxpayer’s minimum 
allowance). The base amount is 
EUR 5,550 per taxpayer. Taxpayers 
aged over 65 may add EUR 1,150 to 
that amount. Those aged over 75 may 
claim an additional EUR 1,400. 

Early out-
payments: 

Yes 

Tax treatment:  Taxed in the same 

conditions. 

Switching 

Domestic:  No tax impact 

In general terms, in Spain there are no 
barriers for transferring savings 
between providers. It is possible to 
switch pension plans between 
providers and products within the same 
system without tax costs. 

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Cross-border:  Transfer not possible  

General features 

Assets under management  €6,581.4m 

Main distribution path:  Mutual insurance entities. 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  No 

Possibility of choosing age at 
decumulation: 

No 

Possibility of changing level of in-
payments: 

Yes 

In-payments 

Investment options 

Information not available 

Mitigation of investment risk 

Information not available 

Advice 

Information not available 

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Sweden 

In-payments 

Tax treatment:  Taxed 

  No tax incentive is applied. 

Country:  Sweden 

Product: 

Individual pension savings 

Maximum 
amount that 
qualifies for 
tax relief: 

Local name: 

IPS 

Overall tax 
regime: 

TTT 

Upcoming 
changes: 

None planned 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

Before 2016 individuals could 
deduct contributions of up to 
SEK 1,800 per year to IPS 
schemes.  
 

The government has announced that the 
deduction will be abolished in 2016, 
except for self-employed workers and 
those without employer contributions to 
their pensions.  
For these workers, the cap for individual 
contributions is 35% of eligible income 
or no more than 10 basic amounts (SEK 
445,000 in 2015) per year.  

 

  To be eligible for tax relief, benefits 

may not be withdrawn before the age of 
55, and payments must last for at least 
five years in the form of an annuity. 

Yields 

Tax treatment:  Taxed 

Decumulation 

Decumulation 
options: 
Tax treatment:  Taxed 

Annuity, Mandatory option 

Early out-
payments: 
Tax treatment:  Na 

No 

Switching 

Domestic:  No tax impact 
Cross-border:  No tax impact 

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General features 

Assets under management  €12,702m 

Main distribution path:  Banks 

Accumulation phase 

Timeframe for the accumulation of funds 

Age limit for start of decumulation:  55  

Possibility of choosing age at 
decumulation: 

No, the pay-out period is regulated between 5-15 years. 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Investment options 

Limitations on investment options:  Pension  savers  can  invest  in  mutual  funds,  equities,  fixed 

income or bank accounts. 

Default option: 

Information not available 

Mitigation of investment risk 

Strategy choice:  Yes 

Pension  savers  can  invest  in  mutual  funds,  on  account  or  in 
individual securities 

Guarantee on minimum return:  No 

Advice 

Mandatory advice from distributors:  No 

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United Kingdom 

Self-invested personal pensions

Country:  United Kingdom 

Product: 

Self-invested personal 
pensions 

Local name:  SIPPs 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

None planned 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

In-payments 

Tax treatment:  Partially Exempt (tax 

Maximum amount 
that qualifies for 
tax relief: 

reduction) 
Individuals pay income tax on their 
earnings before any pension contribution, 
but the pension provider claims tax back 
from the government at the basic rate of 
20%. Individuals paying tax at higher rate 
(40%) can claim the difference through 
their tax return 

The maximum qualifying for tax relief is 
100% of the individual’s annual income or, 
if the individual has income of less than 
GBP 3,600, the limit is GBP 3,600. Pension 
inputs i.e. contributions by individual and 
another party e.g. employer, exceeding the 
individual’s annual allowance (currently 
GBP 40,000, but reduced if income exceeds 
GBP 150,000) will be subject to a tax 
charge. The annual allowance has been 
falling over recent years. There is also a 
lifetime allowance to consider. Unused 
annual allowances for prior years may be 
carried forward. 

Yields 

Tax treatment:  Exempt 

Decumulation 

Decumulation 
options: 

Annuity or lump sum or 
combination of lump sum and 
annuity  
No mandatory or default option 

Tax treatment:  Taxed 

Early out-
payments: 

Yes 

Tax treatment:  Taxed 

Switching 

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Domestic:  No tax impact 

Cross-border:  No tax impact 

Main distribution path:  Banks and others (building societies…) 

General features 

Age limit for start of decumulation:  Yes  –  after  55  years  old,  for  a  personal,  occupational  or 

Accumulation phase 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

stakeholder pension. 
Yes 

In-payments 

Possibility of changing level of in-
payments: 

Yes 

Limitations on investment options: 

Investment options 

Investment options depend on the policy and holder choice. 
Examples of investment options: 
(1) allocation to stocks and shares. 
(2) allocation to investment trusts listed on any stock 
exchange.   
(3) allocation to UK government bonds, plus bonds issued by 
foreign governments.       
(4) allocation to open ended investment companies which are 
recognized by the Financial Conduct Authorit.                                                                                    
(5) allocation to gilts and bonds.                                                                                    
(6) allocation to commercial property                                                                        
(7) allocation to real estate investment trusts listed on any 
stock exchange.                 
(8) allocation to offshore funds.                                                                                  
(9) allocation to exchange traded fund traded on the London 
Stock Exchange or other European markets. 

Default option:  There is no generic default investment option for this product. 

Mitigation of investment risk 

Strategy choice:  Depending  on  the  policy,  the  holder  can  choose  to  invest  the 
accumulated capital in whatever investments are offered (e.g. 
stocks, bonds, gilts and etc.) in any combination 

Guarantee on minimum return:  No 

Advice 

Information not available 

June 2017 154 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stakeholder pensions 

Country:  United Kingdom 

Product:  Stakeholder pensions 
Local name:  Stakeholder pensions 

Overall tax 
regime: 

EET 

Upcoming 
changes: 

Yes 
The UK Government 
consulted in 2015 on 
proposals to completely 
change the basis of tax 
relief on pensions, moving 
to a TEE model. No 
changes were made, but 
new ideas are being 
proposed by providers and 
the government which 
could radically change tax 
relief and pensions. 

Supplementary 
in-payments by 
employer: 

Yes 

Comments: 

Foreign providers are 
allowed to sell the 
product. 

Study on the feasibility of a European Personal Pension Framework 
Study on the feasibility of a European Personal Pension Framework 

In-payments 

Tax treatment:  Partially Exempt (tax reduction) 

Maximum 
amount that 
qualifies for tax 
relief: 

Individuals pay income tax on their 
earnings before any pension 
contribution, but the pension provider 
claims tax back from the government at 
the basic rate of 20%. Individuals 
paying tax at higher rate (40%) can 
claim the difference through their tax 
return. 

The maximum qualifying for tax relief is 
100% of the individual’s annual income or, if 
the individual has income of less than GBP 
3,600, the limit is GBP 3,600. Pension inputs 
i.e. contributions by individual and another 
party e.g. employer, exceeding the 
individual’s annual allowance (currently GBP 
40,000, but reduced if income exceeds GBP 
150,000) will be subject to a tax charge. The 
annual allowance has been falling over 
recent years. There is also a lifetime 
allowance to consider. Unused annual 
allowances for prior years may be carried 
forward. 

Yields 

Tax treatment:  Exempt 

Decumulation 

Decumulation 
options: 

Annuity or lump sum 
No mandatory or default options 

Tax treatment:  Taxed  

Early out-
payments: 

Yes 

Tax treatment:  Taxed 

Switching 

Domestic:  No tax impact 
Cross-border:  No tax impact 

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General features 

Main distribution path:  Banks and others (building societies, etc.) 

Accumulation phase 

Age limit for start of decumulation:  After 55 years old, for a personal, occupational or stakeholder 

Timeframe for the accumulation of funds 

Possibility of choosing age at 
decumulation: 

pension. 
Yes 

Possibility of changing level of in-
payments: 

Yes 

In-payments 

Investment options 

Limitations on investment options: 

Investment  options  vary  with  provider  and  depend  on  holder 
choice. Normally investments correspond to shares and stocks. 

Default option:  There is no generic default investment option for this product. 

Mitigation of investment risk 

Strategy choice:  Depending on the provider and the policy terms, the holder can 

choose a defensive or aggressive investment strategy.  

Advice 

Mandatory advice from distributors:  Yes,  providers  have  to  inform  and  advise  their  clients  as 

required by the law 

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Tax regime presentation and analysis (4) 
Tax regime presentation 

Figure 15: Tax regime model 

Tax regimes 

Accumulation 

In-payments 

Yields 

Decumulation  at  the 
time of retirement 

Tax  regime  1  –  Incentives 
applied    on  in-payments  and 
on decumulation phases 

Tax  regime  2  –  Incentives 
focused on in-payments 

Tax  regime  3  –  Incentives 
focused  on  the  decumulation 
phase 

Tax  regime  4  –  No  incentive 
neither on in-payments nor on 
decumulation 

E 

E 

E 

E 

T 

T 

T 

T 

E 

T 

E 

T 

T 

E 

T 

E 

E 

E 

T 

T 

E 

E 

T 

T 

Four  different  types  of  tax  regimes  have  been  identified  to  clarify  the  taxation 
applicable to in-payments and out-payments (excluding early out-payments).  

In  each  type  of  tax  regime,  yield  may  be  subject  to  taxation  for  certain  products 
(Figure  7).  Only  twelve  products  out  of  the  forty-nine  in  six  Member  States  are 
subject to taxation on yield from a pension saver standpoint. Tax regimes concerning 
yield  correspond  to  several  types  of  tax  treatment  of  income  (dividends,  interests, 
capital gains). These tax regimes are not specific to a given PPP but follow the general 
taxation rules of different Member States.  

After  analysis,  yield  taxation  does  not  appear  to  be  an  impacting  factor  in  the  tax 
regime model. Indeed, there is no clear correlation between yield taxation versus the 
taxation  of  in-payments  and  out-payments.  On  the  contrary,  considering  the  yield 
taxation  to  be  a  significant  factor  would  involve  taking  account  of  a  large  number  of 
tax  regime  types  and  would  thus  weaken  the  effectiveness  of  the  analysis.  Last,  in 
most  of  the  cases,  the  taxation  of  yield  at  the  level  of  the  pension  saver  is  distinct 
from  the  taxation  of  yield  at  the  level  of  provider.  In  other  words,  when  the  yield  is 
taxed at the level of the provider it is not taxed at the level of the  pension saver. At 
the  end  of  the  day,  we  have  disqualified  the  yield  taxation  factor  for  tax  regime 
classification purposes.  

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Tax  regime  1  corresponds  to  a  group  of  products  benefiting  from  incentives  on  in-
payments  and  on  the  decumulation  phase.  This  tax  regime  type  comprises  14 
products in ten Member States.  

-  These products benefit from incentives at the time of the accumulation: 

o 

In-payments are subject to tax incentives (tax credit, reduced tax base, 
in-payments  benefit  from  financial  incentives 
tax  reduction),  or 
(complementation by the State or by the employer) that are tax exempt 

-  At least one of the decumulation options is tax exempt. 

Tax  regime  2  corresponds  to  a  group  of  products  benefiting  from  incentives  on  in-
payments: 

- 

In-payments  are  subject  to  tax  incentives,  i.e.,  tax  credit,  reduced  tax  base, 
tax  reduction,  or  to  financial  incentives,  i.e.,  supplementation  by  the  State  or 
by the employer that is tax exempt. 

Tax  regime  2  differs  from  tax  regime  1  regarding  the  aspects  applicable  to  the 
decumulation  phase:  all  the  decumulation  options  are  taxed,  with  or  without 
application  of  a  preferential  regime.  This  tax  regime  comprises  28  products  in  17 
Member States. 

Tax regime 3 corresponds to a group of products benefiting from tax exemption only 
on at least one decumulation option. This tax regime type  comprises four products in 
three Member States.  

Tax  regime  4  corresponds  to  a  group  of  products  which  do  not  benefit  from  any 
incentive  on  the  in-payments  and  for  which  all  the  decumulation  options  are  taxed, 
with or without application of a preferential regime. This type of tax regime comprises 
three products within three Member States.  

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Tax regimes 

Accumulation 

In-
payments 

Yield 

Decumulation 
at  the  time  
of retirement 

PPPs 

Colour code 

Tax regime 1 
–  Incentives 
applied    on 
in-payments 
and 
on 
decumulation 
phases 

E 

E 

E 

E 

T 

E 

E 

E 

T 

Tax regime 2 
–  Incentives 
on 
focused 
in-payments 

E 

T 

T 

Bulgaria_UVPF        
Bulgaria_PVPF        
Czech 
Republic_SSP   
Estonia_VSF          
Hungary_PRS          
Lithuania_VF         
Slovak 
Republic_PPF 

Green 

Cyprus_IIP           
Netherlands_RBSA     
Netherlands_RAInsA   
Netherlands_RAInsD   
Austria_PZV 
Portugal_LifeInsH 
Portugal_PF                 

Black 

France_MadelinTNS      
France_MadelinAgr      
Belgium_LP             
Belgium_PP             
Croatia_OPF            
Finland_IP             
France_PERP            
Germany_Rürup          
Ireland_RAC            
Ireland_PRSA           
Latvia_PPF             
Luxembourg_IPS         
Malta_PPPa             
Poland_IKZE            

Romania_SPP            
Slovenia_VSP           
Spain_IPP              
Spain_MP               
Spain_PPA              
United 
Kingdom_SIPP   
United 
Kingdom_Stakeh 
Portugal_LifeInsR      
Portugal_PPR  
Denmark_Alder      
Denmark_RP         
Germany_Riester    
Italy_PIP          
Italy_OPF          

T 

T 

T 

T 

Tax regime 3 
–  Incentives 
focused 
on 
the 
decumulation 
phase 

Tax regime 4 
– 
No 
incentive 
either  on  in-
payments  or 
on 
decumulation 

T 

E 

T 

E 

E 

E 

T 

T 

Denmark_Aldersop  
Greece_PRSP   
Poland_IKE     
Poland_PPE            

Germany_PP  
Malta_PPPna  
Sweden_IPS   

Red 

Blue 

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Tax regime analysis 

Figure  16:  Proportion  of  PPPs  benefiting  from  an  incentive  on  in-payments 
(tax regimes1 & 2) 

14% 

86% 

PPP benefiting from
incentive on in-payments

PPP with no incentive on
in-payments

According to the pie chart above, it should be noted that tax regime 1 and tax regime 
2 comprise 42 products (out of 49 in the scope of the study) representing 86% of the 
products in 26 Member States (out of 28 EU Member States).  

These two tax regimes share the common characteristic that in-payments benefit from 
an incentive, as mentioned above. 

As  regards  the  products  and  Member  States  covered,  it  is  clear  that  preferential 
regimes mostly apply on in-payments, irrespective of whether yield and decumulation 
phases are subject to taxation.  

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Classification trees of tax regime 1  

Figure  17:  Categorisation  of  PPPs  in  tax  regime  1  given  the  taxation  on  in-
payments 

It should be noted that the most common tax  incentive applicable is the reduced tax 
base with 11 PPPs concerned in eight Member States on 14 products. 

Regarding  the  limitations  applying  to  the  tax  incentive,  no  common  characteristic  is 
identified.  

Figure 18: Categorisation  of PPPs  in tax  regime 1 given the taxation on out-
payments  

June 2017 161 

Cluster 1 -Accumulation tax regimeTaxedReduced tax basePartiallyexemptTax reductionTax creditReduced tax basePartially exempt/taxedOtherNetherlands_RAInsDNetherlands_RBSANetherlands_RAInsA3Income limitation00Income limitation and maximum amountMaximum amount1Hungary_PRSAustria_PZV13Portugal_PF Cyprus_IIPEstonia_VSFIncome limitation and maximum amount0No limitation3Bulgaria_UVPF      Bulgaria_PVPFLithuania_VFIncome limitationMaximum amountCzech Republic_SSPSlovak Republic_PPF2Portugal_LifeInsH1Maximum amountCluster 1 -Decumulation taxregimeMandatoryunique option for outpayments(annuities)TaxedTaxed or exemptNo mandatory unique option for outpaymentsWith default optionWithout default optionTaxedExemptDepends on decumulation optionTaxed0Netherlands_RAInsANetherlands_RAInsDNetherlands_RBSA300Austria_PZVCyprus_IIP2Bulgaria_UVPFBulgaria_PVPFCzech Republic_SSPEstonia_VSFHungary_PRSLithuania_VFSlovak Republic_PPFPortugal_LifeInsHPortugal_PF9 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

It should be noted that nine products in seven Member States out of 14 are exempt, 
irrespective of the decumulation options. Two products in two Member States may be 
taxed or exempt at the time of the decumulation depending on the options chosen by 
the pension saver. 

Classification trees of tax regime 2  

Figure  19:  Categorisation  of  PPPs  in  tax  regime  2  given  the  taxation  on  in-
payments  

It should be noted that the most common tax  incentive applicable is the reduced tax 
base with 21 PPPs concerned in fifteen Member States on 28 products. 

As regards the limitations applying to all the tax incentives, the most common is the 
limitation  on  amount  (either  combined  or  not  combined  with  a  limitation  on  income) 
with  25  PPPs  in  16  Member  States  concerned  on  28  products.  19  products  in  13 
Member States on 21 products are concerned when a reduced tax base applies. 

June 2017 162 

Cluster 2 -Accumulation tax regimeTaxedReduced tax basePartiallyexemptTax reductionTax creditReduced tax basePartially exempt/taxedOther0Income limitation0United Kingdom_SIPP   United Kingdom_Stakeh2Income limitation and maximum amountMaximum amount3Belgium_PP Belgium_LPGermany_RiesterCroatia_OPF (max amount)19Ireland_PRSA Ireland_RAC Portugal_PPRSpain_IPP  Spain_MP           Spain_PPAFrance_MadelinTNS   France_MadelinAgrFrance_PERPIncome limitation and maximum amount1Denmark_AlderNo limitation1Latvia_PPF Income limitationMaximum amountDenmark_RPFinland_IPGermany_RürupItaly_PIP           Italy_OPF Luxembourg_IPSPoland_IKZEPortugal_LifeInsR Romania_SPPSlovenia_VSP 10Malta_PPPa1Maximum amount 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Figure 20: Categorisation  of PPPs  in tax  regime 2 given the taxation on out-
payments  

It should be noted that in tax regime 2, all the options are taxed. 
Only  five  products  in  four  Member  States  out  of  29  products  have  a  unique  out-
payment  option,  in  annuities,  whereas  the  24  others  in  18  Member  States  allow 
pension savers to choose between different options: annuities, lump sum, combination 
of lump sum and annuities or other options. 

Figure 21: Proportion of decumulation option possibilities 

25% 

31% 

44% 

Annuities

Lump sum

Combination of lump sum
and annuities

The most commonly proposed decumulation option is annuities. The payout option by 
lump sum is also well represented.  

June 2017 163 

Cluster 2 -Decumulation taxregimeMandatoryunique option for outpayments(annuities)TaxedTaxed or exemptNo mandatory unique option for outpaymentsWith default optionWithout default optionTaxedExemptDepends on decumulation optionTaxedFrance_MadelinTNSFrance_MadelinAgrDenmark_RPFinland_IPGermany_Rürup50Belgium_PPCroatia_OPFDenmark_AlderFrance_PERPMalta_PPPa5Belgium_LPGermany_RiesterIreland_RACIreland_PRSAItaly_PIPItaly_OPFLatvia_PPFLuxembourg_IPSPoland_IKZEPortugal_LifeInsRPortugal_PPRRomania_SPPSlovenia_VSPSpain_IPPSpain_MPSpain_PPAUnited Kingdom_SIPPUnited Kingdom_Stakeh1900 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Classification trees of tax regime 3  

Figure  22:  Categorisation  of  PPPs  in  tax  regime  3  given  the  taxation  out-
payments  

All the products in three Member States in this tax regime do not have a tax incentive 
on  the  in-payments,  whereas  a  complete  exemption  regime  applies  on  all  the 
decumulation options.  

It should be noted that for these four products, pension savers have a complete choice 
of the decumulation option and that the out-payments are always tax exempt. 

Classification trees of tax regime 4  

Figure 23: Categorisation  of PPPs  in tax  regime 4 given the taxation on out-
payments  

All  the  products  in  three  Member  States  in  this  tax  regime  have  no  tax  incentive  on 
the in-payments and are taxed  on the decumulation phase.  The heterogeneity of the 
characteristics of the out-payment options are noteworthy 

June 2017 164 

Cluster 3 -Decumulation taxregimeMandatoryunique option for outpayments(annuities)TaxedTaxed or exemptNo mandatory unique option for outpaymentsWith default optionWithout default optionTaxedExemptDepends on decumulation optionTaxed00000Denmark_AldersopGreece_PRSPPoland_IKEPoland_PPE4Cluster 4 -Decumulation taxregimeMandatoryunique option for outpayments(annuities)TaxedTaxed or exemptNo mandatory unique option for outpaymentsWith default optionWithout default optionTaxedExemptDepends on decumulation optionTaxedSweden_IPS10Malta_PPPna1Germany_PP100 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Clustering analyses based on product feature requirements 
Four clustering analyses were performed. 

Clustering  A:  The  aim  of  the  Clustering  A  attempt  was  to  identify  products  with  the 
same  features  allowing  them  to  benefit  from  the  tax  incentives.  However,  as  the 
product features are so diverse, this resulted in the absence of any cluster.  

Clustering  B:  This  clustering  analysis  was  performed  based  on  17  answers  out  of  20 
questions  selected  and  gives  the  most  interesting  results.  This  resulted  in  a  Cluster1 
gathering 14 PPPs with 100% common feature requirements allowing them to benefit 
from a tax incentive. 

The two other clustering C and D analyses did not give any relevant results: 

-  Results  of  Clustering  C  based  on  a  hierarchical  clustering  approach  are  highly 

heterogeneous; 

-  Results of Clustering D are based on the decumulation options allowed and are 

very similar to results obtained in Clustering B 

Summary of the clustering analyses performed 

Table 7: Overview of the clustering analysis results 
“MS” means Member States 
Clustering 
Clustering A 

Results 
No  cluster  identified  because  of  the  heterogeneity  of  answers 
obtained 

Clustering B 

Methodology 
Clustering based on 
20 
feature 
requirements 
Clustering based on 
17 
feature 
– 
requirements 
concentric approach 

Clustering C 

Clustering D 

Clustering based on 
feature 
19 
– 
requirements 
hierarchical 
clustering approach 
Clustering based on 
17 
feature 
requirements within 
groups identified on 
the 
of 
basis 
decumulation 
options – concentric 
approach  

A  cluster  of  14  PPPs  in  11  MS  was  identified  (hereafter 
‘Cluster1B’).  These  14  PPPs  in  11  MS  have  the  same  answers  to 
the 17 questions selected.  
Then,  for  the  other  28  PPPs,  the  answers  that  differed  from 
Cluster1B were determined. 

- 

- 

- 

- 

The  products  with  only  one  different  answer  are  94% 
similar to those in Cluster1B. 
The products with two different answers are 88% similar 
to those in Cluster1B. 
The  products  with  three  different  answers  are  82% 
similar to those in Cluster1B. 
The products with four different answers are 76% similar 
to those in Cluster1B 

Ten clusters were identified. However, in each cluster, significant 
differences  were  detected  and  four  clusters  are  only/mainly 
composed of PPPs in the same MS. 

Three  groups  were  identified  on  the  basis  of  the  decumulation 
options allowed: 

- 

- 

- 

Group1  gathering  PPPs  for  which  a  decumulation  by 
annuities is allowed; 
Group2  gathering  PPPs  for  which  both  lump  sum  and 
annuities decumulation options are allowed; 
Group3  gathering  PPPs  for  which  both  annuities  and  a 
combination  of  lump  sum  and  annuities  decumulation 
options are allowed. 

For  each  group,  the  methodology  of  Clustering  B  was  applied. 
Clustering D is not relevant as the result obtained is a variant of 
Clustering B.  

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NB:  For  all  the  clustering  analyses  performed,  PPPs  for  which  cross-border  selling  is 
not possible (based on the questionnaires) were not taken into account.  

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Clustering A based on all the feature requirements selected 

Assumptions 

Based on the tax questionnaire, DG FISMA selected several answers, corresponding to 
the  conditions  to  benefit  from  tax  incentives.  Thus,  the  answers  to  the  following 
questions were taken into account to determine the clustering: 

Table 8: Questions selected for clustering analysis purposes 

Topic 

Population targeted 
(0.I) 

Questions 

Is the product designed to target a limited population? 
(0.I.1) 

Main conditions for tax incentives 
1.III 

What  are  the  overall  conditions  for  tax  incentives  applicable  to 
personal pension products? 

Age limit 
1.VI 

 Yields taxes 
 1.VII 

Decumulation phase 
1.IX 

What are the age limits for the accumulation phase of the PPP? 
(1.VI.1)  
Is  a  minimum  number  of  years  to  retirement  a  condition  for  the 
purchase of the product?(1.VI.3)   
Are  there  any  other  features  /conditions/restrictions  required  to 
obtain  tax  relief  for  the  in-payments?  (Provide  a  detailed 
description)(1.VII.3) 
If  the  answer  to  question  (1.VII.3)  is  yes,  does  there  have  to  be 
an insurance element in the product?(1.VII.4) 
Is it possible to change the level of in-payments?(1.VII.11.a) 

Is it possible to take a break?(1.VII.11.b) 

If  you  answered  ‘exempt’  to  question  (1.VIII.1):  What  are  the 
conditions to qualify for exemption?(1.VIII.3) 

Is  there  an  age  limit  for  the start  of  the  decumulation  phase?  (If 
so, give the age limit).(1.IX.1) 
Are  individuals  able  to  choose  the  age  at  which  decumulation 
starts, or is it prescribed by tax or labour law?(1.IX.2) 
What are the options for decumulation?  
(Possible  options  for  decumulation  include:  lump  sums,  partial 
lump sums, annuities, annuities during a fixed period.) (1.IX.3) 

What conditions are attached to those options?  
(For each option, specify if they are mandatory or default options 
and describe them.) (1.IX.4) 

Is  it  possible  to redeem  funds  before  the pension  age  (early out-
payments)(1.IX.6) 

2.  Social  security, 
contract 
applicable to the PPP 

law 

labour  and 
requirements 

3.Other 
applicable to the PPP 

legal 

requirements 

4.Requirements  applicable  to  the 
providers of the PPP 

labour  and  contract 

there  any  social  security, 

Are 
requirements applicable to the PPP? (If so, describe them.)(2.1) 
Is  having  the  nationality  of  the  relevant  Member  State  or  a 
physical  address  in  the  Member  State  a  requirement  to  buy  the 
product? (2.4) 
Does the personal pension product cover disability allowance?  
(Comment to what extent and if it is mandatory) (2.5) 

law 

Are  there  any  other  conditions  to  benefit  from  preferential  tax 
treatment, not yet mentioned above? (If so, describe them). (3.1) 
What  are  the  specific  contract  and  insurance  law  requirements 
applicable to the PPP?(3.2) 
Are  providers  from  other  Member  States/EEA  allowed  to  sell  the 
PPP? (4.3)  
If you answered yes to question 4.3:  
What  are  the  requirements  for  foreign  providers  from  Member 
States/EEA to sell the PPP? (4.4) 

The  table  below  presents  an  overview  of  the  many  diverse  coded  answers  obtained 
and the absence of relevant clusters of PPPs with the same features in order to benefit 

June 2017 167 

 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

from  a  specific  tax  incentive.  The  aim  of  this  clustering  attempt  was  to  identify 
products  with  the  same  features  allowing  them  to  benefit  from  the  tax  incentives. 
Indeed, the EU law principle of national treatment prescribes that if a product A sold in 
MS 1 has the same conditions as a product B sold in MS 2, the product A could benefit 
from the same tax treatment in MS 2, if the supervisory regime is the same. 

As a consequence, the products whose sale is not allowed in a country other than the 
country of origin, were not considered for the clustering.  

June 2017 168 

 
 
Study on the feasibility of a European Personal Pension Framework 

Results of Clustering A 

PPP code 

Table 9: Results of Clustering A 
A 
1.VI.
15 

A 
1.VII.
37 

A 
0.I.
14 

A 
1. 
VI.
36 

A 
1.VII.
48 

A 
1.VII.11
.a9 

A 
1.VII.11.
b10 

A 
1.VIII.
311 

A 
1.IX.
112 

A 
1.IX.
213 

A 
1.IX.
314 

A1.IX.
415 

A 
1.IX.
616 

A 
2.1
17 

A 
2.4
18 

A 
2.5
19 

Austria 

A 

Y 

N 

N 

NA 

Y 

Belgium_LP 

Blegium_PP 

Bulgaria_UVPF 

Bulgaria_PVPF 

Croatia_OPF 

Cyprus_IIP 

Denmark_Alder 

A 

A 

A 

A 

A 

A 

A 

Y 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

MD 

MD 

FC 

FC 

N 

N 

N 

N 

N 

Y 

Y 

N 

na 

na 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

N 

na 

N 

Y 

LS, A  NMDO 

Y 

N 

N 

N 

N 

60 

64.4 

60 

50 

N 

60 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

LS, A  NMDO 

LS, A  DO 

Y 

Y 

LS, A  NMDO 

YLS 

LS, O  NMDO 

YLS 

LS, A, 
C 

DO 

LS, A  NMDO 

LS, A  DO 

N 

Y 

Y 

N 

N 

FR 

FR 

N 

N 

N  

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

O 

N 

O 

O 

A 
3.1
20 

MD
, 
CG 

N 

N 

N 

N 

N 

N 

N 

A 
3.2
21 

A 
4.4
22 

N 

SR 

N 

N 

N 

N 

SR 

SR 

SR 

SR 

na 

PE 

na 

SR 

N 

N 

4 A for all, L for limited, OL for other limitation 
5 N for no, Y for yes 
6 N for no, Y for yes 
7 FC for formal conditions, MA for minimal amount of in-payments, OC for out-payment conditions, MD for minimum detention/holding period 
8 N for no, Y for yes, na for not applicable 
9 N for no, Y for yes 
10 N for no, Y for yes 
11 N for no, Y for yes, na for not applicable, EL for exemption limited to one contract 
12 Age indicated, N for no age limit 
13 N for no, Y for yes 
14 LS for lump sums, A for annuities, C for combination of lump sums and annuities, OO for other options 
15 NMDO for no mandatory or default option, MO for mandatory option, DO for default option 
16 Y for yes, YLS for yes in limited situations, N for no 
17 FR for formal requirements, EP for no earlier participation, POE for period of employment N for no 
18 N for no, Y for yes 
19 N for no, Y for yes, O for optional 
20 N for no, Y for yes, MD for minimum detention period, CG for capital guaranteed  
21 N for no, Y for yes, na for not applicable, SC for social security contributions have to be paid, NA for not available 
22  N  for  no,  SR  for  same  requirements,  LR  for  lightened  requirements,  SI  for  specific  information  to  the  foreign  supervisory  authority,  PE  for  permanent 
establishment, NA for not available 

June 2017 169 

 
 
                                           
Denmark_RP 

Denmark_Alderso
p 

Estonia_VSF 

Finland_IP 

France_MadelinTN
S 

France_MadelinAg
r 

France_PERP 

Germany_Riester 

A 

A 

A 

A 

L 

L 

A 

L 

Germany_Rürup 

A  

Germany_PP 

Greece_PRSP 

Ireland_RAC 

Italy_PIP 

Italy_OPF 

Latvia_PPF 

Lithuania_VF 

A 

A 

L 

A  

A  

A 

A 

Luxembourg_IPS 

A 

Malta_PPPa 

Malta_PPPna 

A 

A 

N 

N 

N 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

N 

N 

N 

N 

N 

na 

na 

na 

N 

N 

na 

N 

N 

N 

N 

na 

na 

N 

N 

na 

N 

N 

N 

N 

N 

N 

FC, 
MA 

N 

N 

N 

na 

N 

na 

na 

na 

N 

N 

na 

Y 

N 

N 

N 

N 

N 

N 

N 

na 

na 

na 

na 

N 

N 

na 

N 

N 

na 

N 

na 

na 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

N 

Y 

Y 

Y 

Y 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

na 

na 

N 

N 

N 

N 

N 

na 

N 

N 

na 

N 

na 

na 

N 

N 

N 

N 

N 

60 

60 

N 

68 

62 

62 

62  

62 

62 

N 

67 

60  to 
75 

N 

N 

55 

55 

60  to 
75 

50 

50 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Study on the feasibility of a European Personal Pension Framework 

A 

M 

LS, A  NMDO 

Y 

Y 

N  

N  

N 

N 

O 

O 

N 

N 

na 

N 

N 

N 

LS, A, 
C 

A 

A 

A 

NMDO 

Y 

N 

N 

Y 

N 

N 

SR 

M 

M 

M 

YLS 

YLS 

N 

N 

N 

N 

N 

N 

N 

N 

NA 

SR 

SC 

SR 

YLS 

N 

N 

N 

N 

SC 

SR 

LS, A, 
C 

A,  C, 
OO 

A, C23  DO 

YLS 

A,  C, 
O 

NMDO 

Y 

A 

M 

LS, A  NMDO 

NMDO 

N 

Y 

Y 

N 

na 

N 

N  

N 

N 

N 

N 

N 

N 

O 

O 

O 

O 

na 

N  

na 

SR 

N 

N 

N 

N 

N 

N 

N 

N 

N 

SR 

na 

SR 

NMDO 

YLS 

N 

N 

N 

N 

na 

SR 

A, C 

NMDO 

YLS 

A, C 

NMDO 

YLS 

LS, A  NMDO 

YLS 

LS, A, 
C 

NMDO 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

Y 

N 

Y 

N 

N 

N 

N 

na 

na 

na 

N 

SR 

N 

LR 

SR 

A, C 

NMDO 

Y 

N 

N 

O 

N 

na 

SR 

LS, A, 
C 

LS, A, 
C 

DO 

DO 

N 

Y 

N 

Y 

O 

N 

N  

SR 

N 

N 

O 

N 

N  

SR 

23  For  clustering  reasons,  the  decumulation  option  by  lump  sum  (mandatory  if  the  amount  accumulated is less  than  €40)  has  not 
been taken into account 

June 2017 170 

 
                                           
Netherlands_RBSA  A 

Y 

N 

OC 

N 

Y 

Netherlands_RAIn
sA 

Netherlands_RAIn
sD 

A 

Y 

N 

OC 

Y 

Y 

A 

Y 

N 

OC 

N 

Y 

Poland_IKE 

Poland_PPE 

Poland_IKZE 

A 

L 

A 

Portugal_LifeInsR 

OL 

N 

Y 

N 

N 

Portugal_LifeInsH  OL 

N 

Portugal_PF 

Romania_SPP 

Slovenia_VSP 

Spain_PPA 

Sweden_IPS 

United 
Kingdom_SIPP 

United 
Kingdom_Stakeh 

A 

A 

A 

A 

A 

A 

A 

N 

y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

na 

na 

N 

N 

OC, 
MD 

na 

na 

na 

na 

Y 

N 

OC 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

na 

N 

na 

na 

na 

na 

na 

N 

N 

na 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

N 

N 

EL 

na 

EL 

na 

na 

65 
and  3 
m 

65 
and  3 
m 

65 
and  3 
m 

60 

60 

65 

55 

66 
and  2 
m 

na 

60 

N 

N 

N 

na 

N 

N 

60 

58 

N 

55 

55 

55 

Y 

Y 

Y 

N 

N 

N 

Y 

Y 

Y 

N 

Y 

N 

N 

Y 

Y 

Study on the feasibility of a European Personal Pension Framework 

A 

M 

N 

N 

N 

N 

N 

N 

N 

A 

M 

N 

N 

N 

N 

N 

N 

N 

A 

M 

N 

N 

N 

N 

N 

N 

N 

LS, A  NMDO 

LS, A  NMDO 

LS, A  NMDO 

NMDO 

Y 

Y 

Y 

Y 

N 

PO
E, 
EP 

N 

N 

N 

N 

N 

N 

N 

N 

N 

O 

N 

N 

N 

N 

na 

na 

SR 

SI 

na 

SR 

N 

SR 

NMDO 

Y 

N 

N 

O 

N 

N 

SR 

NMDO  N 

N 

N 

Y 

N 

N 

SR 

LS, A, 
C 

LS, A, 
C 

LS, A, 
C 

LS, A  NMDO 

YLS 

LS, A  NMDO 

YLS 

LS, A, 
C 

NMDO 

Y 

A 

M 

LS, A, 
C 

NMDO 

N 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

Y 

O 

N 

O 

N 

N 

N 

N 

N 

na 

na 

N 

na 

na 

N 

SR 

NA 

SR 

SR 

LS, A  NMDO 

Y 

N 

Y 

O 

N 

na 

SR 

June 2017 171 

 
 
Study on the feasibility of a European Personal Pension Framework 

Clustering B based on 17 out of 20 feature requirements 

Assumptions 

Following the attempt above, we performed another clustering analysis based on 17 out 
of 20 answers selected. The answers to the three questions listed below were not taken 
into account:  

-  What are the age limits for the accumulation phase of the PPP? 

o  The answers to this question were not taken into account because of their 
non-restrictive character. Indeed, if limitations exist they correspond to an 
old age which cannot be considered as a restriction. 

- 

Is there an age limit for the start of the decumulation phase? (If so, give the age 
limit). 

o  The answers to this question were not taken into account as they are too 

diverse to allow a clustering analysis to be performed. 

-  What  conditions  are  attached  to  those  options?  (For  each  option,  specify  if  they 

are mandatory or DOs and describe them.) 

o  The  answers  to  this  question  were  not  taken  into  account.  The  clustering 
analysis was performed by considering that products could be included in a 
same  cluster  if  they  have  at  least  one  of  their  decumulation  options  in 
common. All the products analysed have the annuities decumulation option 
in  common  except  for  Bulgaria_PVPF  and  the  only  decumulation  option 
that could be mandatory is annuities.  

Clustering B is based on 85% of the questions selected for clustering A. 

Similarly  to  clustering  A,  the  products  whose  the  sale  is  not  allowed  in  a  country  other 
than the country of origin, have not been considered for the clustering. 

Results of Clustering B 

Based  on  the  answers  to  the  questions  selected,  a  cluster  of  14  PPPs  in  11  Member 
States  was  identified  (hereafter  ‘Cluster1B’).  These  14  PPPs  have  the  same  answers  to 
the 17 questions selected.  

Then, for the other 28 PPPs, the answers that differed from Cluster1B, were determined. 

-  The  products  with  only  one  different  answer  are  94%  similar  to  those  in 

Cluster1B. 

-  The products with two different answers are 88% similar to those in Cluster1B. 
-  The products with three different answers are 82% similar to those in Cluster1B. 
-  The products with four different answers are 76% similar to those in Cluster1B. 

June 2017 172 

 
 
 
Study on the feasibility of a European Personal Pension Framework 

Figure 24: Results of Clustering B 

June 2017 173 

 
 
Table 10: Answers to questions selected for Clustering B 

Study on the feasibility of a European Personal Pension Framework 

A 0.I.1  A 1.VI.3  A 1.VII.3  A 1.VII.4  A 1.VII.11.a  A 1.VII.11.b  A 1.VIII.3  A 1.IX.2  A 1.IX.3  A 1.IX.6  A 2.1 
PPP code 
A 
Cyprus_IIP 
A 
Denmark_Alder 
A 
Denmark_RP 
A 
Denmark_Aldersop 
A 
France_PERP 
A 
Germany_PP 
A 
Italy_OPF 
A 
Lithuania_VF 
A 
Luxembourg_IPS 
A 
Malta_PPPna 
A 
Slovenia_VSP 
United Kingdom_SIPP 
A 
United Kingdom_Stakeh  A 
A 
Estonia_VSF 
A 
Finland_IP 
A 
Germany_Rürup 
A 
Italy_PIP 
OL 
Portugal_LifeInsR 
A 
Romania_SPP 
A 
Spain_PPA 
A 
Austria_PZV 
A 
Belgium_LP 
A 
Belgium_PP 
A 
Croatia_OPF 
L 
Germany_Riester 
L 
Ireland_RAC 
A 
Latvia_PPF 
A 
Malta_PPPa 
OL 
Portugal_LifeInsH 
A 
Bulgaria_UVPF 
A 
Greece_PRSP 
A 
Netherlands_RBSA 
A 
Netherlands_RAInsD 
A 
Poland_IKE 
A 
Poland_IKZE 
A 
Portugal_PF 
A 
Sweden_IPS 
L 
France_MadelinTNS 
L 
France_MadelinAgr 
A 
Bulgaria_PVPF 
A 
Netherlands_RAInsA 
L 
Poland_PPE 

Y 
LS, A 
Y 
LS, A 
Y 
A 
Y 
LS, A 
YLS 
A, C 
Y 
LS, A 
YLS 
A, C 
Y 
LS, A, C 
Y 
A, C 
Y 
LS, A, C 
YLS 
LS, A 
Y 
LS, A, C 
Y 
LS, A 
Y 
LS, A, C 
YLS 
A 
N 
A 
YLS 
A, C 
Y 
LS, A, C 
YLS 
LS, A 
Y 
LS, A, C 
Y 
LS, A 
Y 
LS, A 
LS, A 
Y 
LS, A, C  N 
A, C, OO  Y 
A, C, OO  YLS 
LS, A 
YLS 
LS, A, C  N 
Y 
LS, A, C 
YLS 
LS, A 
Y 
LS, A, C 
N 
A 
N 
A 
LS, A 
Y 
Y 
LS, A 
LS, A, C  N 
N 
A 
YLS 
A 
YLS 
A 
YLS 
LS, OO 
N 
A 
Y 
LS, A 

na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
na 
N 
N 
MD 
N 
MD 
N 
N 
FC, MA  N 
na 
N 
na 
N 
N 
na 
OC, MD  Y 
Y 
FC 
na 
N 
N 
OC 
N 
OC 
na 
na 
na 
N 
Y 
OC 
na 
na 
na 
N 
na 
N 
Y 
FC 
Y 
OC 
na 
na 

A 2.4  A 2.5  A 3.1 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
na 
N 
N 
N 
N 
Y 
N 
N 
N 
N 
FR 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
FR 
N 
N 
EP, POE  N 

A 3.2  A 4.4 
N 
na 
N 
N 
N 
na 
N 
N 
N 
na 
N 
N 
N 
na 
N 
N 
N 
na 
N 
N 
N 
na 
N 
na 
N 
na 
N 
N 
N 
NA 
N 
N 
N 
na 
N 
N 
N 
na 
N 
N 
MD, CG  N 
N 
N 
N 
N 
na 
N 
N 
N 
na 
N 
na 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
na 
N 
na 
N 
N 
N 
na 
N 
SC 
N 
SC 
N 
N 
N 
N 
N 
na 
N 

SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
NA 
SR 
SR 
SR 
PE 
SR 
SR 
LR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SR 
SI 

O 
O 
O 
O 
O 
O 
Y 
Y 
O 
O 
Y 
O 
O 
Y 
N 
O 
Y 
O 
Y 
O 
N 
N 
N 
N 
O 
N 
N 
O 
O 
Y 
NA 
N 
N 
N 
N 
Y 
N 
N 
N 
O 
N 
N 

N 
na 
na 
na 
N 
N 
na 
N 
N 
N 
N 
N 
N 
N 
N 
N 
na 
na 
N 
N 
N 
N 
N 
N 
na 
N 
N 
N 
na 
N 
na 
N 
N 
EL 
EL 
na 
na 
N 
N 
N 
N 
na 

Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
N 
N 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
N 
Y 
Y 
N 
N 
Y 
N 
Y 
Y 
Y 
Y 
N 

Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
N 
Y 
Y 
Y 
Y 
Y 
Y 
N 
N 
Y 
Y 
Y 

Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
N 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 
Y 

N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
Y 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 
N 

June 2017 174 

 
 
 
Study on the feasibility of a European Personal Pension Framework 

The following table presents all the coded answers obtained for PPPs in Cluster1. 

Table 11: Coded answers obtained in Cluster1 

Questions 
Is the product designed to target a limited population? 
(0.I.1) 
Is  a  minimum  number  of  years  to  retirement  a  condition  for 
the purchase of the product?(1.VI.3)   
Are  there  any  other  features  /conditions/restrictions  required 
to  obtain  tax  relief  for  the  in-payments?  (Provide  a  detailed 
description)(1.VII.3) 
If  the  answer  to  question  (1.VII.3)  is  yes,  does  there  have  to 
be an insurance element in the product?(1.VII.4) 
Is it possible to change the level of in-payments?(1.VII.11.a) 
Is it possible to take a break?(1.VII.11.b) 
If you answered ‘exempt’ to question (1.VIII.1): What are the 
conditions to qualify for exemption?(1.VIII.3) 
Are  individuals  able  to  choose  the  age  at  which  decumulation 
starts, or is it prescribed by tax or labour law?(1.IX.2) 
What are the options for decumulation?  
(Possible options for decumulation include: lump sums, partial 
lump sums, annuities, annuities during a fixed period.) (1.IX.3) 
Is  it  possible  to  redeem  funds  before  the  pension  age  (early 
out-payments)(1.IX.6) 
Are  there  any  social  security,  labour  and  contract  law 
requirements applicable to PPP? (If so, describe them.)(2.1) 
Is  having  the  nationality  of  the  relevant  Member  State  or  a 
physical address in the Member State a requirement to buy the 
product? (2.4) 
Does the personal pension product cover disability allowance?  
(Comment to what extent and if it is mandatory) (2.5) 
Are there any other conditions to benefit from preferential tax 
treatment,  not  yet  mentioned  above?  (If  so,  describe  them). 
(3.1) 
What are the specific contract and insurance law requirements 
applicable to the PPP?(3.2) 
If you answered yes to the question 4.3:  
What are the requirements for foreign providers from Member 
States/EEA to sell the PPP? (4.4) 

Coded answers obtained for Cluster1 
All 

No 

No 

Na 

Yes 
Yes 
No or Na (if Yields are taxed) 

Yes 

All PPPs allow for annuities as 
decumulation option 

Yes or Yes in limited situation 

No 

No 

Yes or Optional 

No 

No or Na 

Same requirements 

June 2017 175 

 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Clustering C based on 20 feature requirements 

Assumptions 

We performed a new clustering based on the answers to the 20 feature requirements 
selected, applying the following two rules: 

1.  Ranges were applied to coding answers related to the age limit for the 

decumulation phase. 

2.  A hierarchical clustering analysis (agglomerative approach) was performed 
applying value to each answer. The following table summarizes the value 
applied to the coded answers. 

Table 12: Value applied to coded answers obtained in Clustering C 

Topic 

Questions 

Coded answers  Value applied  Comments 

Population 
targeted 
(0.I) 

Age limit 
1.VI 

the 

Is 
product 
designed  to  target  a 
limited population? 
(0.I.1) 

for 

the  age 
What  are 
limits 
the 
accumulation  phase  of 
the PPP? 
(1.VI.1)  

Is  a  minimum  number 
of  years  to  retirement 
for  the 
a  condition 
purchase 
the 
product?(1.VI.3)   

of 

Are  there  any  other 
features 
/conditions/restrictions 
required  to  obtain  tax 
relief 
in-
payments?  (Provide  a 
detailed 
description)(1.VII.3) 

the 

for 

If 
to 
the  answer 
question  (1.VII.3)  is 
yes,  does  there  have 
insurance 
to  be  an 
the 
in 
element 
product?(1.VII.4) 

it 

possible 

Is 
to 
change the level of in-
payments?(1.VII.11.a) 

Is it possible to take a 
break?(1.VII.11.b) 

A 

L 

OL 

N 

Y 

N 

Y 

N 

na 

FC 

OC 

MA 

N 

na 

Y 

Y 

N 

Y 

N 

0 

1 

1 

0 

1 

0 

1 

0 

0 

0 

1 

1 

1 

0 

0 

0 

1 

0 

1 

L  and  OL  answers  have  the 
same restrictive nature. 

OC and MA answers have the 
same restrictive nature.  
FC  answers  were  considered 
as non-restrictive. 
N  and  na  answers  do  not 
present 
restriction 
nature. 

any 

Y  answers  do  not  present  a 
restrictive character: most of 
the  PPPs  have  an  insurance 
element. 
Conversely,  N  answers  were 
considered  as 
the  most 
restrictive. 
Na  answers  result  from  the 
answer  proposed 
the 
previous question and cannot 
be considered as restrictive. 

in 

June 2017 176 

 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

 Yields taxes 
 1.VII 

you 

If 
answered 
‘exempt’  to  question 
(1.VIII.1):  What  are 
to 
conditions 
the 
qualify 
for 
exemption?(1.VIII.3) 

N 

Na 

EL 

Decumulation 
phase 
1.IX 

Is  there  an  age  limit 
for  the  start  of  the 
decumulation  phase? 
(If  so  give  the  age 
limit).(1.IX.1) 

Are  individuals  able  to 
the  age  at 
choose 
decumulation 
which 
starts, 
it 
is 
or 
prescribed  by  tax  or 
labour law?(1.IX.2) 
What  are  the  options 
for decumulation?  
(Possible  options  for 
decumulation  include: 
sums,  partial 
lump 
lump  sums,  annuities, 
annuities 
a 
fixed period.) (1.IX.3) 

during 

Y 

N 

LS 

A 

C 

OO 

0 

0 

1 

0 

1 

1 

1 

1 

1 

0 

to 

What  conditions  are 
those 
attached 
options?  
option, 
(For 
specify 
they  are 
mandatory  or  default 
options  and  describe 
them.) (1.IX.4) 

each 
if 

it 

possible 

Is 
to 
redeem  funds  before 
the pension age (early 
out-payments)(1.IX.6) 

NMDO 

DO 

0 or 1 

M 

Y 

YSL 

N 

1 

0 

0,5 

1 

Only  EL  answers  present  a 
restriction to benefit from the 
exemption 

to 

answers 

The 
the 
questions,  even  if  a  range  is 
applied, 
significant 
heterogeneity  which  do  not 
allow  clustering  analysis  to 
be performed 

show 

M  answers  were  considered 
as the most restrictive. 
Conversely,  NMDO  answers 
were  considered  as  non-
restrictive answers. 
The  valuation  of  DO  answers 
depends  on  the  restrictive 
nature  of  the  conditions  to 
start  the  decumulation  in  a 
different way than the default 
option  (e.g.,  in  Croatia  the 
A 
DO 
decumulation 
is 
allowed  if  the  amount  is  less 
than € 1,400) 
N  answers  were  considered 
as the most restrictive. 
YSL answers were considered 
as  a  medium 
level  of 
restriction. 
Y  answers  were  considered 
as non-restrictive. 

annuities. 
by 

LS 

is 

June 2017 177 

 
 
 
 
 
 
 
 
Social 

2. 
security, 
labour 
and 
law 
contract 
requirements 
applicable  to 
PPPs 

of 

having 

Are  there  any  social 
labour  and 
security, 
contract 
law 
requirements 
applicable  to  PPP?  (If 
so, 
describe 
them.)(2.1) 
Is 
the 
the 
nationality 
relevant Member State 
or  a  physical  address 
in the Member State a 
requirement 
to  buy 
the product? (2.4) 
Does 
the  personal 
pension  product  cover 
disability allowance?  
(Comment 
extent  and 
mandatory) (2.5) 

to  what 
is 
it 

if 

3.Other  legal 
requirements 
applicable  to 
PPPs 

4.Requirements 
applicable 
to 
the providers of 
the PPPs 

Are  there  any  other 
conditions  to  benefit 
from  preferential  tax 
treatment,  not  yet 
mentioned  above?  (If 
them). 
so,  describe 
(3.1) 
What  are  the  specific 
contract and insurance 
requirements 
law 
to 
applicable 
PPPs?(3.2) 
from 
Are  providers 
other 
Member 
States/EEA  allowed  to 
sell the PPPs? (4.3)  
If you answered yes to 
the question 4.3:  
the 
What 
are 
requirements 
for 
foreign  providers  from 
Member States/EEA to 
sell the PPP? (4.4) 

Study on the feasibility of a European Personal Pension Framework 

N 

FR 

EP, POE 

N 

Y 

Y 

O 

N 

N 

MD, CG 

N or na 

SC 

Y 

LR 

SR 

SI 

PE 

0 

0 

1 

0 

1 

0 

0,5 

1 

0 

1 

0 

1 

0 

0,33 

0,67 

1 

N  answers  do  not  present 
any restriction. 
FR  answers  were  considered 
as non-restrictive. 
EP, 
POE 
considered as restrictive. 

answers  were 

No  answers  were  considered 
as restrictive. 
Yes  answers  were  non-
restrictive.  
non-
O 
restrictive  but  could  not  be 
considered  as  Y  answers  and 
a different value is applied. 

answers  were 

All  the  PPPs  considered  can 
be  sold  by  providers  from 
other MS. 

not 

LR  answers  are  the  least 
restrictive conditions.  
SR 
answers  were 
considered as restrictive. 
SI  and  PE  answers  were 
considered as restrictive. 
PE  answers  were  considered 
as  more  restrictive  than  SI 
answers. 

June 2017 178 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Results of Clustering C 

Based on the 19 questions selected and on the value applied to each answer as 
described above, ten clusters were identified.  

Table 13: Clusters identified in Clustering C 
Cluster Number  Name of PPPs  

Number of PPPs 

MS represented 

1 

2 

3 

4 

5 

6 

7 

8 

9 

Cyprus_IIP 
Germany_PP 
Slovenia_VSP 
United 
Kingdom_Stakeh 
Bulgaria_PVPF 
Romania_SPP 
Denmark_RP 
Germany_Rürup 
Luxembourg_IPS 
Italy_OPF 
Italy_PIP 
Portugal_PF 
Finland_IP 
Netherlands_RAInsA 
Lithuania_VF 
Malta_PPPna 
United Kingdom_SIPP 
Portugal_LifeInsR 
Portugal_LifeInsH 
Germany_Riester 

Latvia_PPF 
Bulgaria_UVPF 
Denmark_Alder 
Denmark_Aldersop 

Austria_PZV 
Poland_PPE 
Sweden_IPS 

France_PERP 
Croatia_OPF 
Malta_PPPa 

Netherlands_RBSA 
Netherlands_RAInsD 
Estonia_VSF 
Spain_PPA 
Greece_PRSP 
Belgium_LP 
Belgium_PP 
Ireland_RAC 

Poland_IKE 

Poland_IKZE 

10 

France_MadelinTNS 

France_MadelinAgr 

8 

4 

3 

7 

4 

6 

4 

2 

2 

2 

7 

4 

3 

6 

2 

6 

2 

2 

1 

1 

Total 

42 

25 

The coded answers to the questions selected are presented in the table below. 

For  each  cluster,  we  analysed  the  differences  between  the  answers  obtained. 
Significant  differences  are  highlighted  in  yellow  while  non-decisive  differences  are 
highlighted in green. 

Two main remarks should be made: 

-  This  clustering  method  does  not  allow  homogeneous  clusters  to  be  obtained. 

Significant differences are detected in each group.  
Four out of ten clusters are only/mainly composed of PPPs from the same MS. 

- 

June 2017 179 

 
 
 
 
Table 14: Results of Clustering C 

Study on the feasibility of a European Personal Pension Framework 

June 2017 180 

PPP codeA 0.I.1A 0.I.1VA. 1.VI.1VA 1.VI.3VA 1.VII.3VA 1.VII.4VA 1.VII.11.aVA 1.VII.11.bVA 1.VIII.3VA 1.IX.1RangeA 1.IX.2VA 1.IX.3LSACOOA 1.IX.4VA 1.IX.6VA 2.1VA 2.4VA 2.5VA 3.1VA 3.2VA 4.4VClusterCyprus_IIPYA0N0N0N0na0Y0Y0N0NNY0LS, A1100no M or DO0Y0N0N0O0,5N0na0SR0,331Germany_PPYA0N0N0N0na0Y0Y0N0NNY0LS, A1100no M or DO0Y0N0N0O0,5N0N0SR0,331Slovenia_VSPYA0N0N0N0na0Y0Y0N058< 60Y0LS, A1100no M or DO0YLS0,5N0N0Y0N0na0SR0,331United Kingdom_StakehYA0N0N0N0na0Y0Y0N055< 60Y0LS, A1100no M or DO0Y0N0N0O0,5N0na0SR0,331Latvia_PPFYA0N0N0N0na0Y0Y0N055< 60Y0LS, A1100no M or DO0YLS0,5N0N0N1N0na0LR01Bulgaria_UVPFYA0N0N0FC0Y0Y0Y0N064.460 to 65Y0LS, A1100no M or DO0YLS0,5FR0N0Y0N0N0SR0,331Denmark_AlderYA0N0N0N0na0Y0Y0na06060 to 65Y0LS, A1100DO0Y0N0N0O0,5N0N0SR0,331Denmark_AldersopYA0N0N0N0na0Y0Y0na06060 to 65Y0LS, A1100no M or DO0Y0N0N0O0,5N0N0SR0,331Bulgaria_PVPFYA0N0N0FC0Y0Y0Y0N06060 to 65Y0LS, OO0101no M or DO0YLS0,5FR0N0O0,5N0N0SR0,332Romania_SPPYA0Y1N0N0na0Y0Y0N06060 to 65N1LS, A1100no M or DO0YLS0,5N0N0Y0N0na0SR0,332Austria_PZVYA0Y1N0N0na0Y0Y0N0NNY0LS, A1100no M or DO0Y0N0N0N1MD, CG1N0SR0,332Poland_PPEYL1Y1N0na0na0Y0Y0na06060 to 65N1LS, A1000no M or DO0Y0EP, POE1N0N1N0na0SI0,672Denmark_RPYA0N0N0N0na0Y0Y0na06060 to 65Y0A1000M1Y0N0N0O0,5N0na0SR0,333Germany_RürupYA0N0N0N0na0Y0Y0N06260 to 65Y0A1000M1N1N0N0O0,5N0N0SR0,333Sweden_IPSYA0N0N0na0na0Y0Y0na055< 60N1A1000M1N1N0N0N1N0na0SR0,333Luxembourg_IPSYA0Y1N0N0na0Y0Y0N060 to 7560 to 65Y0A, C1010no M or DO0Y0N0N0O0,5N0na0SR0,334Italy_OPFYA0N0N0N0na0Y0Y0na0NNY0A, C1010no M or DO0YLS0,5N0N0Y0N0na0SR0,334Italy_PIPYA0N0Y1N0na0Y0Y0na0NNY0A, C1010no M or DO0YLS0,5N0N0Y0N0na0SR0,334Portugal_PFYA0N0N0OC1Y0Y0Y0na06060 to 65Y0LS, A, C1110no M or DO0N1N0N0Y0N0N0SR0,334France_PERPYA0N0N0N0na0Y0Y0N06260 to 65Y0A, C1010DO0YLS0,5N0N0O0,5N0na0SR0,334Croatia_OPFYA0N0N0N0N1Y0Y0N050< 60Y0LS, A, C1110DO0,75N1N0N0N1N0na0PE14Malta_PPPaYA0N0N0N0na0Y0Y0N050< 60Y0LS, A, C1110DO0N1N0Y1O0,5N0N0SR0,334Finland_IPYA0Y1N0N0na0Y0Y0N068> 65Y0A1000M1YLS0,5N0N0N1N0NA0SR0,335Netherlands_RAInsAYA0Y1N0OC1Y0Y0Y0N065 + 3 m to 70. + 3 m> 65Y0A1000M1N1N0N0N1N0N0SR0,335Netherlands_RBSAYA0Y1N0OC1N1Y0Y0N065 + 3 m to 70. + 3 m> 65Y0A1000M1N1N0N0N1N0N0SR0,335Netherlands_RAInsDYA0Y1N0OC1N1Y0Y0N065 + 3 m to 70. + 3 m> 65Y0A1000M1N1N0N0N1N0N0SR0,335Lithuania_VFYA0N0N0N0na0Y0Y0N055< 60Y0LS, A, C1110no M or DO0Y0N0N0Y0N0N0SR0,336Malta_PPPnaYA0N0N0N0na0Y0Y0N050< 60Y0LS, A, C1110DO0Y0N0N0O0,5N0N0SR0,336United Kingdom_SIPPYA0N0N0N0na0Y0Y0N055< 60Y0LS, A, C1110no M or DO0Y0N0N0O0,5N0na0SR0,336Estonia_VSFYA0N0N0N0na0Y0Y0N0NNY0LS, A, C1110no M or DO0Y0N0N0Y0N0N0SR0,336Spain_PPAYA0N0N0N0na0Y0Y0N0NNN1LS, A, C1110no M or DO0Y0N0N0O0,5N0N0NA0,336Greece_PRSPYA0N0N0N0na0N1N1na067> 65N1LS, A, C1110no M or DO0Y0N0N0na0,5N0N0SR0,336Portugal_LifeInsRYOL1N0N0N0na0Y0Y0na055< 60Y0LS, A, C1110no M or DO0Y0N0N0O0,5N0N0SR0,337Portugal_LifeInsHYOL1N0N0OC, MD1Y0Y0Y0na066 + 2 m> 65Y0LS, A, C1110no M or DO0Y0N0N0O0,5N0N0SR0,337Belgium_LPYA0Y1N0MD1N1Y0Y0N0NNY0LS, A1100no M or DO0Y0N0N0N1N0N0SR0,337Belgium_PPYA0Y1N0MD1N1Y0Y0N06060 to 65Y0LS, A1100DO0Y0N0N0N1N0N0SR0,337Germany_RiesterYL1N0N0FC, MA1N1Y0Y0na06260 to 65Y0A, C, OO1011no M or DO0Y0N0N0O0,5N0N0SR0,338Ireland_RACYL1N0N0N0na0Y0Y0N060 to 7560 to 65Y0A, C, OO1011no M or DO0YLS0,5N0N0N1N0na0SR0,338Poland_IKEYA0N0N0na0na0Y0Y0EL16060 to 65N1LS, A1100no M or DO0Y0N0N0N1N0na0SR0,339Poland_IKZEYA0N0N0N0na0Y0Y0EL16560 to 65N1LS, A1100no M or DO0Y0N0N0N1N0na0SR0,339France_MadelinTNSYL1N0N0N0na0Y0N1N06260 to 65Y0A1000M1YLS0,5N0N0N1N0SC1SR0,3310France_MadelinAgrYL1N0N0N0na0Y0N1N06260 to 65Y0A1000M1YLS0,5N0N0N1N0SC1SR0,3310 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Table 15: Answers obtained in Clustering C – reading grid 
Grey answers – 

This question was not taken into account because of the heterogeneity of 
answers obtained.  

answers not considered 

An attempt to harmonise answers was performed applying ranges instead 
of figures. However, there is still significant heterogeneity.  

Yellow answers – 

Questions 

Comments 

significant differences  

0.I.1 

A significant difference occurs in the case of a limitation of 
the population targeted  

1.VII.3 

A significant difference occurs if specific conditions are 
required for the benefit of the tax relief (e.g. minimum 
holding period) 

1.VII.4 

A significant difference occurs if there is no insurance 
element in the product 

1.VII.11.a 

1.VII.11.b 

1.IX.2 

1.IX.3 

1.IX.4 

1.IX.6 

2.1 

2.4 

2.5 

A significant difference occurs if it is not possible to 
change the level of in-payments or to take a break 

A significant difference occurs if pension savers are not 
allowed to choose the age at which they start the 
decumulation phase 

A significant difference occurs if the decumulation options 
allowed are not the same 

A significant difference occurs if the decumulation option is  
restrictive compared to the options allowed for the other 
PPPs within the same cluster 

A significant difference occurs if the pension saver does 
not have the same level of restriction regarding the 
possibility of redeeming funds before retirement age (or 
assimilated) (e.g. early out-payments are allowed for a 
given PPP whereas they are not allowed for another PPP) 

In several circumstances, conditions to redeem funds are 
restrictive and the differences should be considered as 
significant, e.g. being recognised as a first-group invalid 
for life (Latvia), expiry of unemployment benefit rights 
(France) 

A significant difference occurs if specific requirements are 
applicable to the PPP (e.g. the pension saver must not 
already have a similar PPP) 

A significant difference occurs if having the nationality of 
the relevant MS or a physical address in the MS is a 
requirement to buy the PPP 

A significant difference occurs if the products do not offer 
the same level of coverage regarding disability allowances 
(e.g. the coverage is optional for a given PPP and it is not 
allowed for another PPP) 

3.1 

A significant difference occurs if specific conditions to 

June 2017 181 

 
 
Study on the feasibility of a European Personal Pension Framework 

benefit from preferential tax treatment have been 
mentioned (e.g. minimum holding period) 

4.4 

A significant difference occurs if the level of requirements 
for foreign providers willing to sell the PPP in a given MS is 
not the same (e.g. to have a permanent establishment or 
on the contrary lightened requirements) 

Green answers – 

Questions 

Comments 

Non-significant differences 

1.VI.1 

1.VI.3 

1.VII.3 

1.IX.2 

1.IX.4 

1.IX.6 

2.1 

2.5 

The differences observed are not considered as significant 
because the limitation always corresponds to an advanced 
age (e.g. 60 years’ old in Romania, 65 years’ old in Austria 

The sole difference observed is not significant (i.e., one 
year of contributions)  

Formal conditions to obtain the tax relief on in-payments 
have not been considered as significant differences 

Coded answers have been interpreted and some 
differences have not been considered as significant (e.g. 
the pay-out period is regulated between five and 15 years 
in Sweden, the limitation mentioned in the PPE 
questionnaire is already taken into account elsewhere in 
the study) 

The difference is not significant between ‘no mandatory or 
default option’ and ‘default option’ answers if the 
possibility to choose a decumulation option other than the 
default one is not limited 

If there is a possibility of redeeming funds before the 
retirement age (or assimilated), differences between ‘Y’ 
and ‘YLS’ should be considered as non-significant if the 
conditions to redeem funds are not restrictive  

Formal requirements applicable to the PPP were not 
considered as significant differences 

The differences between answers ‘Y’ and ‘O’ were not 
considered as significant 

June 2017 182 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Clustering D based on the decumulation options 

Assumptions 

We  performed  another  clustering  based  first  on  the  decumulation  options  allowed  by 
the PPP regime.  
Three groups of PPPs were composed: 

-  Group1 gathering all the PPPs for which a decumulation by annuities is allowed; 
-  Group2  gathering  all  the  PPPs  for  which  a  decumulation  by  lump  sum  and 

annuities is allowed; 

-  Group3  gathering  all  the  PPPs  for  which  a  decumulation  by  annuities  and 

combination of annuities and lump sum is allowed. 

For each group, a clustering was performed following the method applied in Clustering 
A.  

Results of Clustering D 

Three  groups  gathering  PPPs  which  have  decumulation  options  in  common  were 
identified and are represented in the diagram below: 

Figure 25: Decumulation options in common identified 

June 2017 183 

 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

For each of the three groups represented above, based on the answers to the 
questions selected (same questions as Clustering B), clusters have been identified: 

-  Group1  (decumulation  option  by  annuities  in  common)  which  gathers  41  PPPs 
in 25 Member States: 14 PPPs in 11 Member States were identified (hereafter 
‘Cluster1D’).  These  14  PPPs  have  the  same  answers  to  the  17  questions 
selected.  
Then  for  the  other  27  PPPs,  the  answers  that  differed  from  Cluster1,  were 
determined. 

o  The products with only one different answer are 94% similar to those in 

Cluster1D. 

o  The  products  with  two  different  answers  are  88%  similar  to  those  in 

Cluster1D. 

o  The  products  with  three  different  answers  are  82%  similar  to  those  in 

Cluster1D. 

o  The  products  with  four  different  answers  are  76%  similar  to  those  in 

Cluster1D. 

-  Group2  (decumulation  options  by  lump  sum  and  annuities  in  common)  which 
gathers  26  PPPs  in  25  Member  States:  10  PPPs  in  8  Member  States  were 
identified (hereafter ‘Cluster2D’). These 10 PPPs have the same answers to the 
17 questions selected.  

June 2017 184 

 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Then  for  the  other  16  PPPs,  the  answers  that  differed  from  Cluster2D,  were 
determined. 

o  The products with only one different answer are 94% similar to those in 

Cluster2D. 

o  The  products  with  two  different  answers  are  88%  similar  to  those  in 

Cluster2D. 

o  The  products  with  three  different  answers  are  82%  similar  to  those  in 

Cluster2D. 

o  The  products  with  four  different  answers  are  76%  similar  to  those  in 

Cluster2D. 

-  Group3  (decumulation  options  by  annuities  and  combination  of  lump sum  and 
annuities  in  common)  which  gathers  17  PPPs  in  13  MS:  7  PPPs  in  7  Member 
States  were  identified  (hereafter  ‘Cluster3D’).  These  7  PPPs  have  the  same 
answers to the 17 questions selected.  
Then  for  the  other  10  PPPs,  the  answers  that  differed  from  Cluster3D,  were 
determined. 

o  The products with only one different answer are 94% similar to those in 

Cluster3D. 

o  The  products  with  two  different  answers  are  88%  similar  to  those  in 

Cluster3D. 

o  The  products  with  three  different  answers  are  82%  similar  to  those  in 

Cluster3D. 

Clustering  D  is  non-conclusive  as  the  results  are  quite  similar  to  the  results  of 
Clustering B. The products with conditions in common that could be clustered together 
in Cluster2D and Cluster3D are included in Cluster 1D which is identical to Cluster1B. 

June 2017 185 

 
 
 
 
Figure 26: Results for Group1 in Clustering D 

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Figure 27: Results for Group2 in Clustering D 

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Figure 28: Results for Group3 in Clustering D 

June 2017 188 

 
 
 
 
 
Table 16: Answers to the questions selected for Group1 in Clustering D 

Study on the feasibility of a European Personal Pension Framework 

June 2017 189 

PPP codeA 0.I.1A 1.VI.3A 1.VII.3A 1.VII.4A 1.VII.11.aA 1.VII.11.bA 1.VIII.3A 1.IX.2A 1.IX.3A 1.IX.6A 2.1A 2.4A 2.5A 3.1A 3.2A 4.4Cyprus_IIPANNnaYYNYLS, AYNNONnaSRDenmark_AlderANNnaYYnaYLS, AYNNONNSRDenmark_RPANNnaYYnaYAYNNONnaSRDenmark_AldersopANNnaYYnaYLS, AYNNONNSRFrance_PERPANNnaYYNYA, CYLSNNONnaSRGermany_PPANNnaYYNYLS, AYNNONNSRItaly_OPFANNnaYYnaYA, CYLSNNYNnaSRLithuania_VFANNnaYYNYLS, A, CYNNYNNSRLuxembourg_IPSANNnaYYNYA, CYNNONnaSRMalta_PPPnaANNnaYYNYLS, A, CYNNONNSRSlovenia_VSPANNnaYYNYLS, AYLSNNYNnaSRUnited Kingdom_SIPPANNnaYYNYLS, A, CYNNONnaSRUnited Kingdom_StakehANNnaYYNYLS, AYNNONnaSREstonia_VSFANNnaYYNYLS, A, CYNNYNNSRFinland_IPANNnaYYNYAYLSNNNNNASRGermany_RürupANNnaYYNYANNNONNSRItaly_PIPAYNnaYYnaYA, CYLSNNYNnaSRPortugal_LifeInsROLNNnaYYnaYLS, A, CYNNONNSRRomania_SPPANNnaYYNNLS, AYLSNNYNnaSRSpain_PPAANNnaYYNNLS, A, CYNNONNNAAustria_PZVANNnaYYNYLS, AYNNNMD, CGNSRBelgium_LPANMDNYYNYLS, AYNNNNNSRBelgium_PPANMDNYYNYLS, AYNNNNNSRCroatia_OPFANNNYYNYLS, A, CNNNNNnaPEGermany_RiesterLNFC, MANYYnaYA, C, OOYnaNONNSRIreland_RACLNNnaYYNYA, C, OOYLSNNNNnaSRLatvia_PPFANNnaYYNYLS, AYLSNNNNnaLRMalta_PPPaANNnaYYNYLS, A, CNNYONNSRPortugal_LifeInsHOLNOC, MDYYYnaYLS, A, CYNNONNSRBulgaria_UVPFANFCYYYNYLS, AYLSFRNYNNSRGreece_PRSPANNnaNNnaNLS, A, CYNNNANNSRNetherlands_RBSAANOCNYYNYANNNNNNSRNetherlands_RAInsDANOCNYYNYANNNNNNSRPoland_IKEANnanaYYELNLS, AYNNNNnaSRPoland_IKZEANNnaYYELNLS, AYNNNNnaSRPortugal_PFANOCYYYnaYLS, A, CNNNYNNSRSweden_IPSANnanaYYnaNANNNNNnaSRFrance_MadelinTNSLNNnaYNNYAYLSNNNNSCSRFrance_MadelinAgrLNNnaYNNYAYLSNNNNSCSRNetherlands_RAInsAANOCYYYNYANNNNNNSRPoland_PPELNnanaYYnaNLS, AYEP, POENNNnaSI 
 
 
Study on the feasibility of a European Personal Pension Framework 

Table 17: Answers to the questions selected for Group2 in Clustering D 

June 2017 190 

PPP codeA 0.I.1A 1.VI.3A 1.VII.3A 1.VII.4A 1.VII.11.aA 1.VII.11.bA 1.VIII.3A 1.IX.2A 1.IX.3A 1.IX.6A 2.1A 2.4A 2.5A 3.1A 3.2A 4.4Cyprus_IIPANNnaYYNYLS, AYNNONnaSRDenmark_AlderANNnaYYnaYLS, AYNNONNSRDenmark_AldersopANNnaYYnaYLS, AYNNONNSRGermany_PPANNnaYYNYLS, AYNNONNSRLithuania_VFANNnaYYNYLS, A, CYNNYNNSRMalta_PPPnaANNnaYYNYLS, A, CYNNONNSRSlovenia_VSPANNnaYYNYLS, AYLSNNYNnaSRUnited Kingdom_SIPPANNnaYYNYLS, A, CYNNONnaSRUnited Kingdom_StakehANNnaYYNYLS, AYNNONnaSREstonia_VSFANNnaYYNYLS, A, CYNNYNNSRPortugal_LifeInsROLNNnaYYnaYLS, A, CYNNONNSRRomania_SPPANNnaYYNNLS, AYLSNNYNnaSRSpain_PPAANNnaYYNNLS, A, CYNNONNNAAustria_PZVANNnaYYNYLS, AYNNNMD, CGNSRBelgium_LPANMDNYYNYLS, AYNNNNNSRBelgium_PPANMDNYYNYLS, AYNNNNNSRCroatia_OPFANNNYYNYLS, A, CNNNNNnaPELatvia_PPFANNnaYYNYLS, AYLSNNNNnaLRMalta_PPPaANNnaYYNYLS, A, CNNYONNSRPortugal_LifeInsHOLNOC, MDYYYnaYLS, A, CYNNONNSRBulgaria_UVPFANFCYYYNYLS, AYLSFRNYNNSRGreece_PRSPANNnaNNnaNLS, A, CYNNNANNSRPoland_IKEANnanaYYELNLS, AYNNNNnaSRPoland_IKZEANNnaYYELNLS, AYNNNNnaSRPortugal_PFANOCYYYnaYLS, A, CNNNYNNSRPoland_PPELNnanaYYnaNLS, AYEP, POENNNnaSI 
 
 
 
Table 18: Answers to the questions selected for Group3 in Clustering D 

Study on the feasibility of a European Personal Pension Framework 

June 2017 191 

PPP codeA 0.I.1A 1.VI.3A 1.VII.3A 1.VII.4A 1.VII.11.aA 1.VII.11.bA 1.VIII.3A 1.IX.2A 1.IX.3A 1.IX.6A 2.1A 2.4A 2.5A 3.1A 3.2A 4.4France_PERPANNnaYYNYA, CYLSNNONnaSRItaly_OPFANNnaYYnaYA, CYLSNNYNnaSRLithuania_VFANNnaYYNYLS, A, CYNNYNNSRLuxembourg_IPSANNnaYYNYA, CYNNONnaSRMalta_PPPnaANNnaYYNYLS, A, CYNNONNSRUnited Kingdom_SIPPANNnaYYNYLS, A, CYNNONnaSREstonia_VSFANNnaYYNYLS, A, CYNNYNNSRItaly_PIPAYNnaYYnaYA, CYLSNNYNnaSRPortugal_LifeInsROLNNnaYYnaYLS, A, CYNNONNSRSpain_PPAANNnaYYNNLS, A, CYNNONNNACroatia_OPFANNNYYNYLS, A, CNNNNNnaPEGermany_RiesterLNFC, MANYYnaYA, C, OOYnaNONNSRIreland_RACLNNnaYYNYA, C, OOYLSNNNNnaSRMalta_PPPaANNnaYYNYLS, A, CNNYONNSRPortugal_LifeInsHOLNOC, MDYYYnaYLS, A, CYNNONNSRGreece_PRSPANNnaNNnaNLS, A, CYNNNANNSRPortugal_PFANOCYYYnaYLS, A, CNNNYNNSR 
 
 
Study on the feasibility of a European Personal Pension Framework 

PPP  market  overview,  products  with  high  market 
penetration and their features 

The PPP Market overview (2) 
This  section  describes  PPP  markets  looking  at:  (i)  Assets  under  management  (AuM) 
(ii) number of PPP holders and (iii) level of in-payments.  

Three  relationships  are  identified  in  this  section.  While  the  level  of  AuM  seems  to 
increase  with  the  level  of  household  financial  assets,  a  link  also  exists  between  the 
number of PPP holders and the size of the population. Finally, the level of in-payments 
is impacted by the household saving rate.  

Assets under Management (AuM) 

In 2014, the total assets under management (AuM) of the PPPs of 24 Member States 
for  which  data  was  available  amounts  to  EUR 0.6  trillion.  This  represents  2%  of 
European  household  financial  assets  and  4%  of  Gross  Domestic  Product  (hereafter 
‘GDP’). 

Member States can be divided into four groups in terms of capitalisation: 

  Member States with a high level of capitalisation, such as Spain, France and 
Denmark,  representing  37%  of  the  total  AUM  of  the  36  PPPs  for  which 
information  was  collected.  Except  for  Danish  PPPs,  all  PPPs  available  in  these 
Member States have been set up for more than 20 years. 

  Member  States  with  medium  capitalisation,  such  as  Sweden,  Belgium  and 

Italy, representing 20% of the total AuM of the 36 PPPs.  

  Member  States  with  relatively  low  capitalisation,  such  as  Portugal,  the 
Czech  Republic,  Finland,  the  Netherlands,  Austria  and  Slovenia,  representing 
8%  of  the  total  AuM,  and  Member  States  with  very  low  capitalisation,  the 
majority  of  which  are  located  in  Central  Eastern  Europe  such  as  Bulgaria, 
Latvia,  Estonia  and  Romania,  account  for  0.18%  of  the  total  AuM  .

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Figure 29 : PPP Assets under Management by Member State 
In € million [24 MS], 2014 

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There seems to be a positive relationship between the volume of AuM and the 
volume of household financial assets. This relationship is illustrated in Figure 30. 
The  positive  relationship  plotted  suggests  that  the  larger  the  volume  of  household 
financial assets, the larger the volume of PPP AuM.  

Figure  30:  Scatter  plot  of  assets  under  management  as  a  function  of 
household financial assets 
In € million, logarithmic scale, 2014 [24 MS] 

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Participation in personal pension plans 
This study covers a total of 52 million PPP holders24 and 27 PPPs.  

In  most  Member  States,  PPP  holders  represent  less  than  10%  of  the 
population. As  shown in Figure 31, the percentage of PPP holders is above 15%  in 
only a few Member States (Slovenia, Austria, Germany, Spain and Sweden). This can 
be  explained  by  the  relatively  older  age  of  the  populations  of  these  Member  States. 
Subscription to a PPP is more likely to occur when retirement approaches. Since 2010, 
the number of PPP holders has increased by 5%.  

Figure 31: PPP coverage rate by Member State                    
2010-2014 [13 MS]          

Slovenia

Germany

Spain

Austria

Sweden

Latvia

Bulgaria

Denmark

France

Croatia

Ireland

Poland

Romania

0%

5%

10%

15%

20%

25%

30%

2014

2010

24 This data is based on the total number of contracts, not on the number of policyholders, assuming that most people only 
subscribe to one product. 

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The  number  of  PPP  holders  is,  on  average,  higher  in  the  most  populated 
Member  States.  Figure  32  below  shows  a  positive  relationship  between  the  size  of 
the population and the number of PPP holders. It is to be expected that the number of 
PPP holders is higher in the most populated Member States.  

Figure 32: Scatter plot of number of holders as a function of population over 
15 years old 
2014 

Central Eastern Europe 
Northen Europe 
Southern Europe 
Western Europe 

Contributions to personal pension plans 

In-payments amount to  €41bn and cover 28 PPPs.  They have increased by 3%  since 
2010.  Germany  and  the  UK,  with  €17bn  of  in-payments,  are  the  most  significant 
providers  in  terms  of  in-payments,  representing  37%  of  the  total  volume.  A  second 
group of countries (Spain, France, Italy and Belgium) stands out with a volume of in-
payments of €22bn, representing 45% of the total volume. 

Figure 33: In-payments made to PPPs by Member State 
In Million €, 2010-2014 [14 MS] 

A  positive  relationship  seems  to  exist  between  the  volume  of  in-payments 
and  the volume  of  gross  annual  savings:  it  is  to  be  expected  that  the  larger  the 

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020004000600080001000012000LithuaniaBulgariaRomaniaCroatiaLatviaPolandFinlandAustriaDenmarkBelgiumItalyFranceSpainGermanyInpayments20142010 
 
 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

gross  annual  saving,  the  larger  the  value  of  in-payments.  This  relationship  is 
illustrated in Figure 34. 

Figure 34: In-payments to PPPs over gross annual savings 

In € million, 2014 

Products  with  the  highest  market  penetration  and  their  key  features 
(3) 
Leveraging  on  the  relationships  established  in  the  previous  section,  a  penetration 
index  was  built  to  identify  the  PPPs  with  the  highest  MPI.  This  index  is  a 
multidimensional indicator taking into account three dimensions: 

the  product’s  success 

  The  product’s  level  of  capitalisation:  The  level  of  the  product’s  assets 
under  management  (AuM)  was  compared  to  household  financial  assets  to 
terms  of  capitalisation  or  asset 
in 
measure 
accumulation. Household financial assets were preferred to the more common 
GDP, because, although similar (see figure below), Household Financial Assets 
(hereafter  “HHFA”)  is  a  closer  proxy  for  measuring  the  ability  to  invest  in  a 
PPP. 

  The  level  of  participation  in  the  product:  Similarly,  to  measure  the 
attractiveness  of  the  product,  the  number  of  PPP  holders  was  compared  with 
the size of the population. 

  The  dynamic  of  the  product:  To  capture  the  dynamic  of  the  product,  the 

volume of annual in-payments was compared to the level of savings. 

It would also have been interesting to look at the replacement rate associated with the 
product  to  measure  success.  However,  as  most  of  the  PPPs  considered  in  this  study 
are  still in  the  accumulation  phase,  data  on  the  PPP  replacement  rate  often  does  not 
exist, preventing this factor from being used to measure success.  

Figure 35 - Relationship between GDP and HHFA 

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Computation of a penetration index 

The methodology used to measure high market penetration is to evaluate the relative 
performance  of  the  three  aforementioned  indicators  with  respect  to  their  respective 
trends. 

The points for each dimension are plotted on a logarithmic scale, so as not to give an 
unfair  advantage  to  any  country  due  to  its  size,  household  financial  assets  or 
household  savings  -  which  would  each  generate  higher  performance  indicators  when 
small.  

A linear regression for each of the indicators outputs a trend line. 

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Figure 36 - Visual measurement of distance from points to trend line 
 (not to scale) 

The distance of each point to this line makes it possible to measure how much above 
(or below) the trend each PPP market stands. It is therefore counted  positively if the 
PPP is above the line, and negatively if it is below it. 
To give the same relative weight to each dimension in the final grade, this distance is 
divided by twice the standard deviation. 
The final grade is obtained by calculating the average for each of the three dimensions 
that  are  available  for  the  product.  The  performance  is  evaluated  for  the  36  products 
for which at least one of the three indicator dimensions can be computed. (See Error! 
Reference source not found. index) 

Description of the five PPPs with the highest market penetration index (MPI) 

The  five  products  emerging  with  the  highest  score  according  to  our  penetration 
indicator are listed in the below table. 

Table 19: Detailed score of the five PPPs25with the highest penetration index 

Ranking  Member State 

coded name 

Capitalisat
ion Ind. 

Participati
on Ind. 

Dynamic 
Ind. 

1 

2 

3 

Germany 

Germany_Rie
ster 

0.65 

Spain 

Spain_IPP 

0.52 

Belgium 

Belgium_PP 

0.38 

0.87 

0.74 

0.73 

1.43 

1.33 

1.44 

Market 
penetratio
n index  

Tax 
regime 

0.98 

0.86 

0.85 

EET 

EET 

EET 

25 While the Czech Republic is among the PPPs with the highest score according to the penetration indicator, 
it is not included in the list of PPPs. This choice was made due to the specific market characteristics in the 
Czech Republic. For example,  this PPP appears to benefit from a high level of  public aid. It is also exempt 
from taxation (EEE). Furthermore the Czech Republic does not have a second pillar which could also explain 
the high market penetration of this product. Due to these specific external factors, other than the product’s 
features,  this  PPP  was  not  included  in  the  list  of  products  with  the  highest  penetration  index  for  the 
purposes of this study.  

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Ranking  Member State 

coded name 

Capitalisat
ion Ind. 

Participati
on Ind. 

Dynamic 
Ind. 

Market 
penetratio
n index  

Tax 
regime 

4 

5 

 

 

Denmark 

Denmark_RP 

0.69 

Austria 

 Austria_PZV 

0.18 

0.07 

0.62 

1.19 

1.08 

0.65 

0.62 

ETT 

EEE 

In  Germany  more  than  20%  of  the  population  has  a  Riester  PPP,  which  is  the 
highest  level  of  enrolment  after  that  of  the  Czech  Republic.  Such  a  high  level  of 
participation explains Germany’s high market penetration score. Likewise, the level 
of  participation  in  the  Austria  PZV  product  is  high,  which  compensates  for  its 
moderate level of capitalisation.  

Introduced  in  1988,  the  Spanish  individual  personal  pension  plan  is  one  of  the 
oldest  PPPs  available  in  the  EU.  With  a  coverage  rate  of  16%  of  the  entire 
population, it achieves the third highest MPI score.  This finding should be nuanced 
by the fact that the holders can have more than one PPP and can switch between 
these  products.  In  practice,  the  product  is  used  as  a  financial  risk  mitigation 
strategy. 

  The  Belgian  product  was  introduced  in  1992.  More  than  22%  of  Belgium’s 
population  holds  the  Belgium  PP  product.  This  product  benefits  from  strong 
momentum.  For  instance  the  volume  of  in-payments  for  this  product  represents 
about  3%  of  Belgium’s  annual  gross  savings  in  2014.  This  explains  the  high  MPI 
score for the Belgium PP. 

 

Introduced  in  2005,  the  Danish  Ratepension  covers  7%  of  the  population  aged 
over 15, while the annual contributions represent 6% of gross savings. It has the 
ninth  highest  score  in  terms  of  capitalisation:  the  AuM  represents  12%  of 
household  financial  assets  and  has  the  highest  ratio  over  GDP  compared  to  the 
other  products  (20%  in  2014).  Indeed,  Denmark  has  the  best  and  most  robust 
pension  system  in  the  world,  according  to  the  Melbourne  Mercer  Global  Pension 
Index 2014. 

  Austria PPP has an enrolment rate of 20% which is one of the highest observed for 
the PPPs that we analysed. However, its capitalization rate is one of the lowest, at 
only 1%. 

Grouping of PPP products  

Using the above penetration index, the products were divided into three groups in  

Table 20: 

  High MPI Score. This group includes the 11 products with the highest MPI  

  Low  MPI  score  products.  This  group  includes  the  12  products  with  the  lowest 

MPI.  

  Medium MPI score. This group includes the 12 remaining products.  

Table  20:  Grouping  of  PPP  into  More  successful,  Successful  and  Less 
successful  

Rank  PPP Name 

1 

2 

3 

4 

Germany_Riester 

Spain_IPP 

Belgium_PP 

Denmark_RP 

Cap. 

Part. 

Dyn. 

Penetration Index 

AuM/HHFA 

0.65 

0.87 

1.43 

0.52 

0.74 

1.33 

0.38 

0.73 

1.44 

0.69 

0.07 

1.19 

0.98 

0.86 

0.85 

0.65 

0.041 

0.033 

0.023 

0.068 

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Rank  PPP Name 

Cap. 

Part. 

Dyn. 

Penetration Index 

AuM/HHFA 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

29 

30 

31 

32 

33 

34 

35 

Austria_PZV 

Belgium_LP 

Slovenia_VSP 

Italy_PIP 

Finland_IP 

United Kingdom_Stakeh 

Denmark_AlderS 

Sweden_IPS 

France_MadelinTNS 

Spain_PPA 

France_PERP 

Latvia_PPF 

0.18 

0.62 

1.08 

0.21 

0.29 

1.08 

0.43 

0.58 

0.03 

0.19 

1.29 

0.49 

0.00 

0.96 

0.00 

-0.04 

1.37 

0.48 

-0.12 

0.84 

0.11 

0.62 

0.10 

-0.19 

1.18 

0.02 

-0.17 

1.23 

-0.21 

0.06 

1.06 

-0.05 

0.27 

0.56 

Slovak Republic_PPF 

0.24 

0.00 

Italy_OPF 

Estonia_VSF 

Portugal_PPR 

Croatia_OPF 

Ireland_PRSA 

Bulgaria_VPF 

Malta_PPPa 

Malta_PPPna 

Germany_Rürup 

Spain_MP 

Netherlands_RBSA 

Portugal_PF 

Romania_SPP 

Poland_IKE 

Poland_PPE 

France_MadelinAgr 

Lithuania_VF 

Poland_IKZE 

-0.13 

-0.25 

1.04 

0.02 

0.06 

-0.19 

-0.29 

0.43 

0.87 

-0.18 

-0.02 

0.48 

0.15 

-0.04 

-0.37 

0.23 

0.26 

0.60 

-0.62 

0.60 

-0.62 

0.00 

-0.09 

-0.21 

-0.69 

0.69 

-0.08 

0.00 

-0.47 

-0.79 

0.87 

-0.49 

-0.36 

0.25 

-0.76 

-0.20 

0.25 

-0.54 

-0.54 

0.33 

-0.50 

-0.88 

0.51 

-0.66 

0.00 

0.04 

0.62 

0.52 

0.50 

0.50 

0.48 

0.44 

0.40 

0.37 

0.36 

0.36 

0.31 

0.26 

0.24 

0.22 

0.17 

0.13 

0.09 

0.05 

0.04 

-0.01 

-0.01 

-0.04 

-0.07 

-0.08 

-0.13 

-0.20 

-0.24 

-0.25 

-0.29 

-0.31 

0.013 

0.013 

0.049 

0.006 

0.042 

0.034 

0.010 

0.007 

0.006 

0.003 

0.012 

0.026 

0.003 

0.015 

0.004 

0.007 

0.013 

0.004 

0.096 

0.096 

0.003 

0.005 

0.002 

0.002 

0.001 

0.001 

0.001 

0.002 

-1.64 

-0.40 

-0.19 

-0.74 

0.000 

Interpretation of the penetration index 

The penetration index can be viewed as a measure of consumer propensity to 
invest  in  a  PPP.  The  penetration  index  can  be  used  to  compare  the  market 
performance of a PPP product within a Member State and across Member States. The 
relative  performance  of  a  PPP  will  mainly  be  driven  its  capacity  to  capture  available 
savings. In a sense, it provides a measure of the propensity of consumers to invest in 
a given PPP.  

The  main  driver  of  consumer  choice  when  it  comes  to  PPP  investment 
appears to be tax incentives. Error! Reference source not found. examines the 
determining factors of consumer investment in a PPP. According to this analysis, when 

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tax incentives increase by 1%, the penetration index (or the propensity to consume a 
PPP) gains 6 points on average.  

The PPP features  are also important,  but to a lesser  extent.  In Member States 
where there are several PPPs it was assumed that differences in market performance 
where due to product features deemed superior by consumers. The average effects of 
the  features  on  PPP  market  performance  was  positive,  but  much  lower  than  the 
impacts  of  tax  incentives.  Having  product  features  deemed  superior  by  consumers 
increases the penetration index by 0.3 points.  

Key features of the personal pension products 
To  identify  the  key  features  of  PPPs  with  a  high  MPI,  the  following  analyses  were 
carried out: 

  We listed the features that appear the most frequently in the five products with 

the highest MPI; 

  These  features  were  then  categorised  into  “standard  features”  -  which  appear 
in a majority of products, whether or not they are successful -, and “distinctive 
features” – which seem to be linked to the success of a PPP; 

  We focused  on Member States  with several PPPs.  In these Member States the 
comparison  of  PPP  features  makes  it  possible  to  identify  those  conducive  to 
success. Indeed, these PPPs are subject to identical environmental and market 
conditions, so any differences in MPI may be attributed to product features. 

Features common to the products with a high MPI 

Table 21 presents the features shared by the five PPPs with the highest MPI for which 
information has been collected. A feature is said to be common to the most successful 
when it is shared by at least 3 PPPs with a high MPI. 

Table 21: Common features of products with the highest MPI 

Coded name  Belgium 

Accumulation features 

No limitation on holder age for 
subscription 

Minimum number of years to 
retirement is not a condition 
for the purchase of the product 

Duration of in-payments not 
limited to a time period 

No mandatory minimum of in-
payments required each year 
or month 

Possibility of changing the 
level of in-payments or of 
taking a break 

Multiple investment strategy 
available 

The product allows for 
choosing a more aggressive or 
defensive investment strategy 

It is possible to change the 
investment strategy during the 
lifetime of the product 

s
t
n
e
m
y
a
p
-
n
I

t
n
e
m
t
s
e
v
n
I

y
g
e
t
a
r
t
s

PP 

× 

× 

× 

× 

× 

× 

× 

Denmark 
RP 

Germany 
Riester 

Austria  
PZV 

Spain 
IPP 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

x 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

June 2017 202 

 
 
 
 
 
 
 
 
 
 
 
 
 
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Coded name  Belgium 

PP 
× 

× 

× 

× 

× 

× 

× 

Denmark 
RP 
× 

Germany 
Riester 
× 

× 

× 

× 

× 

× 

× 

× 
optional 

× 
optional 

Austria  
PZV 
× 

× 

Spain 
IPP 

× 

× 

× 

× 
optional 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

× 

×  

× 

× 

×  

× 

×  

× 

× 

× 

× 

 × 

June 2017 203 

De-risking investment option 
close to retirement age 

The product provides for 
guaranteed capital 

Guaranteed minimum return 

The product could provide 
death coverage 

The product provides disability 
allowance 

f
o
n
o
i
t
a
g
i
t
i

M

k
s
i
r
n
r
u
t
e
r

Decumulation features 

Early out-payments possible 

There is a minimum age limit 
for the start of the 
decumulation phase 

No unique mandatory option 

s
c
i
t
s
i
r
e
t
c
a
r
a
h
c

t
n
e
m
y
a
p
-
t
u
O

Domestic switching features 

f
o
g
n
h
c
t
i

i

w
s

s
r
e
d
i
v
o
r
p

c
i
t
s
e
m
o
D

Switching providers in the 
same Member State without 
any tax impact 

Distribution features 

l
e
n
n
a
h
c

n
o

i
t
u
b
i
r
t
s
i
D

e
c
i
v
d
A

Banks 

Insurance network 

Advice is available to 
individuals online 

Cross-border activity features  

r
e
d
r
o
b
-
s
s
o
r
C

y
t
i
l
i

b
a
t
r
o
p

Switching to providers in 
another Member State without 
any tax impact 

Being a national of the 
relevant Member State or 
having a physical address in 
the Member State is not a 
requirement to buy the 
product 

Treatment of providers’ features 

Providers from other Member 
States/EEA are allowed to sell 
the PPP 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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PPP standard features  

Some features are “standard”, in the sense that they are present in more than 65% of 
the PPPs irrespective of their MPI score.  

Table 22: Description of the features common to a majority of PPPs 
Product life cycle  
Accumulation  

Standard features  

 
 

 
 

 
 

 
 

 
 
 
 
 
 
 
 
 

 

Decumulation 

Distribution 

Cross-border activity 

Products do not limit the holder age for subscription 
There  is  no  condition  regarding  the  minimum  number  of  years  to 
retirement for the purchase of the product  
The duration of in-payments is not limited to a time period  
There  is  no  mandatory  minimum  in-payments  required  per  year  or  per 
month 
Possibility of taking a break in making in-payments 
Products  allow  for  choosing  a  more  aggressive  or  defensive  investment 
strategy 
Some products provide a guaranteed capital 
Possibility  of  changing  the  investment  strategy during  the  lifetime  of  the 
product 
There is a minimum age limit for the start of decumulation phase  
Products have no mandatory unique option for decumulation 
Products with death coverage 
It is possible to switch provider within a Member State 
The main distributors of the product are insurers and pension funds 
Providers from other Member States/EEA are allowed to sell the PPPs  
Advice is available to individuals online 
It is mandatory for distributors to provide advice with the product 
Being  a  national  of  the  relevant  Member  State  or  having  a  physical 
address in the Member State is not a requirement to buy the product 
It is possible to switch to a provider in another Member State 

These  features  should  not  be  ruled  out  as  key  features.  They  may  be  determining 
factors in explaining a high MPI score. 

For example in Spain, IPP, the product with the highest MPI, provides a guarantee on 
capital  contrary  to  PPA  and  MP  products  which  have  a  lower  MPI.  In  Germany,  the 
Riester  PPP  allows  the  switching  of  providers  in  the  same  Member  State  with  no  tax 
impact. On the other hand, Rürup, which  does not have such a high MPI score, does 
not allow switching.  

Also, it seems that having multiple options for decumulation has an impact on the MPI 
score of a PPP, since in Germany and France the products with the highest MPI score 
include this feature, contrary to the other products of those countries. 

It can be noted that in France, the PPP with the highest MPI – PERP does not require 
any  minimum  in-payments  upon  subscription  and  allows  the  interruption  of  in-
payments, contrary to PPP Madelin, with a lower MPI score.  

According  to  the  key  features  proposed  by  EIOPA,  a  suitability  assessment  of 
investment  options  and  personalised  advice  may  be  required.  For  most  of  the  PPPs 
studied,  in  order  for  distributors  to  be  able  to  provide  the  product,  the  provision  of 
advice is mandatory. 

While  cross-border  activity  is  not  common  in  2016;  being  a  national  of  the  relevant 
Member  State  or  having  a  physical  address  in  the  Member  State  is  generally  not  a 
requirement for buying a product. Moreover, 29 out of 49 products allow switching to 
a  provider  in  another  Member  State  with  no  tax  impact.  (For  more  details  on 
switching, please refer to the section Domestic and cross-border switching) 

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PPP distinctive features  

The  comparison  of  the  features  of  more  successful,  successful  and  less  successful 
products makes it possible to determine the features that are conducive to success or 
failure:  a  key  feature  should  be  frequently  present  in  more  successful  products  or 
successful  products  and  scarcely  present  in  less  successful  PPPs.  Features  that  seem 
to be linked to a product’s success, i.e. that tend to appear  more frequently in more 
successful products than in less successful PPPs are as follows: 

Product life cycle  
Accumulation  

Decumulation 

Features  
An investment default option is available 
 
 
Products have a guaranteed minimum return on investment 
  De-risking investment option when approaching retirement 
 

It is possible to redeem funds before pension age 

It  appears  that  successful  products  are  more  reliable  and  cost-effective  than 
unsuccessful  products,  which  corroborates  the  qualities  that  a  PEPP  should  have 
according to EIOPA26. 

For  example  in  Germany,  Riester-Rente  offers  a  low  level  of  risk,  unlike  Rürup-rente 
which offers a medium level of risk.  

Having  a  guaranteed  minimum  return  seems  to  be  a  key  feature.  This  is  in  line  with 
EIOPA’s  advice;  a  default  option  may  contain  a  minimum  return  guarantee  -  this 
should  be  a  flexible  feature  adapted  to  national  requirements  with  respect  to  taxes 
and SLL.  

Regarding the de-risking investment option when  approaching  retirement, the results 
are  conclusive. Seven  more successful products  of the nine  covered  allow for a  more 
defensive  strategy  close  to  retirement  whereas  six  products  out  of  13    among  the 
successful and less successful products offer this feature. 

The  investment  default  option  that  should  be  a  mandatory  feature  for  a  PEPPP 
according to EIOPA seems to have a positive impact on the success of a PPP. However, 
the information collected provides weak support for this view.  

26 7 September 2015, Introducing a standardised Pan-European Personal Pension product (PEPP), EIOPA 

June 2017 206 

 
 
 
 
 
 
 
 
 
                                           
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Table 23: Rate computed on the PPP 

Low MPI score 

Medium MPI score  

High MPI score 

Investment default option available 

De-risking investment option approaching 
retirement 

Rate 

0% 

75% 

Guaranteed minimum return on investment 

25% 

Prod. 
Covered 

1 

4 

4 

Early out-payment possible 

50% 

12 

Rate 

43% 

33% 

75% 

25% 

Prod. 
Covered 

7 

9 

8 

Rate 

50% 

78% 

67% 

Prod. 
Covered 

6 

9 

9 

12 

75% 

12 

Among  the  products  with  the  highest  MPI  score,  an  investment  default  option  is 
available in PPPs from Belgium and Denmark. However this does not appear to be the 
case for Germany, Spain and Austria. 

Except in Austria, products with a high MPI score offer a guaranteed minimum return 
on investment.  

All five products allow pension savers to redeem funds before pension age.  

Focus on Member States that have more than one PPP 

The focus on Member States with more than one PPP corroborates the results above. 

Indeed,  in  Germany  and  France,  products  with  the  highest  MPI  score  have  a 
guaranteed return on investment contrary to other products.  

Likewise, in Germany, Italy and Portugal products with the highest MPI score allow the 
redemption of funds before retirement age, contrary to other products. 

Also, in Germany and Italy, most products with a medium MPI score allow switching to 
a provider in another Member State with no tax impact. On the other hand, transfer to 
another Member State is not possible for the other products. 

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Technical feasibility assessment (6) 

Practical implementation aspects  
Further  to  the  tax  mapping  presentation  and  analysis  of  the  taxation  regimes,  and 
clustering according to the products’ key features (1), the presentation and analysis of 
the  tax  regimes  (4)  and  the  determination  of  the  features  of  personal  pension 
products with the highest MPI (3), as well as the PPP market overview (2), a workshop 
was organised by the European Commission and EY to obtain the views of supply-side 
and  demand-side  stakeholders  on  the  potential  features  of  a  pan-European  personal 
pension product (hereafter “PEPP”), in order to make a final assessment (6). 

From a methodological standpoint, the main purpose of the workshop was to confirm, 
from  a  supply  and  demand  perspective,  what  the  relevant  features  and  overall 
architecture of the PEPP would be, in the view of various stakeholders. 

After  a  brief  presentation  of  the  workshop  sessions,  this  report  will  present  the 
outcomes  of  the  discussions  held  with  the  different  stakeholders  and  will  result  in  a 
presentation  of  the  preferred  PEPP  features  from  supply  and  demand  side 
perspectives.  An  analysis  of  these  features  in  terms  of  added  value  compared  to  the 
personal pension products currently available in the EU will then be presented. 

The  preferred  PEPP  features  according  to  the  results  of  the  workshop  are  then 
compared  with  the  features  of  the  personal  pension  products  with  the  highest  MPI 
described later in this report. 

After  this  first  assessment,  the  feasibility  study  will  include  the  review  of  the  tax 
obstacles  that  could  result  depending  on  which  preferred  PEPP  features  are  selected. 
The  different  approaches  discussed  aim  to  make  it  easier  for  consumers  to  benefit 
from  tax  relief  during  the  accumulation  phase.  Then  the  preferred  PEPP  features  will 
be  compared  to  the  current  PPP  features  in  order  to  determine  any  conflicting  PEPP 
features  that  could  potentially  prevent  consumers  from  benefiting  from  tax  relief 
during the accumulation phase.  

To  conclude,  suggestions  are  made  concerning  the  adaptation  of  certain  preferred 
features  and  these  adjusted  features  are  assessed  compared  to  the  current  PPP 
features. Then an approach for establishing a PEPP framework will be suggested. 

Finally, based on the PPP Market overview (2) described above the report will present 
an assessment of the market potential for a PEPP in the EU. 

Presentation of the preferred PEPP features according to stakeholders, based 
in particular on the workshop results 

Presentation  of  the  preferred  PEPP  features  from  supply  and  demand  side 
perspectives 

Brief presentation of the workshop 

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A workshop  was held on  15 March 2017, to  obtain the  views of the  following  various 
stakeholders (see Error! Reference source not found.): 

Banks, 
Asset managers, 
Insurers, 
Regulators, 
Consumer representatives. 

- 
- 
- 
- 
- 
This  workshop  was  organised  by  EY  and  the  European  Commission  and  consisted  of 
five sessions, each divided into three sub-sessions: 

- 

- 

- 

- 

- 

1. Accumulation 
o 
o 
o 

Session 1.1. In-payment characteristics and time horizon 
Session 1.2 Investment strategy 
Session 1.3 Mitigation of risk 

Sessions  2.1  and  2.2.  Out-payment  characteristics  and  investment 

2.Decumulation 
o 
strategy 
o 

Session 2.3 Domestic switching between providers 

3. Distribution  
o 
o 
o 

Session 3.1 Transparency 
Session 3.2 Distribution channels 
Session 3.3. Advice 

4. Tax aspects 
o 
o 

Sessions 4.1 and 4.2 Taxation aspects 
Session 4.3 Cross-border portability 

5. Treatment of providers 
o 
o 

Sessions 5.1 and 5.2 Authorisation and supervision 
Session 5.3 Prudential requirements 

The  objective  of  this  workshop  in  the  context  of  our  feasibility  study  was  to  obtain 
stakeholder views and assess the potential of the PEPP from a market perspective, on 
both  supply  and  demand  sides.  Moreover,  the  objective  was  to  collect  the  opinion  of 
stakeholders on the need for a PEPP and the advisability for the European Commission 
to launch such an initiative and to help determine what the key characteristics of the 
PEPP should be, notably in order to ensure its success. 

Indeed,  the  success  of  the  PEPP,  and  in  this  respect  its  flexibility,  is  primarily 
determined  by  the  fact  that  some  providers  are  in  a  position  to  produce  and  /  or 
distribute  the  PEPP.  In  addition,  the  PEPP  should  have  sufficiently  attractive  features 
to appeal to potential consumers.  

The aim of the workshop was therefore to test the  potential  main features of a PEPP 
that  could  be  relevant  from  the  perspective  of  the  main  stakeholders.  Therefore,  the 
goal  of  the  workshop  was  to  gather  all  the  views  of  stakeholders  on  key  topics  by 
determining specific features that could be incorporated into a PEPP framework. 

June 2017 209 

 
 
 
 
 
 
 
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The  various  sessions  were  based  on  the  findings  of  the  EY  study  and  EIOPA’s  advice 
on the development of an EU Single Market for personal pension products (PPP) dated 
4  July  2016.  The  following  section  presents  the  results  of  each  session  based  on  the 
position expressed by the attendees from both supply and demand sides. 

The workshop minutes are attached in Error! Reference source not found.. 

Results of the various workshop sessions 

Sessions on accumulation aspects 

Session 1.1. “In-payment characteristics and time horizon” 
In  the  context  of  our  study,  in-payments  are  the  contributions  paid  by  the  pension 
saver  or  another  person  (mainly  the  saver’s  employer  or  the  State)  from  the 
subscription of the contract to the start of the decumulation phase or the termination 
of the contract (i.e., during the accumulation phase).  

The  session  aimed  to  identify  the  level  of  flexibility  of  the  in-payment  features.  In-
payment  features  include  the  minimum  level  of  in-payments,  the  possibility  of 
interrupting  the  in-payments,  the  age  limit  for  starting  the  accumulation  phase,  and 
the  minimum  accumulation  period.  These  features  could  potentially  be  fully  flexible 
(i.e.,  their  regulation  could  be left  up  to  Member  States  or  decided  at  provider  level) 
or  subject  to  the  harmonisation  of  the  principles  applicable  to  this  feature  or  to  full 
harmonisation at EU level.  

In-payment  flexibility  at  EU  level  could  allow  better  adaptation  of  the  PEPP  to  the 
existing local tax regime and reinforce the attractiveness of the product. However, to 
achieve this objective of a better investment return, the more the in-payment features 
are  harmonised,  the  more  economies  of  scales  are  realised.  Additionally,  the 
harmonisation of in-payment features could ensure that the PEPP meets a retirement 
objective and a proper level of savings.  

The main points discussed relate to the following topics: 

-  Continuity: is it possible to change the level of in-payments? 
-  Supplementary in-payments by the employer or by the State? Should this be 

allowed? 

-  Maximum age limit to start the accumulation phase? 

The following questions were asked during the workshop: 

-  Do you think that pension savers should be able to change the level of in-

payments? 

-  Do you think that a minimum in-payment to be paid into the PEPP each 

month/year should be mandatory? 

-  Should supplementary in-payments by the employer or by the State be 

allowed? 

-  What should the maximum age limit be to start the accumulation phase? 

The  results  of  the  sessions  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

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Study on the feasibility of a European Personal Pension Framework 

Features 

Positions expressed during the workshop 

Supplementary in-payments by 
State and/or employer 

Flexible feature: all attendees agreed that the EU framework should 
provide for the possibility for Member States to allow in-payments by 
the employer or by the State. 

Minimum in-payments 

Possibility of taking a break 

Age limit for the start of the 
accumulation phase 

Minimum number of years of 
accumulation 

Flexible  feature:  all  attendees  agreed  that  there  should be  no  limit 
set  at  EU  level  but  that  the  PEPP  framework  should  provide  for  the 
possibility for providers to set up minimum in-payments. 
Harmonised feature: all attendees agreed that the PEPP framework 
should  be  harmonised  in  this  respect  and  that  the  consumer  should 
have the possibility of taking a break. 
Flexible  feature:  all  attendees  agreed  that  there  should  be  no 
maximum  age  limit  set  at  EU  level  but  that  the  PEPP  framework 
should  provide  for  the  possibility  for  providers  to  include  this  in  the 
general terms and conditions of the contract. 
Flexible  feature:  This  feature  was  not  discussed  during  the 
workshop  but  based  on  EY  findings  and  given  the  distinctive 
approaches  adopted  by  Member  States  on  this  topic,  the  PEPP 
framework  should  not  harmonise  this  aspect.  Providers  should  have 
the possibility of setting such a minimum duration. 

Possibility of changing the level of in-payments 

There  was  a  consensus  on  this  issue  from  supply  and  demand  sides.  Indeed,  the 
attendees considered that pension savers should be able to choose whether to change 
the level of in-payments.  

In  practice,  stakeholders  agreed  that  the  EU  framework  should  be 
harmonised in this respect and expressed the view that the consumer should 
have the possibility of changing the level of in-payments. 

No minimum in-payments to be paid each month/year into the PEPP 

This question also resulted in a consensus. All the attendees considered that there is a 
need  for  a  high  level  of  flexibility  at  EU  level.  However,  limits  should  be  fixed  at 
provider level, notably depending on the guarantees provided.  

Stakeholders would prefer the EU framework to be flexible in this respect and 
only harmonised in terms of principles, i.e. stakeholders requested that there 
should be no limit set at EU level but the PEPP framework should provide for 
the possibility for providers to set up a minimum in-payment. 

Supplementary in-payments by the employer or by the State allowed 

Once again, there was  a consensus  on this issue. Attendees  were in favour  of a high 
level of flexibility at EU level. This topic should be left up to the Member States.  

Stakeholders would prefer the EU framework to be flexible in this respect and 
only harmonised in terms of principles, i.e., there should be no prohibition at 
EU  level,  but  the  PEPP  framework  should  provide  for  the  possibility  for 
Member States to allow in-payments by the employer or by the State. 

No maximum age limit to start the accumulation phase 

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There  was  no  clear  consensus  on  the  need  to  include  such  a  feature  in  a  PEPP 
framework.  However,  as  the  PEPP  is  a  product  with  a  retirement  objective,  all 
attendees agreed on the fact that natural age limits should apply and that in any case, 
this  limit  should  at  least  be  defined  by  providers  (providers  would  not  accept  people 
past a certain age). In  fine, a  majority of stakeholders  do not recommend regulation 
on this issue at EU level. 

Stakeholders would prefer the EU framework to be flexible in this respect and 
only harmonised in terms of principles, i.e. there should be no maximum age 
limit set at EU level but the PEPP framework should provide for the possibility 
for  providers  to  include  this  in  the  general  terms  and  conditions  of  the 
contract. 

No mandatory minimum number of years of accumulation 

This  topic  was  not  discussed  during  the  workshop.  However,  based  on  EY  findings 
concerning  a  similar  feature,  a  minimum  holding  period,  it  should  be  noted  that  in 
certain  Member  States  or  at  provider  level  (such  as  Belgium;  for  an  example  of 
legislation limitation see Table 9: Results of Clustering A), a minimum number of years 
of accumulation could be provided for either by regulation or by the providers.  

Given  the  distinctive  approaches  adopted  by  Member  States  or  at  provider 
level  on  a  minimum  number  of  years  of  accumulation,  the  EU  framework 
should not harmonise this aspect, i.e. not provide for or forbid any mandatory 
duration. The providers should have the possibility of setting such a duration 
in accordance with the local context.  

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Session 1.2 “Investment strategy during accumulation” 
The purpose of this session was to determine the preferred level of flexibility level with 
regard  to  investment  strategy.  In  the  context  of  the  workshop,  the  flexibility  of  the 
investment  strategy  during  the  accumulation  phase  was  defined  as  the  possibility  for 
consumers  to  choose  the  investment  strategy  most  adapted  to  their  situation  (active 
or  defensive).  This  possibility  should  be  clearly  promoted  in  order  to  reinforce  the 
attractiveness  of  the  product.  However,  taking  into  account  the  retirement  objective 
and  the  need  to  protect  the  consumer,  this  possibility  may  be  restricted  and  a  limit 
may be set at EU level.  

Investment  strategy  features  include  the  investment  strategies  proposed  to  the 
consumer, the existence of a default investment option and the possibility of changing 
the  investment  strategy  during  the  lifetime  of  the  product.  These  features  could 
potentially be fully flexible, leaving it up to Member States or providers, or subject to 
harmonisation of the principle or to full harmonisation at EU level.  

The main points discussed relate to the following topics: 

- 

Possibility of changing the investment strategy during the lifetime of the 
product or possibility of adopting a more defensive strategy close to the 
retirement age. 

-  Whether there should be a clear link between investment strategy and 

retirement objective. 

-  Whether there a default investment option is needed. 

The following questions were asked during the workshop: 

-  Do you think that the PEPP should provide multiple investment options? If so, 

should there be a default investment option? 

-  Do you think that the PEPP should allow for a change in the investment 

strategy? 

The  results  of  the  sessions  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

Features 

Multiple investment options 

Default investment option 

Positions expressed during the workshop 
Harmonised feature in terms of principles: all attendees agreed 
that  there  should  be  no  defined  investment  options  set  at  EU  level 
but  that  the  PEPP  framework  should  allow  the  providers  to  offer 
multiple investment options in accordance with advice. 

Harmonised  feature  in  terms  of  principles:  there  should  be  no 
default  investment  option  defined  at  EU  level  but  the  PEPP 
framework  should  provide  that  such  a  default  option  should  be 
offered to the consumer by the PEPP providers. 

Possibility of changing the 
investment strategy during the 
lifetime of the PEPP 

Harmonised feature in terms of principles: all attendees agreed 
that  the  EU  framework  should  allow  changes  to  the  investment 
strategy  but  with  limitations  regarding  frequency  and  schedule, 
which  should be decided at provider level. 

Multiple investment options  

Regarding  investment  options,  all  attendees  agreed  that  the  PEPP  should  offer 
different options, and that: 

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-  Multiple investment options make the product more attractive (PPPs are 

currently designed in this way); and 

-  More options do not imply higher costs for providers. 

The offer should be adapted to the consumer profile and several  option profiles could 
be  considered  (conservative  with  low  risk  (default  option),  more  aggressive  strategy 
etc.). 

Regarding the default investment option, all attendees agreed that this option should 
include  a  simple,  safe  default  option  with  a  de-risking  strategy,  as  this  is  crucial  for 
consumer  protection,  especially  in  the  case  of  consumers  who  are  not  financially 
literate. 

The  EU  framework  should  be  flexible  in  this  respect  and  only  harmonised  in 
terms of principles, i.e. there should be no defined investment options set at 
EU  level,  but  the  PEPP  framework  should  provide  for  the  possibility  for 
providers to offer multiple investment options in accordance with advice. 

Default investment option 

There was no consensus on what the default investment option should be, whether the 
product  should  include  a  default  option  that  guarantees  capital  in  real  terms  or 
whether the product should maintain the value of the investment. 

Regarding  design,  some  attendees,  notably  insurers’  representatives,  argued  that  a 
life-cycling  strategy  with  de-risking  close  to  retirement  could  be  the  default  option. 
However,  a  consensus  arose  on  the  need  for  consumers  to  have  the  possibility  of 
choosing a default option. 

Lastly, the need for advice associated with a default option was also debated but with 
no clear consensus.  

The  EU  framework  should  be  flexible  in  this  respect  and  only  harmonised  in 
terms of principles, i.e. there should be no default investment option defined 
at EU level, but the PEPP framework should provide that such a default option 
should be offered to the consumer. 

Limited change in the investment strategy 

Regarding  the  possibility  of  changing  the  investment  strategy  during  the  life-time  of 
the  product,  attendees  agreed  that  changes  in  the  investment  strategy  should  be 
limited to a specific frequency or schedule.  

Regarding  the  costs  of  changing  investment  strategy,  it  was  mentioned  during  the 
workshop  that  currently  a  fee  is  not  systematically  charged,  and  that  for  some 
products, costs and fees are fixed before signing the contract. Then the client is aware 
of the cost of changing the investment strategy and the provider is not able to modify 
the amount of fees during the lifetime of the product. 

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The  EU  framework  should  be  flexible  in  this  respect  and  only  harmonised  in 
terms of principles, i.e. changes in the investment strategy should be allowed 
subject  to  limitations  regarding  frequency  or  schedule  defined  at  EU  level, 
but  the  PEPP  framework  should  not  provide  for  this  frequency  or  schedule 
which should be decided at provider level. 

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Session 1.3 “Mitigation of risk” 
The purpose of this session was to determine how risks could be mitigated in the PEPP 
through  minimum  capital  guaranteed,  risks  borne  by  the  consumer,  death  coverage 
and/or  disability  coverage.  These  features  could  potentially  be  fully  flexible,  at  the 
discretion of Member States or providers, or subject to harmonisation of the principle 
or to full harmonisation at EU level.  

Two considerations have to be reconciled:  

-  Consumer protection: investors need to know what the level of risk is and if the 
invested  funds  are  guaranteed,  what  the  expectation  on  return  could  be  and 
what happens in the event of death or disability. 

-  Constraints  on  providers:  the  greater  the  consumer  protection,  the  higher  the 
cost  of  the  product  and  the  more  the  provider  will  have  to  comply  with  high 
prudential requirements.  

The main points discussed relate to the following topics: 

-  Whether or not the PEPP should provide a capital guarantee? 
-  Whether or not the PEPP should provide a minimum guaranteed return? 
-  Whether or not the PEPP should provide death and disability coverage? 

The following questions were asked during the workshop: 

-  Should the PEPP framework provide for a capital guarantee? 
-  Should the PEPP framework provide for a minimum guaranteed investment? 
-  Should the PEPP framework provide for disability and/or death coverage? 

The  results  of  the  sessions  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

Features 

Positions expressed during the workshop 

Guaranteed capital 

Minimum guaranteed investment 

Disability coverage 

Death coverage 

Harmonised  feature  in  terms  of  principle:  the  stakeholders, 
notably  banking  institutions  and  asset  managers,  agreed  that  the 
PEPP  framework  should  prohibit  a  full  capital  guarantee.  Providers 
should be allowed to provide other types of guarantee. 

Flexible feature: all attendees agreed that the EU framework should 
be flexible by not including a minimum guaranteed investment in the 
PEPP  framework.  Providers  should  be  allowed  to  provide  other  types 
of guarantee. 

Harmonised feature: the stakeholders, notably asset managers, are 
not  in  favour  of  the  inclusion  of  a  disability  coverage  in  the  PEPP 
framework.  The  EU  framework  should  be  harmonised  by  prohibiting 
disability coverage in the PEPP features. 
Harmonised  feature:  The  stakeholders  agreed  that  the  EU 
framework  should  be  harmonised  in  this  respect.  Death  coverage 
should be offered as an option to the consumer. 

The PEPP framework should not provide for guaranteed capital 

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Stakeholders, notably banking institutions and asset managers, agreed that the PEPP 
framework  should  not  provide  for  a  capital  guarantee  that  could  lead  to  excluding 
certain potential providers. 

It  should  be  noted  that  during  the  workshop,  the  various  stakeholders  agreed  that  a 
minimum feature to be included in the PEPP framework is for the provider to pay back, 
at the termination of the contract, the amount of the contribution paid by the pension 
saver, less the costs borne by the provider. 

The EU framework should be harmonised in terms of principle in this respect 
by prohibiting a full capital guarantee in the PEPP features. Providers should 
be allowed to provide other types of guarantee.  

The  PEPP  framework  should  not  provide  for  a  minimum  guaranteed 
investment 

The stakeholders’ view, on supply and demand sides, is that such a feature should not 
be included in the PEPP framework as: 

-  Such a guarantee could not be provided given the current economic context 

and without a minimum holding period; 

- 

In any case, such a guarantee would involve an excessive price and would not 
be proportionate to the replacement return objective; 

-  There is no need for such a feature: the consumer could switch between 
multiple providers and this possibility should lead to natural competition 
between providers and a better level of return on investment. 

The  EU  framework  should  be  flexible  in  this  respect  by  not  including  a 
minimum  guaranteed  investment  in  the  PEPP  features.  Providers  should  be 
allowed to provide other types of guarantee.  

No disability coverage  

Based on the views expressed during the workshop, disability coverage should not be 
included in the PEPP framework, even as an option, as: 

-  There is no common definition of disability coverage, 
- 

Including such a feature, even as an option, could lead to switching issues. 

The  EU  framework  should  be  harmonised  in  this  respect  by  prohibiting 
disability coverage in the PEPP features. 

Death coverage should be offered as an option to the consumer 

Views  differed  regarding  death  coverage.  Some  stakeholders,  mainly  non-insurer 
providers,  were  not  in  favour  of  the  inclusion  of  this  feature  in  the  PEPP  framework, 
even  as  an  option,  because  there  is  a  possibility  of  separate  contracts.  Some 
stakeholders,  mainly  representatives  of  consumers  and  insurers,  considered  that  this 
feature should be optional in order to allow the PEPP to be competitive vis-à-vis other 
national PPPs and to ensure a good level of consumer protection.  

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However, stakeholders on both sides agreed that this aspect should be harmonised at 
EU  level  in  order  to  ensure  the  portability  of  the  product.  A  consensus  arose  on  the 
need for consumers to be able to choose this option when offered by the provider. 

The  EU  framework  should  be  harmonised  in  this  respect  and  provide  that 
death coverage should be offered to the consumer as an option. 

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Sessions on decumulation aspects 

Sessions 2.1 and 2.2 “Investment strategy and out-payment characteristics” 
The  purpose  of  these  sessions  was  to  determine  the  level  of  flexibility  of  the  PEPP 
during  the  decumulation  phase.  Out-payment  features  include  the  decumulation 
options proposed to the consumer, the minimum duration of the decumulation phase, 
and potential death and/or disability coverage proposed.  

Early out-payment features were discussed during this session. However, it was noted 
that these features mainly relate to the accumulation phase.  

These features could potentially be fully flexible, at the discretion of Member States or 
providers,  or  subject  to  harmonisation  of  the  principle  or  to  full  harmonisation  at  EU 
level.  

The main points discussed relate to the following topics: 

-  Mandatory or no mandatory decumulation option 
-  Minimum or no minimum duration of the decumulation phase 
-  Whether the level of out-payments should be fixed at the time of subscription 
-  Death and/or disability coverage 
-  Possibility to redeem funds 
-  Adequacy in relation to the product’s retirement objective  
- 

Investment strategy during the decumulation phase 

The following questions were asked during the workshop: 

-  Do you think the PEPP framework should provide a mandatory decumulation 

option (annuities, lump sum, combination of lump sum and annuities, 
drawdown payments, other) or do you believe that a default option is 
sufficient? 

-  Should early out-payments be allowed? 
-  Should death and disability coverage be provided? 
-  Should the investment strategy during decumulation be active or defensive? 
The  results  of  both  sessions  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

Features 

Positions expressed during the workshop 

Decumulation options 

Minimum duration of 
decumulation phase 

Early out-payments 

Death and disability coverage 

Investment strategy during 
decumulation 

Flexible  feature:  there  was  no  consensus  regarding  decumulation 
options; all attendees agreed that this topic should not be harmonised 
and  that  out-payment  characteristics  should  not  be  included  in  the 
PEPP framework. 

Flexible feature: as harmonisation is not possible given the diversity 
of  the  Member  State  regulations,  stakeholders  agreed  that  this 
decumulation feature should not be harmonised. 

Harmonised  in  terms  of  principles:  the  majority  of  stakeholders 
agreed  that  the  EU  framework  should  allow  early  out-payments  only 
in limited situations.  
Harmonised  feature:  the  stakeholders’  views  are  in  line  with  the 
positions expressed during session 1.3. 
Flexible  feature:  attendees  agreed  that  this  topic  should  not  be 
harmonised in the EU framework.  

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No mandatory decumulation option  

The  following  objections  were  made  by  non-insurer  providers  and  consumer 
associations to the proposal to allow only one form of out-payments, i.e. to allow only 
annuity out-payments:  

-  This will limit the type of providers allowed to sell the product (i.e. insurers, if 

only life-long annuity out-payments are allowed) 

-  Other forms of out-payments should be possible in order to allow the PEPP to 

be competitive in the national market and to easily benefit from tax incentives 
on out-payments based on national rules decided by Member States. 

A  consensus  arose  that  out-payment  options  should  not  be  harmonised  in  the  PEPP 
framework. 

Regarding  a  default  option,  the  stakeholders  underlined  that  there  is  a  strong  link 
between  the  default  option  proposed  and  the  need  for  individualised  advice  for  the 
pension saver, notably if different tax regimes are applicable in a given Member State, 
depending on the chosen characteristics of the decumulation option.  

Thus  it  might  not  be  possible  to  determine  the  best  decumulation  option  for  all 
pension savers, given the constraints to which Member States and pension savers may 
be subject.  

The  EU  framework  should  not  be  harmonised  in  this  respect.  Out-payment 
characteristics should not be included in the PEPP framework. 

No minimum duration/holding period provided at EU level 

The stakeholders’ view, on supply and demand sides, is that it is necessary to educate 
consumers,  who  generally  underestimate  their  needs  in  terms  of  retirement 
replacement revenues.  

Regarding the appropriateness of including this characteristic at EU level, stakeholders 
indicated  that  harmonisation  is  not  possible,  given  the  diversity  of  Member  State 
regulations,  and  expressed  the  view  that  this  decumulation  feature  should  not  be 
harmonised. 

The  EU  framework  should  not  be  harmonised  in  this  respect.  A  minimum 
holding period should not be included in the PEPP framework. 

Early out-payments allowed subject to limitation 

As a preliminary remark, it was noted that this feature is related to  the accumulation 
phase. 

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Stakeholders,  from  both  supply  and  demand  sides,  generally  agreed  that  early  out-
payments should be allowed only in limited cases to be defined and discussed further, 
as  only  such  limitations  will  ensure  the  achievement  of  the  long-term/retirement 
objective of the product. 

Certain  insurer  representatives  suggested  that  early  out-payments  could  be  allowed 
only after a minimum investment period. 

Based on the results of the workshop, the EU framework should be flexible in 
this  respect  and  only  harmonised  in  terms  of  principles,  i.e.  early  out-
payments  should  be  allowed  subject  to  limitation.  The  limitations  were  not 
defined during the session. 

Death and disability coverage provided  

The results are presented in the section on session 1.3 

No EU regulation on the investment strategy during decumulation  

During the session, the discussion focused  on withdrawal plans and not on  any other 
out-payment  characteristics.  Indeed,  in  the  case  of  withdrawal  plans,  a  pot  remains 
and  it  continues  to  be  invested  and  managed  in  the  same  way  as  during  the 
accumulation phase. 

Generally, the stakeholders were not in favour of the inclusion of this aspect in the EU 
framework. It should not be a PEPP feature, and there should be no harmonisation of 
the out-payment characteristics. It should be decided either at Member State level or 
at provider level. 

The EU framework should not be harmonised in this respect.  

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Session 2.3 “Domestic switching between providers” 
The  purpose  of  this  session  was  to  determine  the  level  of  flexibility  with  regard  to 
switching in the PEPP framework. In the context of the workshop, domestic switching 
was  defined  as  the  possibility  for  a  non-mobile  pension  saver  to  transfer  its 
investments  to  another  provider  in  the  same  Member  State.  Domestic  switching 
features  notably  include  switching  possibilities,  switching  limitations,  switching  costs 
and practicalities of switching. These features could potentially be fully flexible, at the 
discretion of Member States or providers, or subject to harmonisation of the principle 
or to full harmonisation at EU level.  

The main points discussed relate to the following topics: 

-  Switching only allowed according to a specified frequency or schedule, or 

possible at any time, without limitations 

-  High costs or restrictions, no costs, or low/capped costs 
-  Adequacy with respect to illiquid long-term investment or unfavorable 

interaction with illiquid long-term investment 

-  Limitations regarding providers or limitations relating to providers subject to 

different regulations (banking vs insurance) 
The following questions were asked during the workshop: 

-  Do you think that switching provider at domestic level should be decided at EU, 

Member State or provider level? 

-  Do you think that provider switching at domestic level during the accumulation 

phase should be possible at any time or possible according to a specified 
frequency, or limited? 

-  Do you think that switching should be free of charge, or that its cost should be 
low/capped, high in order to discourage switching, fixed or correlated to the 
amounts accumulated? 

-  Do you think that switching provider during decumulation should be allowed at 

European level, left to the discretion of each Member State or decided at 
provider level? 

The  results  of  the  session  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

Features 

Positions expressed during the workshop 

Switching possibility 

Harmonised  feature:  all  attendees  agreed  that  domestic  switching 
should be allowed at EU level.  

Switching limitations 

Switching costs 

Practicalities 

Harmonised in terms of principles: the majority of attendees were 
in  favour of  a  limitation  and  proposed  that  the  EU  framework  should 
allow switching after a mandatory minimum holding period. However, 
the  duration  of  this  period  should  be  left  up  to  Member  States  or 
providers. 

Harmonised  in  terms  of  principles:  the  majority  of  attendees 
agreed that the EU framework should provide that switching is subject 
to  a  cost-based,  capped  charge    for  the  consumer.  However,  the 
amount  of  the  cost  should  be  determined  at  Member  State  and 
provider level. 
Flexible  feature:  all  attendees  considered  that  switching  should  be 

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Switching during decumulation 

done  at  surrender  value,  without  being  in  favour  of  the  inclusion  of 
this aspect in the EU framework. 
Flexible  feature:  attendees  agreed  that  this  topic  should  not  be 
harmonised  in  the  EU  framework  and  should  be  decided  at  provider 
level.   

Domestic switching regulated and allowed at EU level 

All  attendees,  from  both  supply  and  demand  sides,  emphasised  the  need  for  a  real 
possibility  of  switching  and  agreed  that  this  issue  must  be  regulated  at  EU  level. 
Switching must be explicitly allowed. 

The  EU  framework  should  be  harmonised  in  this  respect  and  domestic 
switching should be allowed at EU level. 

Switching limited by a mandatory minimum holding period 

For  certain  stakeholders,  mainly  consumer  associations,  switching  should  be  possible 
at any time. However, the majority of attendees highlighted the need for limitation in 
order to ensure a good level of investment return. 

Based  on  the  workshop  discussions,  it  might  be  recommended  to  limit  the  switching 
possibility  by  means  of  a  mandatory  minimum  holding  period  with  a  given  provider. 
Without  such  limitation,  switching  should  only  be  possible  at  a  cost  or  subject  to  a 
penalty in order to ensure achievement of the long-term investment objective and the 
sharing of risks.  

Based on the results of the workshop, the EU framework should be flexible in 
this  respect  and  only  harmonised  in  terms  of  principles.  Domestic  switching 
should  be  allowed  in  the  PEPP  framework  subject  to  a  mandatory  minimum 
holding  period.  However,  the  length  of  this  period  should  be  left  up  to 
Member States or providers. 

Domestic switching subject to a cost-based, capped charge 

Some  attendees  underlined  that  there  should  be  a  charge  for  switching  as  this 
operation creates disadvantages for other pension savers due to sharing of risks.  

The majority of attendees, from both supply and demand sides, agreed that switching 
should be subject to a cost-based, capped charge.  

Based on the results of the workshop, the EU framework should be flexible in 
this  respect  and  only  harmonised  in  terms  of  principles.  Domestic  switching 
should  be  allowed  in  the  PEPP  framework  subject  to  a  cost.  The  charge  for 
switching  for  the  consumer  could  be  defined  at  EU  level  as  cost-based  and 
capped. However, the cost amount should be determined at Member State or 
provider level.  

Switching at surrender value 

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All  attendees  considered  that  an  asset  transfer  is  too  limited  and  too  complex. 
Switching should be done at surrender value. 

No harmonisation on switching during decumulation 

This  question  resulted  in  a  consensus  from  all  attendees:  switching  during  the 
decumulation phase should be decided at provider level and not regulated at EU level. 

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Sessions on distribution aspects 

Session 3.1 “Transparency” 
Product  transparency  is  important  to  ensure  that  investors  are  well  informed  on  the 
product,  notably  its  objectives,  its  characteristics  and  its  risks.  It  contributes  to 
consumer confidence and it also allows investors to follow up on their PEPPs over time. 
The  main  specificities  of  the  PEPP  compared  to  other  investment  products  are  the 
often  long-term  nature  of  the  product,  and  the  two  phases  with  possible  different 
needs for the investor (accumulation/decumulation). 

The purpose of this session was to determine whether the transparency requirements 
should be generic (i.e., no need for additional or adapted EU regulations) or specific to 
the PEPP. 

The main points discussed relate to the following topics: 

-  Need to regulate this issue at European level or not 
-  Need to disclose all information regarding the PEPP (provider, description, risk, 

costs, etc.) 

-  Whether the starting point of the information should be the pre-contractual 

phase 

-  Quality of information (must be short and simple) 
The following questions were asked during the workshop: 

- 

Is there a need to regulate PEPP information disclosure at European level? 
Which EU regulations should be the starting point for disclosure during the pre-
contractual phase? 

-  Which information should be disclosed?  
-  Should a simplified information document be available for the PEPP? 
-  How and when should the information regarding the PEPP be communicated? 

The  results  of  both  sessions  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

Features 

Positions expressed during the workshop 

PEPP information disclosure 

Key information to be disclosed 

Frequency of information 
disclosure 

Harmonised  feature:  all  attendees  agreed  that  existing  EU  rules 
should be used as an inspiration. However, Member States should be 
allowed to impose additional information disclosure requirements. 

Harmonised  feature:  The  EU  framework  should  be  harmonised  in 
this respect. However, the key information to be disclosed needs to be 
discussed further. 

Harmonised  feature:  The  EU  framework  should  be  harmonised  in 
this  respect  and  information disclosure  should be  on  an  annual  basis 
after the pre-enrolment information has been provided. However, the 
content and format need to be discussed further. 

PEPP  information  disclosure  should  be  harmonised  at  European  level,  taking 
inspiration from current EU rules. 

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During the session, three main objectives were defined by the stakeholders from both 
supply and demand sides: 

Information disclosure should ensure comparability between PEPPs; 

- 
-  Portability and switching should be encouraged through information disclosure; 
-  The information disclosure document should be clear and simple. 

All  attendees  agreed  that  the  PEPP  information  disclosure  requirement  should  be 
regulated  at  European  level.  Moreover,  the  current  regulations  should  be  used  as  an 
inspiration.  

The following arguments were put forward: 

-  A cross-border product should allow a high degree of comparability between 

PEPPs; 

o  By regulating information disclosed at EU level, it should be possible to 

compare a PEPP with other foreign PPPs. 

o  Additionally, taking the current regulation into account in the 

construction of this EU framework might allow consumers to compare 
the PEPP with other personal pension products (in terms of price, 
performance scenarios, etc.). Lastly, comparability with other financial 
products could also be sought. However these comparability objectives 
are less important than the PEPP comparability objectives. 

-  Existing or already voted EU legislation is not sufficient in itself to ensure 

comparability between PEPPs but should be used as an inspiration in order to  

o  Ensure consistency of information disclosure between pension products,  

o  Simplify the work for providers (e.g. cost calculations should be 

harmonised) 

-  EU legislation on these aspects has not been completely transposed into 

national legislation and some points are still under discussion with the different 
stakeholders. 

The  EU  framework  should  be  harmonised  in  this  respect.  However,  Member 
States  should  be  allowed  to  impose  additional  information  disclosure 
requirements.  

Key information to be disclosed at EU level should be discussed further. 

The  stakeholders,  from  both  supply  and  demand  sides,  agreed  that  key  information 
such as the tax regime applicable, the start of the decumulation phase, and the form 
of out-payments should be included in the EU framework. 

However,  some  stakeholders  from  the  provider  side,  also  underlined  that  there  is  a 
need for a balance between harmonisation and local information disclosure aspects. 

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Regarding  tax  aspects,  the  stakeholders  underlined  that,  although  they  are  not 
covered  by  KIDs  and  PRIIPS,  the  latter  are  useful  to  compare  the  product  to  other 
available pension products in a given Member State. 

Regarding distribution costs, stakeholders, notably from the consumer side underlined 
that  the  actual  information  provided  within  the  KIDs  framework  is  not  sufficient  to 
ensure comparability. 

If  only  a  set  of  core  features  is  harmonised  at  EU  level,  one  option  discussed  during 
the workshop was to limit the information to be disclosed to: 

-  This set of core information harmonised at EU level;  

-  Other information that is not standardised but is needed for the sake of 

comparison (to be discussed and defined); and 

-  The other non-harmonised information will not be disclosed based on the PEPP 

framework but might be disclosed based on national rules. 

The  EU  framework  should  be  harmonised  in  this  respect.  However,  the  key 
information to be disclosed needs to be discussed further. 

A  simplified  information  document  communicated  before  enrolment  and 
thereafter on an annual basis 

All attendees, from supply and demand sides, agreed that there is a need for a single 
basic  document  for  the  PEPP  in  order  to  compare  products  issued  in  different 
countries. 

If  all  the  features  are  not  harmonised  at  EU  level,  there  should  actually  be  two 
documents or one document with two sections: 

-  One document that is the same for all PEPPs. This document should include the 
information regarding the general features of a PEPP defined at EU level (the 
features for which a product needs to obtain a PEPP passport) and all other 
comparable features; and 

-  One document containing the national features. 

The stakeholders, providers and consumer representatives defined two different times 
when 
information  disclosure  should  be  regulated  differently:  pre-enrolment 
information and information provided on an ongoing basis.  

-  Regarding pre-enrolment information disclosure, all the stakeholders agreed 

that the consumer must have a good understanding of the product. 
Additionally, it was underlined that comparing products that include different 
options will not be easy; and 

-  Disclosure should then be made on an annual basis since the relation between 

providers and consumers is critical. This should be a shorter document with the 
key information, setting out any changes to the product. Further discussion is 

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necessary on what comparable elements should be included in the annual 
disclosure. 

Stakeholders,  notably  from  the  provider  side,  underlined  that  different  means  should 
be allowed so as to be able to adapt the information disclosure to  the customer (e.g. 
paper) or to the distribution channel (e.g. online distribution, cross-border selling).  

The EU framework should be harmonised in this respect, with pre-enrolment 
information  disclosure  followed  by  annual  information  disclosure.  However, 
the content and format need to be discussed further. 

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Session 3.2 “Distribution channels” 
The  purpose  of  this  session  was  to  determine  the  specificities  required  for  the  online 
distribution  of  the  PEPP  and  also  to  discuss  general  distribution  aspects.  Online 
distribution  is  likely  to  become  an  increasingly  widespread  method  of  subscription. 
Indeed,  online  distribution  may  be  considered  to  be  one  of  the  preferred  distribution 
channels  for  cross-border  activities.  Moreover,  it  should  be  noted  that  online 
distribution may reduce distribution costs.  

The main points discussed relate to the following topics: 

Impacts of online distribution on the provision of advice 
Impacts of online distribution on the product features  

-  Possibility for online PEPP distribution 
- 
- 
-  Ways of keeping fees and costs proportionate 
The following questions were asked during the workshop: 

-  What should the PEPP’s main distribution channels be? 
-  What are the specific conditions for the online distribution of PEPPs? 
-  Should employers be able to distribute PEPPs? 
-  How should costs be kept proportionate? 

The  results  of  both  sessions  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

Features 

Distribution path 

Online distribution 

Employer distribution 

Distribution costs 

Positions expressed during the workshop 
Harmonised  in  terms  of  principles:  All  types  of  distribution 
channels should be allowed in principle. However, the existing EU and 
national regulations in this respect should also be applied. 
Harmonised  in  terms  of  principles:  Online  distribution  should  be 
expressly allowed in the PEPP framework.  
Regarding    advice  associated  with  online  distribution,  the  PEPP 
framework should limit the cases where advice is not mandatory 
Harmonised  in  terms  of  principles:  Distribution  by  employers 
should  be  allowed  in  principle.  However,  the  existing  EU  or  national 
regulations in this respect should also be applied. 
Flexible:  The  EU  framework  should  not  include  elements  on 
distribution costs. However, the existing EU or national regulations in 
this respect should also be applied. 

All distribution channels  

All participants,  providers  and  consumer  representatives,  agreed  that  there  would  be 
no  benefit  in  restricting  the  number  of  players:  all  distribution  channels  must  be 
considered.  

The  workshop  attendees  discussed  and  agreed  on  the  following  list  of  possible 
providers:  

Insurers 

 
  Banks 
  Broker agents 
  Asset managers 
  Pension funds: occupational pension funds should also be able to distribute the 

PEPP 

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  Employers 

Participants  warned  that,  while  there  is  no  reason  to  limit  the  number  of  PEPP 
providers, they should be subject to the same rules of conduct. In particular:  

  Professional advice should be available.  
 

Information about the nature and cost of the product should be provided. 

Based on the results of the workshop, the EU framework should be flexible in 
this  respect  and  only  harmonised  in  terms  of  principles.  All  types  of 
distribution channels should be allowed in principle. However, the existing EU 
and national regulations on this aspect should also be applied. 

Online distribution of the PEPP with advice 

All attendees agreed that the PEPP should be distributed online as:  

-  Online distribution is becoming the main distribution channel where the process 

is secure, simple and quick. 

-  The PEPP should target young people who are used to purchasing online.  

If the PEPP is distributed online, the consumer should be provided with information on 
the  nature  of  the  product  (for  example  the  retirement  objective,  no  possibility  for 
withdrawal at any time, long-term investment products) and on its cost.  

Participants,  from  both  supply  and  demand  sides,  highlighted  the  fact  that  online 
distribution without advice is possible only if the PEPP is very simple: 

If the PEPP is complex, professional advice should be mandatory.  

- 
-  Some attendees argued in favour of a PEPP that is simple and safe enough to 

be sold without advice, because the cost of advice often excludes a category of 
consumers who cannot afford it.  

The  majority  of  stakeholders  argued  for  harmonised  rules  on  the  content  of  the 
advice.  However,  a  limited  number  of  stakeholders,  notably  asset  managers, 
considered that rules regarding advice should depend on the provider and not apply to 
the PEPP. 

The  fact  that  advice  could  take  many  forms  on  the  internet  was  also  discussed  (for 
example: chat discussion, robo-advising and aggregators, etc.).  

Online distribution should be expressly allowed in the PEPP framework.  
Regarding  advice  associated  with  online  distribution,  the  PEPP  framework 
should limit the cases where advice is not mandatory. 

Distribution by employers 

There was a consensus among participants on this issue: employers should be able to 
distribute  the  PEPP  as  there  is  no  need  to  restrict  the  number  of  providers  and  no 
benefit from doing so.  

The  EU  framework  should  be  flexible  in  this  respect  and  only  harmonised  in 
terms of principles. Distribution by employers should be allowed in principle. 
However,  the  existing  EU  or  national  regulations  on  this  aspect  should  also 
be applied. 

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No consensus on distribution costs 

There  was  no  consensus  on  distribution  costs.  Some  attendees,  mainly  from  the 
consumer  side,  considered  that  costs  should  be  capped.  Others,  mainly  provider 
representatives, highlighted the fact that it is more efficient to let the market  set the 
price and that a cap would distort competition. 

All attendees agreed that there is a need for transparency on costs. 

The  EU  framework  should  not  include  any  provisions  on  distribution  costs. 
However,  the  existing  EU  or  national  regulations  on  this  aspect  should  also 
be applied. 

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Session 3.3 “Advice” 
Advice helps investors choose the appropriate PEPP taking into account their financial 
situation and objectives. For many individuals, advice is very important  to help them 
to  make  the  best  decisions  when  purchasing  financial  products  or  services.  For  this 
reason, the provision of advice in the PEPP framework is essential for such investors. 

The  purpose  of  this  session  was  to  determine  the  level  of  advice  needed  in the  PEPP 
framework.  

The main points discussed relate to the following topics: 

-  Possibility of using current regulations as a basis (MiFID, IDD, PRIIPs) 
-  Whether advice should be mandatory 
-  Organisation of the advice for online PEPP distribution 
- 

Issues closely linked to the complexity and the features of the PEPP 

The following questions were asked during the workshop: 

-  Should  the  existing  sectoral  rules  be  used  as  a  basis  for  the  regulations  on 

advice? 

-  How  should  online  PEPP  advice  be  organised?  What  type  of  advice  should  be 

provided? 

-  Should the advice be free? 

The  results  of  both  sessions  based  on  the  the  positions  expressed  by  attendees  and 
the findings of the EY study can be summarised as follows: 

Features 

Positions expressed during the workshop 

Current regulations used as a basis 

Mandatory and free advice 

Organisation  of  advice  for  online  PEPP 
distribution 

Harmonised feature: the existing EU rules should be used as a 
basis. However, Member States should be allowed to provide for 
additional requirements. 

Harmonised  feature:  the  EU  framework  should  harmonise 
advice aspects notably by providing for free mandatory advice in 
principle and for pre-enrolment advice and advice on an ongoing 
basis.  

Harmonised  feature:  Online  distribution  should  be  expressly 
allowed  in  the  PEPP  framework.  Regarding  advice  relating  to 
online  distribution,  the  PEPP  framework  should  limit  the  cases 
where advice is not required. 

Advice should be mandatory  

As  a  preliminary  remark,  stakeholders  indicated  that  there  is  a  need  for  a  common 
definition of advice applicable to the PEPP: 

-  Definitions of advice in IDD or other regulations such as MiFID differ slightly, 

-  There is no agreement on the definition of advice (advice or guidance?) – need 

to clarify the definition of advice. 

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Stakeholders,  from  both  supply  and  demand  sides,  agreed  that  advice  should  be 
mandatory in principle.  

Regarding the level of advice needed, attendees agreed that it should depend on the 
design  of  the  PEPP,  as  it  should  be  adapted  to  the  complexity  of  the  product  and  to 
the different options offered to the pension saver. 

Stakeholders agreed that advice should be provided before enrolment, but also on an 
ongoing basis thereafter, concerning strategy and benefits. 

Stakeholders agreed that a regulation should be implemented at EU level and that the 
existing  rules  should  be  modified:  the  method  of  distribution  is  important  for  advice 
purposes.  

For stakeholders, notably providers, it is recommended to use the existing rules (e.g. 
the  IDD  deals  with  knowledge  of  the  client  and  advice  provided).  There  was  no 
objection from consumer representatives on this point. 

The EU framework should harmonise advice aspects, notably by providing for 
mandatory advice in principle and for pre-enrolment advice and advice on an 
ongoing  basis.  The  existing  EU  rules  should  be  used  as  a  basis.  However, 
Member States should be allowed to provide for additional requirements. 

Online distribution of the PEPP with advice 

The results are presented in the section on session 3.2.  

Free advice 

The  stakeholders,  notably  consumer  representatives,  agreed  that  mandatory  advice 
should be free. 

However if the PEPP requires specific advice, providers underlined that: 

-  This advice could be provided by an intermediary; 

-  This advice should not be free and the related cost should be disclosed. 

Stakeholders,  in  particular  from  the  demand  side,  but  providers  too,  also  considered 
that the cost relating to advice needs to be disclosed. 

The  EU  framework  should  provide  that  mandatory  advice  is  free.  For  other 
types of advice, the EU framework should include disclosure requirements on 
cost.  Member  States  should  be  allowed  to  provide 
for  additional 
requirements. 

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Sessions on taxation aspects 

Sessions 4.1 and 4.2 “Tax aspects of a PEPP” 
These sessions aimed to discuss three different approaches regarding the level of  EU 
harmonisation in the light of taxation. The session only focused on the direct taxation 
of pension savers given that tax incentives are a key driver for investment in personal 
pension products.  

Three approaches were defined during our discussions with the European Commission. 
These approaches were summarised and presented to the stakeholders as follows: 

-  Non-flexible approach:Non-flexible approach 

o  Key product features set at EU level 
o  PEPPs may not benefit from tax relief in all Member States 

-  Semi-flexible approach: 

o  Core  requirements  and  other  relevant  requirements  not  correlated  to 
the  benefit  from  tax  incentives  (i.e.,  tax  incentives  on  in-payments  or 
yield exemption) set at EU level 
o  Features  determining  whether 

tax 
incentives(i.e., tax incentives on in-payments or yield exemption) left to 
national level 

the  product  qualifies 

for 

o  Providers create a “section” for a given set of features corresponding to 

a given Member State 

o  PEPPs should benefit from tax incentives in all Member States 

- 

Fully-flexible approach 

o  All requirements are decided at national level 
o  Providers create a section for each PPP in all Member States 
o  PEPPs  with  all  PPP  features  could  benefit  from  tax  relief  in  all  Member 

States 

The following questions were asked during the workshop: 

-  Which approach seems most feasible? 
-  For providers: which approach would facilitate cross-border selling? 
-  For consumers: which approach would facilitate portability? 
-  Which features are critical from a tax perspective? 
-  Which features are non-critical from a tax perspective? 

The  results  of  the  sessions  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

Approaches 

Positions expressed during the workshop 

Fully-flexible approach 

This approach was rejected by all attendees 

Semi-flexible approach  

Non-flexible approach 

Certain  stakeholders  were  in  favour  of  a  non-flexible 
approach.  However,  the  majority  of  attendees  underlined 
the  importance  of  PEPPs  giving  access  to  tax  incentives  at 
Member State level and to have a sufficient level of flexibility 
to  adapt  the  product  to  the  local  environment.  The  semi-
flexible  approach  appears  to  be  the  preferred  approach 
based on the positions expressed.  

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Semi-flexible approach should be retained 

For  all  attendees,  from  both  supply  and  demand  sides,  the  idea  of  a  PEPP  is  to  have 
standardised features, not standardised taxation regimes. 
Therefore, if Member States could choose the features that are critical for national tax 
regimes, the objective of a standardised PEPP would not be met. For this reason, the 
fully flexible approach was discarded by the stakeholders.  

Stakeholders,  from  both  supply  and  demand  sides,  underlined  that  taxation  aspects 
should not fully determine the features of the PEPP. According to the stakeholders, the 
PEPP  should  be  designed  to  be  simple  and  affordable,  allowing  for  switching  and 
portability. Tax aspects should be partially taken into account in the discussion.  

Thus  stakeholders  are  more  in  favour  of  a  non-flexible  approach,  or  an  extensive 
semi-flexible approach if the range of EU features is wider, and are not in favour of a 
fully flexible approach. 

Harmonisation on accumulation features 

Stakeholders indicated that a single PEPP with features that qualify for tax incentives 
in all Member States would be unlikely to exist. The clustering work presented in our 
study confirms this assumption.  

Regarding  the  features  to  be  harmonised,  stakeholders  agreed  that  the  Commission 
should  focus  on  the  accumulation  phase  and  that  the  decumulation/out-payments 
phase  should  not  be  harmonised  given  the  correlation  of  the  features  of  the 
decumulation phase with the specificity of certain PPP characteristics and therefore the 
benefit from tax incentives. 

The stakeholders agreed that the features to be harmonised should be discussed with 
Member States on the broadest basis possible. 

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Session 4.3 “Cross-border portability of a PEPP: conditions and costs” 
This  session  aimed  to  determine  the  level  of  flexibility  of  cross-border  switching  and 
portability at EU level. 

Firstly, the following definitions were provided to the attendees: 

-  Cross-border switching (changing provider – non-mobile person): Cross-border 
switching  is  the  possibility  for  a  non-mobile  pension  saver  to  transfer  his/her 
investments to a provider in another Member State. 

-  Cross-border  portability  (changing  country  –  mobile  person):  The  pension 
portability  issue  has  been  mainly  analyzed  from  an  occupational  pension 
perspective,  notably  in  the  context  of  the  IORP  Directive.  The  main  issues  of 
cross-border  portability  relate  to  worker  mobility  and  the  barriers  or 
discriminations  that  apply.  Portability  is  the  possibility  for  a  mobile  pension 
saver  to  continue  to  benefit  from  tax  relief  for  his/her  PPP  in  his/her  new 
Member State. 

The main points discussed relate to the following topics: 

-  High flexibility concerning PEPP switching and portability: 

o  Switching possible at any time 
o  Little or no cost 
o  Unfavorable interaction with illiquid long-term investment 
o  Limitations  relating  to  providers  with  different  regulations  (banking  vs 

insurance)? 
o  Practicalities 
o  Encourages portability 

-  Low flexibility concerning PEPP switching and portability 

o  Switching only allowed according to specified frequency or schedule 
o  High cost or restrictions 
o  Adequacy with respect to illiquid long-term investment 
o  Limitation regarding providers? 
o  Practicalities 
o  Does not encourage portability 

The following questions were asked during the workshop: 

-  How should switching be regulated? 
-  Should cross-border switching during accumulation be limited? 
-  Should  the  cost  of  cross-border  switching  be  low/capped,  high  in  order  to 
discourage switching, fixed, based on actual cost or correlated to accumulated 
amounts? 

-  Should cross-border switching during decumulation be left up to each Member 
State or decided at provider level? Forbidden by EU regulation? Enabled by EU 
regulation? 

-  What should be transferred: surrender value (without tax impact) or assets? 
-  Should switching be taxed? 

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The  results  of  the  sessions  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

Features 

Positions expressed during the workshop 

Switching possible at any time 

Switching cost 

Practicalities 

Portability 

Harmonised in terms of principles: cross-border switching 
should  be  allowed  in  the  PEPP  framework  after  a  mandatory 
minimum  holding  period.  However,  the  length  of  this  period 
should be left up to Member States or providers. 

Harmonised  in  terms  of  principles:  the  PEPP  framework 
should  allow  cross-border  switching  at  a  cost.  The  charge of 
switching  for  the  consumer  could  be  defined  at  EU  level  as 
cost-based  and  capped.  However,  the  amount  of  the  costs 
should be determined at Member State or provider level. 
All attendees were in favour of switching at surrender value. 
All  attendees,  from  both  supply  and  demand  sides,  were  in 
favour of the portability of the PEPP. 

Cross-border switching regulated and allowed at EU level 

All attendees agreed that cross-border switching should be regulated at EU level.  

Moreover,  dialogue  between  national  supervisors  is  needed.  They  should  work 
together to ensure that cross-border activity is made possible. 

Domestic  and  cross-border  switching  are  equivalent  from  a  provider’s  perspective. 
However,  for  consumers,  the  issue  of  fiscal  continuity  arises.  Without  equal  fiscal 
treatment,  ensuring  continuity  (for  example,  with  regard  to  rights  acquired  in  a 
previous country of residence) is a very difficult challenge. The European Commission 
stated  that  it  was  not  envisaging  standardised  taxation,  but  that  some  level  of 
harmonisation would be considered. 

The  EU  framework  should  be  harmonised  in  this  respect  and  cross-border 
switching should be allowed at EU level. 

Limitation of cross-border switching during accumulation 

All  attendees  agreed  cross-border  switching  during  accumulation  should  be  limited 
consistently with limitations to be envisaged for domestic switching.  

It should probably be limited via a mandatory minimum holding period with the same 
provider.  There  was  no  clear  consensus  on  how  long  the  minimum  holding  period 
should  be.  A  minimum  holding  period  of  five  years  was  suggested  (with  a  penalty  in 
the event of non-compliance).  

Based on the results of the workshop, the EU framework should be flexible in 
this  respect  and  only  harmonised  in  terms  of  principles.  Cross-border 
switching  should  be  allowed  in  the  PEPP  framework  after  a  mandatory 

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minimum holding period. However, the length of this period should be left up 
to Member States or providers. 

Cross-border switching subject to a cost-based, capped charge 

Some stakeholders suggested that cross-border switching could be free if done after a 
minimum holding period with the same provider. 

However,  this  proposal  was  discarded  by  other  attendees  who  underlined  that 
providers will incur costs for this operation that should be borne by the consumer.  

Based on the results of the workshop, the EU framework should be flexible in 
this respect and only harmonised in terms of principles. The PEPP framework 
should  allow  cross-border  switching  at  a  cost.  The  charge  for  switching  for 
the  consumer  could  be  defined  at  EU  level  as  cost-based  and  capped. 
However,  the  amount  of  the  cost  should  be  determined  at  Member  State  or 
provider level.  

Switching at surrender value 

All attendees were in favour of switching done at surrender value. 

No harmonisation of cross-border switching during the decumulation phase 

Attendees,  from  both  demand  and  supply  sides,  stated  that  cross-border  switching 
during decumulation should be forbidden, unless the out-payment is a lump sum. 

However,  as  discussed  during  the  sessions  on  decumulation  aspects,  the  EU 
framework should not harmonise the features of the decumulation phase.  

The EU framework should not harmonise this aspect. This should be left up to 
Member States and providers. 

No harmonisation of taxation aspects regarding cross-border switching 

The  stakeholders  were  in  favour  of  tax-free  cross-border  switching.  However,  the 
harmonisation of taxation is excluded from  the current PEPP initiative. Therefore, this 
cannot be a preferred PEPP feature.  

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Sessions on the treatment of providers 

Sessions 5.1 and Session 5.2 “Authorisation and supervision of the potential providers 
of the PEPP” 
Sessions  5.1  and  5.2  aimed  to  discuss  the  framework  for  the  authorisation  and 
supervision of the providers of a potential PEPP. 

The  authorisation  and  supervision  framework  aims  to  ensure  that  PEPP  providers  are 
fit  and  proper  to  enter  the  market,  and  are  sufficiently  supervised  by  independent 
authorities in order to guarantee an appropriate level of consumer protection and the 
respect of both EU and national regulations applicable. 

During  the  sessions,  the  need  to  determine  common  prudential  requirements  for  the 
different  providers  was  discussed.  The  main  points  discussed  relate  to  the  following 
topics:  

-  Common prudential requirements applicable to different providers: 

o  Whether  different  providers  such  as  insurers  and  pension  funds  should 
be  allowed  to  provide  the  PEPP  under  common  prudential  rules  to  be 
defined; 

o  Whether  common  prudential  capital  requirements  should  be  required; 

and 

o  The need for common supervision rules: governance, risk management, 

reporting and transparency requirements. 

-  Different prudential requirements applicable to different providers: 

o  Whether  or  not  different  providers  other  than  insurers  and  pension 

funds should be allowed to provide the PEPP; 
o  Non-common prudential capital requirements; and 
o  Non-common  supervision 
rules:  governance, 

reporting and transparency requirements. 

The following questions were asked during the workshop:  

-  What should be included in the supervisory framework? 
-  What should the authorisation procedures be?  

risk  management, 

The  results  of  the  sessions  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

Features 

Positions expressed during the workshop 

Prudential capital requirements 
applicable 

Supervision rules applicable 

The majority of attendees agreed that the current authorisation 
and  supervision  procedures  applicable  to  providers  (life 
insurers,  pension 
institutions  and  asset 
managers)  are  sufficient  and  that  there  is  no  need  to  create  a 
new regime specific to PEPP providers. 

funds,  banking 

No additional supervisory rules 

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All  attendees  agreed  that  providers  were  already  carefully  supervised  and  that  no 
more extra supervision is needed. 

Stakeholders  underlined  that  supervisory  rules  applied  to  providers  and  not  to  the 
products and that the following rule should apply: “same product, same risk and same 
supervisory measures”.  

There  might  be  a  need  to  reconsider  this  conclusion  depending  on  the  choice  of 
implementation  approach.  Indeed,  a  non-flexible  approach  could  be  contradictory  to 
the possibility of different providers proposing the PEPP, and therefore the application 
of different supervisory rules. Ultimately, given the results of the  other sessions, it is 
likely that a level of flexibility should be included in the definition of the PEPP, notably 
with respect to the decumulation phase, and this flexibility should be correlated to the 
possibility of different supervisory rules. 

No additional authorisation regimes 

The  majority  of  participants  agreed  that  the  current  authorisation  procedures  and 
regimes  are  sufficient  and  that  there  is  no  need  to  create  a  new  regime  specific  to 
PEPP providers.  

Some  attendees,  notably  from  the  consumer  side,  were  in  favour  of  the  idea  of  a 
common standard with an additional level of supervision.  

For the majority of stakeholders, if a provider meets all the conditions to sell PEPPs in 
a  given  Member  State,  it  should  be  authorised  to  sell  PEPPs  cross-border  with  no 
additional procedures being required. 

The solution of an a posteriori audit was preferred by the stakeholders and their view 
was  that  financial  sanctions  and  reputational  risk  are  sufficient  to  ensure  that 
providers will respect the conditions provided for by the regulation.  

This  conclusion  might  be  adapted  depending  on  the  choice  of  implementation 
approach.  A  semi-flexible  approach  could  notably  include  the  principle  of  mutual 
recognition of PEPP providers. 

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Session 5.3 “Prudential requirements” 
This session aimed to assess the need to determine common prudential requirements 
applicable to the different providers at EU level. 

Prudential  regulation  imposes  standards  that  require  firms  to  control  risks  and  hold 
adequate  capital,  with  the  goal  of  protecting  the  markets  and  investors.  Regulation 
rules  are  considered  in  this  session  in  order  to  determine  if  new  rules  should  be 
included  in  the  PEPP  framework  or  if  the  rules  applicable  to  the  different  types  of 
providers are sufficient. 

The main points discussed relate to the following topics: 

-  Common prudential requirements applicable to different providers: 

o  Whether  different  providers  such  as  insurers  and  pension  funds  should 

be allowed to provide PEPPs under common prudential rules 

o  Common prudential capital requirement rules 
o  Common  supervision  rules:  governance,  risk  management,  reporting 

and transparency requirements 
-  Differentiated prudential requirements 

o  Whether  different  providers  such  as  insurers  and  pension  funds  should 

be allowed to provide PEPPs 

o  Differentiated prudential capital requirement rules; 
o  Differentiated  supervision 
rules:  governance, 

risk  management, 

reporting 

o  Transparency requirements 

The following questions were asked during the workshop: 

-  What should the building blocks of a prudential framework for a PEPP be? 
-  On what basis should capital requirements for a PEPP be established? 
-  What  are  the  main  tasks  to  ensure  an  appropriate  supervisory  review  of  a 

PEPP? 

The  results  of  the  sessions  based  on  the  positions  expressed  by  attendees  and  the 
findings of the EY study can be summarised as follows: 

Features 

Positions expressed during the workshop 

Prudential capital requirements 
applicable 

Supervision rules applicable 

The  majority  of  attendees  agreed  that  the  current  regulations 
applicable  concerning  providers  (life  insurers,  pension  funds, 
banking institutions and asset managers) are sufficient and that 
there  is  no  need  to create  specific  requirements  in  the  context 
of the PEPP framework. 

No additional prudential rules including on capital requirement 

The prudential framework is closely linked to the provider  rather than to the product. 
According  to  the  stakeholders,  the  existing  regulation  frameworks  are  sufficient  and 
there is no need for additional EU rules. 

The  PEPP  must  offer  a  guarantee,  matching  consumer  protection  with  the 
requirements applicable to the provider. 

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According to the stakeholders, the capital requirements could be based on the existing 
EU regulations. 

It  has  been  mentioned  that  IORP  capital  requirements  are  principally  set  at  national 
level  and  that  capital  requirements  are  set  up  in  different  ways  depending  on  the 
provider activity type. 

It  may  be  noted  that  a  semi-flexible  approach  could  include  capital  requirement 
principles applicable to the providers. 

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PEPP ID Card 

Based  on  the  results  of  the  workshop,  the  following  have  been  selected  as  the 
preferred features to be included in the PEPP framework.  

This PEPP  ID  card focuses  only on  the accumulation and decumulation phases.  Yields 
have not been taken into account to determine the features to be included in the PEPP 
framework for harmonisation purposes. 

Figure 37: PEPP ID Card - preferred PEPP features 

Features of the accumulation phase to be included in the PEPP framework 

The following categories of features were discussed during the workshop sessions: 

- 

- 

In-payment characteristics; 

Investment strategy; 

-  Mitigation of risks; 

-  Early out-payments. 

In-payment characteristics 

The  preferred  features  for  PEPP  in-payments  are:  the  determination  of  a  minimum 
amount of in-payments, the possibility of changing the level of in-payments during the 
accumulation phase, the possibility of State and employer subsidies, and the age limit 
on starting the accumulation phase during which in-payments are made. 

Regarding in-payments, the view is that minimum in-payment amounts should not be 
set at EU level as it would be difficult to harmonise these amounts given the diversity 
of environments in the Member States. 

However, it would be preferable to fix limits for the minimum amount of in-payments 
at provider level, in order to facilitate portability. 

June 2017 243 

Accumulation phaseDecumulation phaseNo harmonisation►The provision of PEPPs should be fully open to asset managers, insurers and banking institutions►Current EU rules applicable to providers should be sufficientProvidersDistributorsAdvice and transparencyIn-payment characteristics►No mandatory minimum set at  EU level but limits could be set at provider level►Possibility of changing the level of in-payments during the accumulation phase►State and employer subsidies allowed at EU level►No maximum age limit for the start of the accumulation phase set at  EU levelPortability and switching►Early out-payments should be possible  but limited at EU levelInvestment strategy►Multiple investment options and default investment option should be offered to the consumer but not regulated at  EU level ►Changes in investment strategy should be limited and carefully advised Mitigation of riskEarly outpayments►Need to ensure consumer protection and competitiveness with local products►No full capital guarantee is needed►No disability coverage►Optional death coverage►The distribution of PEPPs should be fully open to all types of distributors►Online distribution should be allowed at EU level►Online distribution without advice should be limited (to PEPPs that are sufficiently simple and safe)►Switching should be allowed at EU level ►Switching should be limited by a mandatory minimum holding period►Switching should be subject to a cost-based, capped charge►Current EU rules should be used as a basis►Advice should be mandatory and free (payable only when specific)►There is a need for an EU information document (set of information determined at EU level) and local information documents 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

According to the  workshop results, the PEPP  framework should include  the possibility 
of changing the level of in-payments made by the customer in order for the PEPP to be 
competitive with local existing PPPs. 

The  PEPP  framework  should  also  include  the  possibility  of  State  and  employer 
subsidies at EU level in order to enhance the savings potential and the success of the 
product.  

An  age  limit  on  starting  accumulation  is  not  restrictively  set  in  the  current  PPPs.  In 
most  cases,  PPPs  do  not  mention  an  age  limit,  or  refer  to  the  legal  retirement  age. 
Thus, the PEPP framework should not include a maximum age limit for the beginning 
of the accumulation phase. This factor could be left to the discretion of the providers, 
taking into account the retirement objective and long-term strategy of the product. 

Investment strategy 

During  the  accumulation  phase,  the  customer  should  have  the  possibility  of  choosing 
the investment strategy for the in-payments contributed. 

Indeed,  according  to  discussions  during  the  workshops,  multiple  investment  and 
default investment options should be offered to the consumer but not regulated at EU 
level.  Based  on  the  results  of  the  workshop,  the  content  of  the  default  option  should 
be decided by each provider according to the product strategy profile. 

However,  even  if  the  customer  has  the  opportunity  to  choose  and  change  the 
investment strategy, it  was underlined that the number  of  changes should be limited 
and carefully advised, depending on the level of knowledge of investment matters and 
the experience of the customer.  

Mitigation of risks 

According to the workshop results, the features concerning the mitigation of risks need 
to ensure consumer protection and competitiveness with local PPPs. 

In  order  to  maintain  a  sufficient  level  of  consumer  protection,  full  capital  guarantee 
was  not  considered  to  be  a  good  option,  as  offering  such  a  guarantee  would  lead  to 
considerably  decreasing  the  level  of  investment  return  and  thus  reducing  the 
attractiveness of the PEPP. 

Regarding  coverage  possibilities,  the  conclusion  of  the  workshop  is  that  disability 
coverage  is  not  needed  as  there  is  no  common  definition  of  this  guarantee  and  the 
shared objective is to have a simple PEPP. 

Based  on  the  views  expressed  during  the  workshops,  death  coverage  should  be 
possible  as  an  option  left  to  the  discretion  of  the  customer.  Once  again,  it  was 
underlined  that  the  product  should  remain  simple,  but  that  there  is  a  need  for 
consumer  protection  and,  at  the  very  least,  reimbursement  of  the  in-payments 
accumulated in the event of death. 

Early out-payments 

According  to  the  workshop  results,  the  PEPP  should  allow  early  out-payments  in 
limited situations.  

Indeed, stakeholders generally agreed that early out-payments should only be allowed 
in  limited  cases  to  be  defined  and  discussed  further,  as  only  such  limitations  will 
ensure,  on  the  one  hand,  the  achievement  of  the  long-term/retirement  objective  of 

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the  product  and,  on  the  other  hand,  a  sufficient  level  of  flexibility  to  guarantee  the 
attractiveness of the PEPP. 

Providers 

According  to  the  workshop  results,  the  provision  of  PEPPs  should  be  fully  open  to  all 
types  of  providers  (i.e.  banks,  insurers  and  asset  managers)  in  order  to  ensure 
competitiveness with local PPPs and encourage the distribution of the PEPP.  

It was considered that current EU rules applicable to providers are sufficient and there 
is no need for additional regulations. 

Distributors 
According to the workshop results, the distribution of PEPPs should be fully open to all 
types  of  distributors  (i.e.  insurers,  banks,  broker  agents,  asset  managers,  pension 
funds  and  employers)  in  order  to  ensure  competitiveness  with  local  PPPs  and 
encourage the distribution of the PEPP.  

One  of  the  workshop’s  objectives  was  to  determine  the  specificities  of  online 
distribution.  The  view  was  that  online  distribution  should  be  allowed  at  EU  level  and 
that,  in  principle,  advice  should  be  provided.  However,  it  was  considered  that  if  the 
PEPP is simple and safe enough, no advice would be needed. 

Portability and switching 
Portability27  is  one  of  the  main  objectives  of  the  PEPP.  However  it  can  only  be  fully 
achieved through  the harmonisation of the tax regimes applicable to the PEPP across 
the  EU,  or  through  the  adaptation,  by  the  provider,  of  the  relevant  PEPP  features  to 
tax  local  requirements  in  order  to  allow  the  consumer  to  benefit  from  local  tax 
incentives. 

Regarding switching28, the view was that this feature should be provided at EU level. It 
was  concluded  that  switching  should  be  limited  by  a  mandatory  minimum  holding 
period set by EU rules in order to achieve the long-term investment objective. 

The  possibility  of  switching  should  be  subject  to  specific  advice.  The  majority  of 
attendees  agreed  that  transfer  should  be  subject  to  a  cost-based,  capped  price  in 
order  to  limit  the  occurrence  of  switching.  However,  some  attendees,  notably insurer 
representatives,  noted  that  prices  should  be  adapted  to  the  economic  realities  of  the 
contract.   

Advice and transparency 

Regarding advice and transparency, according to the results of the workshop, current 
EU  rules  should  be  used  as  a  basis  but  could  be  adapted  taking  into  account  the 
harmonised PEPP features.  

Consumers  and  providers  expressed  the  view  that  the  main  objective  is  to  ensure 
comparability between PEPPs, with a clear, concise document, and if feasible, between 
PEPPs and local PPPs. 

27  Portability  is  the  possibility  for  a  mobile  pension  saver  to  continue  to  benefit  from  tax  relief for  his/her 
PPP in his/her new Member State. 
28 Cross-border switching is the possibility for a non-mobile policy holder to transfer his/her investments to 
a provider in another Member State. 

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The  information  document  should  be  disclosed  before  enrolment  and  then  on  an 
annual basis. 

Advice should be mandatory and free (payable only when specific). 

Added  value  of  the  PEPP  with  preferred  features  compared  with  available 
PPPs 

The objective of a simple, clear and attractive product should be achieved through the 
selection of the following features: 

  Economies of scale. With the harmonisation of a broad set of features at EU 
level, the product will benefit from economies of scale and cost efficiency by 
reducing costs at provider level, and consequently the return on investment will 
be increased. This will foster competition between providers. 

  Providers. The PEPP could be offered by a large variety of providers regulated 

at EU level and allowed through the currently existing procedures. This will lead 
to increasing the offer at national level and continue to ensure consumer 
protection. 

  Enlarge the offer in certain undeveloped markets. The PEPP could be offered by 
a provider from one Member State in another Member State where the current 
offer of PPPs is limited. This will be possible due to economies of scale allowed 
by the cross-border provision of services relating to a harmonised PEPP. 

  Advice and transparency. The harmonisation at EU level of information 

disclosure requirements will allow consumers to compare PEPPs with the PEPPs 
offered by different providers, which will encourage high-quality products and 
lower costs.  

  Switching. The possibility for a consumer to change provider during the 

accumulation and decumulation phases would make the product more 
attractive for the consumer and would lead to healthy competition between the 
providers resulting in the offering of high-quality, cross-border products and 
lower costs. 

  Early out-payments. Harmonisation at EU level of the cases where early out-

payments are allowed will guarantee the retirement objective of the PEPP and 
the long-term investment strategy. 

Analysis of the PEPP features with respect to PPPs with a high MPI score  

The following table summarises the preferred PEPP features included in the framework 
of the five PPPs with the highest market penetration index (MPI). 
Please note that this analysis is limited to the preferred PEPP features identified on the 
basis of the workshop discussions and the conclusions set out in our study. 

Table 24: PEPP features found in the five PPPs with the highest MPI  

PEPP feature 

How many of the five PPPs with the 
highest MPI include the feature? 

In-payment characteristics 

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No mandatory minimum fixed at EU level but limits could be 
fixed at provider level 

Possibility of changing the level of in-payments 

No maximum age limit for the start of the accumulation phase 
fixed at EU level 

Investment strategy 

Multiple investment options and a default investment option 
should be offered to the consumer but not regulated at EU 
level 

Mitigation of risk 

4 out of 5 products 

5 out of 5 products 

3 out of 5 products 

5 out of 5 products 

No full capital guarantee is needed 

No disability coverage 

Optional death coverage 

The 5 most successful products provide for 
a guarantee on capital 

2 out of 5 products, but 3 products offer 
optional disability coverage 

4 out of 5 products 

The 5 most successful products allow early 
out-payments without limitation 

Early out-payments should be allowed but limited at EU level 

Online distribution without advice should be limited (to PEPPs 
that are sufficiently simple and safe) 

5 out of 5 products 

Distributors  

Portability and switching  

Switching should be allowed at EU level 

5 out of 5 products allow for domestic 
switching and 3 out of 5 products allow for 
cross-border switching 

It  can  be  seen  from  on  the  table  above  that  the  five  products  with  the  highest  MPI 
generally include the preferred PEPP features.  

It should be noted that for the five products with a medium MPI, early out-payments 
are allowed without limitation.  

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During the workshop, the attendees underlined that such  a feature is not in line with 
the PEPP retirement objective. Therefore the preferred PEPP feature would be to limit 
early out-payments at EU level.  

Assessment  of  the  preferred  PEPP  features  in  comparison  with  local  PPP 
legislation and tax regimes. 

Further  to  the  identification,  during  the  workshop,  of  the  preferred  PEPP  features 
according  to  the  stakeholders,  and  the  confirmation  of  these  features  based  on  the 
data collected on the existing PPPs, it will also be necessary to assess their technical 
feasibility  through  the  review  of  any  tax  obstacles  that  could  arise  as  a  result  of  the 
preferred PEPP features selected, since some of these features may not be compatible 
with local PPP tax regimes.  

In  this  respect,  the  preferred  PEPP  features  will  be  compared  to  the  current  PPP 
features  and  analyzed  in  order  to  determine  those  that  could  potentially  prevent 
consumers from benefiting from tax relief during the accumulation phase. Indeed, the 
conclusion  of  the  discussions  on  preferred  PEPP  features  is  that  decumulation  should 
not, at this stage, be harmonised at EU level. 

A  new  ID  card  will  thus  be  presented  in  the  context  of  our  study,  based  on  an 
adaptation of the features further to the previous analysis. 

The  feasibility  assessment  will  be  concluded  with  a  presentation  of  a  suggested 
approach for a PEPP framework. 

Analysis  of  the  preferred  PEPP  features  in  comparison  with  local  PPP  tax 
regimes 

One of the European Commission’s objectives in suggesting the creation of a European 
personal  pension  product  is  to  reduce  barriers  in  cross-border  business  relating  to 
personal  pension  products.  In  this  respect,  the  variety  of  the  tax  regimes  across 
Member States can be considered to be a significant obstacle to this objective. 

As  mentioned  in  the  EIOPA  advice  on  the  development  of  an  EU  single  market  for 
personal  pension  products,  “taxation  is  a  significant  hurdle  that  prevents  the 
emergence  of a Single Market for PPPs, as currently there is no  EU legislation on the 
taxation of pensions. (…) Pensions are taxed very differently across the EU and the tax 
treatment  is  often  linked  to  specific  characteristics  of  eligible  products,  (…).  This 
already  raises  various  challenges  to  the  creation  of  a  Single  Market  for  PPPs,  as 
products  need  to  exhibit  different  features  to  receive  beneficial  tax  treatment  in 
different Member States.” [EIOPA's advice on the development of an EU Single Market 
for personal pension products (PPP), 4 July 2016].  

The  analysis  performed  in  section  1  of  our  study  confirms  this  general  assessment, 
since one of our conclusions is that there is no common set of features for a PEPP that 
would allow the product to benefit from  the tax incentives related to local PPPs in all 
Member States. 

Based  on  this  assessment,  different  solutions  for  the  design  of  the  PEPP  were 
discussed,    the  general  idea  being  to  harmonise  a  set  of  features  for  a  standardised 
high-quality  product  enabling  economies  of  scale  for  both  providers  and  consumers, 
with the possibility for consumers to benefit from tax incentives in their Member State, 

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in order to arrive at a  product that is  competitive  versus currently available personal 
pension products. 

One  of  the  approaches  envisaged  was  inspired  by  the  IORP  Directive  voted  in  2003 
and  the  IORP  II  Directive  voted  in  2016  [Directive  (EU)  2016/2341  of  the  European 
Parliament and of the Council of 14 December  2016 on the activities and supervision 
of institutions for occupational retirement provision (IORPs)]. 

The  IORP  Directives  enable  a  mutual  recognition  of  pillar  2  pension  funds  across  all 
Member States, by providing a set of regulatory and supervision principles and allow a 
given  pension  fund  to  have  cross-border  activity  and  also  permit  the  cross-border 
transfer of pension schemes. These directives do not create a pillar 2 product and they 
do not provide for features for a pan-European occupational or pillar 2 product. 

In  the  context  of  the  creation  of  a  Pan-European  Personal  Pension  Product  (pillar  3), 
these  directives  could  be  used  as  an  inspiration  to  create  an  approach  which  would 
consist in providing for a set of principles regarding regulatory and supervision aspects 
applicable  to  the  providers,  and  not  to  harmonise  the  features  of  the  product.  This 
approach  could  also  be  called  a  “fully  flexible  approach”.  In  this  approach,  no  PEPP 
would  be  created,  but  national  providers  that  are  compliant  with  a  PEPP  regulatory 
and  supervision  framework  and  recognised  as  such  would  be  authorised  to  cross-
border sell personal pension products by adapting to national requirements. 

A more harmonised approach, the “semi-flexible approach”  would consist, in addition 
to  the  supervision  and  regulatory  requirements,  in  harmonising  a  set  of  features  at 
European  level  and  then  creating  a  pan-European  personal  pension  product.  Non-
harmonised features could be left up to Member States or decided at provider level, so 
that certain features can be adapted to national tax legislation.  

In  these  two  approaches,  in-payments  to  a  PEPP  would  be  performed  in  a  given 
national  “section”  corresponding  to  the  customer’s  tax  residence,  adapted  to  the 
features  corresponding  to  the  Member  State  environment.  Thus,  these  approaches 
would allow in-payments paid to a foreign PEPP provider to potentially qualify for the 
same  tax  relief  as  in-payments  paid  to  domestic  providers.  Yields  during  the 
accumulation phase would also qualify for the same tax relief as yields received from 
domestic  providers.  Out-payments  would  qualify  for  the  same  tax  relief  as  out-
payments  received  from  domestic  providers  based  on  the  customer’s  tax  residence 
during the decumulation phase.  

It should be noted that the IORP Directives are directly applicable to providers of the 
pillar 2 occupational products and aim to regulate those providers. 

As  regards  PEPP,  the  approach  is  slightly  different  since  the  providers  could  be 
insurers,  pension  funds,  bankers  or  asset  managers  and  the  idea  of  the  PEPP 
regulation is not to propose a new regulation framework for the providers (notably in 
terms of prudential supervision at provider level). In other words, the outcome of the 
discussions  with  the  stakeholders  during  the  workshop  is  that  the  PEPP  regulation 
should be product-based, and therefore propose a common product platform available 
for different providers. 

The “non-flexible approach” consisting in harmonising all the features of the PEPP was 
discarded  in  our  study,  as  it  would  not  permit  consumers  to  benefit  from  the  tax 
incentives in their Member States.  

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The preferred PEPP features described above will be compared with the PPP features in 
order  to  identify  potential  difficulties.  This  analysis  should  aim  to  highlight  features 
that  are  potentially in  conflict  with  national  tax  rules  during  the  accumulation  phase. 
Based on this analysis, an adaptation of the preferred features should be proposed in 
order to increase the compatibility of the PEPP features with current local PPP features. 

Qualification  of  preferred  PEPP  features  with  respect  to  tax  regimes  during 
the accumulation phase 

A comparison of the preferred PEPP features with  the PPP features resulting from the 
tax mapping was performed and analyzed in order to identify potential obstacles  that 
would  prevent  a  PEPP  from  benefiting  from  PPP  tax  incentives  on  in-payments, 
according to current features and the related local tax regime.  

This  analysis  was  performed  from  a  theoretical  point  of  view.  From  a  practical 
standpoint,  it  should  be  noted  that  tax  regimes  are  not  systematically  linked  to  PPP 
features  (these  features  may  evolve  independently  of  the  tax  legislation),  and  that 
some  characteristics  not  included in  the  tax  framework  could  be  considered  essential 
to a given PPP and therefore critical in order to benefit from the tax regime related to 
a given PPP. 

Given the variety of taxation systems across Member States, and in the context of the 
study, we have made assumptions concerning ‘non-distinctive’ to ‘highly distinctive’ 
features.  

The ‘non distinctive’ features are those that should generally not impact the taxation 
regime related to a given PPP, because the corresponding preferred PEPP features are 
flexible and only harmonised in terms of principles or because these features are not 
strictly provided for by the legislation dealing with the PPP in question or the 
legislation does not contain a direct reference to these features.  

In contrast, the ‘highly distinctive’ features are considered critical from a tax 
standpoint, i.e., the preferred PEPP features are fully harmonised at EU level and are 
directly linked to the benefit of tax incentives during the accumulation phase. If these 
features are not present, the product would not have access to the tax regime related 
to a given PPP.  

The working assumption is therefore that a PEPP that combines all the ‘highly 
distinctive’ features would have access to the tax regime associated with the PPP of 
which it has the considered features.  

The preferred PEPP features can be qualified as ‘non distinctive’ versus ‘highly 
distinctive’ as follows, as regards the accumulation phase: 

Table  25:  Preferred  PEPP  features  qualifying  as  distinctive  -  accumulation 
phase 

Preferred PEPP feature 

No mandatory minimum set at EU 
level but limits could be set at 
provider level 

Accumulation phase 
Qualification 
Not distinctive 

Possibility of changing the level of 

Distinctive 

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Comments 

This preferred PEPP feature is not 
distinctive: this feature is highly 
flexible at EU level. Providers should 
be able to set a mandatory minimum 
for in-payments in order not to be in 
conflict with the PPP tax regime. 
This preferred PEPP feature is 

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in-payments 

Employer subsidies left up to the 
Member State  

Not distinctive 

No maximum age limit for the start 
of the accumulation phase set at EU 
level 

Not distinctive 

Early out-payments should be 
allowed but limited at EU level 

Highly 
distinctive 

distinctive: the possibility of changing 
the level of in-payments should be 
harmonised at EU level. If the PPP 
regime does not allow for such change, 
this PEPP feature would be in conflict 
with it.  
This preferred PEPP feature is not 
distinctive: the EU regulation should 
allow employer subsidies but this 
feature is not mandatory. If the local 
PPP regulation does not allow for 
employer subsidies, this feature could 
be adapted by PEPP providers and it 
should not prevent consumers from 
benefiting from tax incentives on in-
payments.  
This preferred PEPP feature is not 
distinctive: no maximum age limit 
should be set at EU level. If the local 
PPP regulation provides for such an 
age limit, PEPP providers could adapt 
the product and this should not 
prevent consumers from benefiting 
from tax incentives on in-payments.  
This preferred PEPP feature is highly 
distinctive: this feature should be 
harmonised at EU level. The PEPP 
framework should provide for early 
out-payments to be allowed in limited 
situations.  
This PEPP feature would be in conflict 
with a PPP regime which: 

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No disability coverage 

Distinctive  

► 

Optional death coverage 

Distinctive 

- 

- 

- 

Does not allow for early out-
payments, 
Allows for early out-payments 
without limitation, 
Allows for early out-payments 
in limited situations that do 
not match the limitations 
provided for by the EU 
regulation 
This preferred PEPP feature is 
distinctive: the PEPP framework should 
not allow for disability coverage. This 
PEPP feature would be in conflict with a 
PPP regime which provides for 
disability coverage 
This preferred PEPP feature is 
distinctive: the PEPP framework should 
provide for the possibility of offering 
death coverage.  
This PEPP feature would be in conflict 
with a PPP regime which does not 
allow for death coverage.  

It should be noted that the decumulation phase features have not been analyzed, as, 
according to the preferred PEPP features, the decumulation features should not be 
harmonised at EU level but left up to Member States or providers.  

The preferred PEPP features regarding switching can be qualified as follows: 

Table 26: Preferred PEPP features qualifying as distinctive - switching 

Switching 

Preferred PEPP feature 

Qualification 

Comments 

June 2017 251 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Domestic switching allowed at 
EU level 

Cross-border switching allowed 
at EU level 

Highly 
distinctive 

This preferred PEPP feature is highly 
distinctive: the PEPP framework 
should allow domestic and cross-
border switching. 
This PEPP feature would be in conflict 
with a PPP regime which does not 
allow for domestic and cross-border 
switching. 

c
i
t
s
e
m
o
D

i

g
n
h
c
t
i

w
s

r
e
d
r
o
b
-
s
s
o
r
C

i

g
n
h
c
t
i

w
s

June 2017 252 

 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Comparison between the preferred PEPP features and the PPP features 

The table below presents a comparison between the preferred PEPP features and the PPP features resulting from the tax mapping and 
clustering performed. The preferred PEPP features do not include any harmonisation of out-payments, and therefore the features relating 
thereto are not compared.  

The table focuses on PPPs benefiting from incentives relating to in-payments, therefore PPPs under TEE, TET, TTE or TTT tax regimes are 
excluded from this analysis. This group of PPPs represents seven out of 49 PPPs in six out of 28 Member States. 

Table 27: Comparison between the preferred PEPP features and the PPP features 
Country 

Products  

Overall 
local tax 
system  

Is the 
employer 
able to 
supplement 
the 
payments? 

Age limit for 
the start of 
the 
accumulation 
phase? 

Mandatory 
minimum 
in-
payments 
required? 

Is it 
possible 
to take a 
break? 

Is it 
possible to 
change 
the level 
of in-
payments
? 

PEPP 

Allowed at EU 
level, this 
feature should 
be left up to 
the Member 
States29 

No maximum 
age limit set at 
EU level, 
providers 
should be able 
to set such a 
limit1 

No 
mandatory 
minimum 
fixed at EU 
level but 
limits could 
be set at 
provider 
level1 

Possibility 
of changing 
the level of 
in-
payments1 

This 
feature 
should be 
left up to 
providers: 
no 
mandatory 
minimum 
set at EU 
level1 

Is it 
possible 
to 
redeem 
funds 
before 
pension 
age? 

Early out-
payments 
should be 
allowed 
but 
limited at 
EU level30 

Could the 
product 
provide 
death 
coverage
? 

Death 
coverage 
should be 
offered to 
the 
consumer 
as an 
option1 

Domestic 
switching 

Cross-
border 
switching 

Does the 
personal 
pension 
product 
cover 
disability 
allowance? 

Switching 
should be 
allowed at 
EU level31 

Switching 
should be 
allowed at 
EU level3 

No disability 
coverage32 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czech 

Austria_PZV 

Belgium_LP 

Belgium_PP 

Bulgaria_UVPF 

Bulgaria_PVPF 

Croatia_OPF 

Cyprus_IIP 
Czech 
Republic_SSP 

EEE 

EET 

EET 

EEE 

EEE 

EET 

EEE 

EEE 

N 

N 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

YLS 

YLS 

N 

Y 

Y 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

NTI 

IT 

NTI 

NTI 

NTI 

NTI 

TNP 

NTI 

TNP 

IT 

NTI 

NTI 

NTI 

TNP 

TNP 

NTI 

N 

N 

N 

Y 

O 

N 

O 

Y 

29 Y = Yes, N = No 
30 Y = Yes, YSL = Yes in limited situations, N = No 
31 NTI = No tax impact, IT = Immediate taxation, TNP = Transfer not possible 
32 Y = Yes, N = No, O = Optional 

June 2017 253 

 
 
  
 
                                           
Study on the feasibility of a European Personal Pension Framework 

Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Denmark_Alder 

Denmark_RP 

Estonia_VSF 

Finland_IP 

France_PERP 
France_MadelinTN
S 
France_MadelinAg
r 

ETT 

ETT 

EEE 

EET  

EET 

EET 

EET 

Germany_Riester  EET 

Germany_Rürup 

Hungary_PRS 

Ireland_RAC 

Ireland_PRSA 

Italy_OPF 

Italy_PIP 

Latvia_PPF 

Lithuania_VF 

EET 

EEE 

EET 

EET 

ETT 

ETT 

EET 

EEE 

Luxembourg 

Luxembourg_IPS  EET 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Malta_PPPa 

Netherlands_RBS
A 

Netherlands_RAIn
sD 

Netherlands_RAIn
sA 

Poland_IKZE 

EET 
EET or 
TEE 
EET or 
TEE 
EET or 
TEE 

EET 

Portugal_LifeInsR  ETT 

Portugal_LifeInsH  ETE 

Portugal_PF 

Portugal_PPR 

Romania_SPP 
Slovak 
Republic_PPF 

Slovenia_VSP 

Spain_IPP 

ETE 

ETT 

EET 

EEE 

EET 

EET 

Y 

Y 

Y 

Y 

N 

N 

N 

N 

Y 

Y 

N 

Y 

Y 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

N 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

YLS 

YLS 

YLS 

YLS 

Y 

N 

Y 

YLS 

YLS 

YLS 

YLS 

YLS 

Y 

Y 

N 

N 

N 

N 

Y 

Y 

Y 

N 

Y 

YLS 

Y 

YLS 

Y 

Y 

O 

Y 

Y 

Y 

O 

O 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

TNP 

NTI 

NTI 

NTI 

NTI 

NTI 

IT 

NTI 

IT 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

TNP 

NTI 

NTI 

NTI 

NTI 

TNP 

NTI 

TNP 

NTI 

NTI 

NTI 

TNP 

TNP 

IT 

IT 

NTI 

TNP 

IT 

NTI 

IT 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

TNP 

NTI 

TNP 

O 

O 

Y 

N 

O 

N 

N 

O 

O 

O 

N 

N 

Y 

Y 

N 

Y 

O 

O 

N 

N 

N 

N 

O 

O 

Y 

Y 

Y 

N 

Y 

O 

June 2017 254 

 
 
Spain_MP 

EET 

EET 

Spain_PPA 
United 
Kingdom_SIPP 
United 
Kingdom_Stakeh  EET 

EET 

United 
Kingdom 

Results 

Study on the feasibility of a European Personal Pension Framework 

Y 

Y 

Y 

N 

N 

N 

Y 
Preferred PEPP 
feature not 
distinctive and 
PPP features 
not in conflict 

N 
Preferred PEPP 
feature not 
distinctive and 
PPP features 
not in conflict 

N 

N 

N 

N 
Preferred 
PEPP feature 
not 
distinctive 
and PPP 
features not 
in conflict 

Y 

Y 

Y 

Y 
Preferred 
PEPP 
feature 
should be 
distinctive 
but PPP 
features 
should not 
be in 
conflict 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

NTI 

NTI 

NTI 

TNP 

TNP 

NTI 

O 

O 

O 

Y 
Preferred 
PEPP 
feature not 
distinctive 
and PPP 
features 
not in 
conflict 

Y 
Preferred 
PEPP 
feature 
should be 
highly 
distinctive 
and 29 
PPP 
features 
should be 
in conflict  

Y 
Preferred 
PEPP 
feature 
should be 
distinctive 
and two 
PPP 
features 
should be 
in conflict 

NTI 
Preferred 
PEPP feature 
should be 
highly 
distinctive 
and three 
PPP features 
should be in 
conflict  

NTI 
Preferred 
PEPP 
feature 
should be 
highly 
distinctive 
and 12 PPP 
features 
should be 
in conflict 

O 
Preferred 
PEPP feature 
should be 
distinctive 
but PPP 
features 
should not 
be in conflict 

PPP features compatible with PEPP features from a theoretical point of view 
PPP features in conflict with PEPP features from a theoretical point of view 
PPP features in strong conflict with PEPP features from a theoretical point of view 

June 2017 255 

 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Analysis of the result of the comparison and suggested adapted features 

Analysis of the result of the comparison 

The following table sets out an analysis of the foregoing comparison, detailing the 
compatibility of each preferred PEPP feature with PPP features. This analysis aims to 
determine which preferred PEPP features could be adapted in order to decrease the 
number of features in conflict.  

Table 28: Analysis of the result of the comparison 

Is the employer able 
to supplement the 
payments? 

Preferred PEPP 
features 

Allowed at EU 
level, this 
features should 
be left up to the 
Member States 

Result of 
the 
comparison 

PEPP feature 
compatible 
with all PPP 
features 

Age limit for the start 
of the accumulation 
phase? 

No maximum age 
limit set at EU 
level, providers 
should be able to 
set such a limit 

PEPP feature 
compatible 
with all PPP 
features 

Mandatory minimum 
in-payments required? 

No mandatory 
minimum set at 
EU level but limits 
could be set at 
provider level 

PEPP feature 
compatible 
with all PPP 
features 

Is it possible to 
change the level of in-
payments? 

Possibility of 
changing the 
level of in-
payments 

PEPP feature 
compatible 
with all PPP 
features 

Is it possible to take a 
break? 

This feature 
should be left up 
to providers: no 
mandatory 
minimum fixed at 
EU level 

PEPP feature 
compatible 
with all PPP 
features 

Comments 

This preferred PEPP feature should be highly 
flexible. The PEPP regulation should leave 
this feature up to the Member States. 
Therefore, whether or not the PPP regimes 
allow for employer subsidies, this should 
have no consequences from a tax point of 
view.  
No adaptation of this PEPP feature is 
needed. 

This preferred PEPP feature should be highly 
flexible. There is no age limit set at EU level 
but providers are able to set such a limit. If 
local PPP regimes provide for a maximum 
age limit for the start of the accumulation 
phase, PEPP providers will have to take this 
limit into consideration. 
There should be no PPP features in conflict 
with this PEPP feature.  
No adaptation of this PEPP feature is 
needed. 

This preferred PEPP feature should be highly 
flexible. No mandatory minimum for in-
payments is set at EU level but providers are 
allowed to fix such a minimum. If local PPPs 
regimes provide for mandatory minimum in-
payments, PEPP providers will take this 
feature into consideration. 
There should be no PPPs feature in conflict 
with this PEPP feature. 
No adaptation of this PEPP feature is 
needed. 

This preferred PEPP feature could be 
standardised and could consist in allowing 
the consumer to change the level of in-
payments. If this feature is included in the 
PEPP framework, it could be in conflict with 
the PPP regimes. However, based on the 
information provided by the EY network, we 
have not identified any PPP regimes in the 
scope of our study that provide for a non-
variable level of in-payments.  
No adaptation of this PEPP feature is 
needed. 

This PEPP feature should be highly flexible. 
The possibility for the consumer to take a 
break (i.e., to stop paying contributions) 
should not be regulated at EU level and 
providers should be able to provide for 
restrictions. If local PPP regimes prohibit or 
allow a break, PEPP providers will take this 
feature into consideration accordingly.  
No PPP features should be in conflict with 
this PEPP feature. 
No adaptation of this PEPP feature is 
needed. 

June 2017 256 

 
 
 
Study on the feasibility of a European Personal Pension Framework 

Is it possible to 
redeem funds before 
pension age? 

Early out-
payments should 
be allowed but 
limited at EU level 

Could the product 
provide death 
coverage? 

Death coverage 
should be offered 
to the consumer 
as an option 

Domestic switching 

Switching should 
be allowed at EU 
level 

PEPP feature 
compatible 
with the 
regimes of 
eight 
Member 
States out of 
26 

PEPP feature 
in strong 
conflict with 
the regimes 
of 18 
Member 
States out of 
26 
PEPP feature 
compatible 
with the 
regimes of 
24 Member 
States out of 
26 

PEPP feature 
in strong 
conflict with 
the regimes 
of two 
Member 
States out of 
26 
PEPP feature 
compatible 
with the 
regimes of 
22 Member 
States out of 
26 

PEPP feature 
in conflict 
with the 
regimes of 
two Member 
States out of 
26 

PEPP feature 
in strong 
conflict with 
the regimes 
of two 
Member 
States out of 

This PEPP feature could be standardised. The 
possibility of redeeming funds before 
reaching pension age is limited under 13 out 
of 42 PPP regimes in eight out of 26 Member 
States. 
Depending on the definition of the 
circumstances in which early out-payments 
are allowed, this PEPP feature could be 
compatible with the aforementioned PPP 
regimes. 
If the PPP regimes do not allow the consumer 
to benefit from the redemption of funds 
before pension age under any circumstances 
or if there is no limitation on the possibility 
of redeeming funds, the PEPP features could 
be in conflict with the PPP regimes.  
An adaptation of this PEPP feature will 
be analyzed. 

This PEPP feature could be standardised. 
Indeed, PEPP providers should be able to 
offer optional death coverage, i.e., the 
possibility for an heir or a beneficiary to 
benefit from the PEPP accumulated funds in 
the event of the death of the pension saver. 
This PEPP feature is compatible with a large 
majority of PPP regimes: 39 out of 42 
regimes in 24 out of 26 Member States. 
No adaptation of this PEPP feature is 
needed (taking into account the high 
level of compatibility) 
This PEPP feature could theoretically be in 
conflict with the regimes of two out of 42 
PPPs  in two out of 26 Member States 
(Austria and Lithuania) that do not allow for 
death coverage. 

This PEPP features could be standardised. 
Indeed, PEPP providers should allow the 
transfer of PEPP assets to another domestic 
provider. Based on the information provided 
by the EY network, 36 out of 42 PPP regimes 
in 22 out of 26 Member States allow for 
domestic switching without taxation. 
However, workshop attendees were in favour 
of switching possibilities being limited. 
Depending on the switching conditions 
included in the PEPP framework, some PPP 
regimes may not be compatible with this 
PEPP feature. 
Based on the information provided by the EY 
network, domestic switching triggers 
immediate taxation for three PPPs out of 42 
(one out of two in Belgium, and the PPPs 
studied in Latvia and in Luxembourg) in 
three out of 26 Member States.  
Depending on the PEPP regulation, 
immediate taxation could be assimilated to a 
switching restriction (comparable with 
redemption immediately followed by the 
subscription of a new contract with a new 
provider) 
Based on the information provided by the EY 
network, domestic switching is not allowed 
by the regimes of three out of 42 PPPs (the 
PPPs studied in Cyprus and Lithuania and 
one out of two in Germany) in three out of 
26 Member States.  
This PEPP feature should be in conflict with 

June 2017 257 

 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Cross-border 
switching 

Switching should 
be allowed at EU 
level 

Does the personal 
pension product cover 
disability allowance? 

No disability 
coverage 

26 

PEPP feature 
compatible 
with the 
regimes of 
16 Member 
States out of 
26 

PEPP feature 
in conflict 
with three 
Member 
State 
regimes out 
of 26 

PEPP feature 
in strong 
conflict with 
seven 
Member 
State 
regimes out 
of 26 

PEPP feature 
compatible 
with 20 
Member 
State 
regimes out 
of 26 

PEPP feature 
in strong 
conflict with 
six Member 
State 
regimes out 
of 26 

the PPP regimes that do not allow domestic 
switching.   
An adaptation of this PEPP feature will 
be analyzed. 

This PEPP feature could be standardised. 
Indeed, PEPP providers should allow the 
transfer of PEPP assets to another non-
domestic provider. Based on the information 
provided by the EY network, 25 out of 42 PPP 
regimes in 16 out of 26 Member States allow 
for switching without taxation. 
However, workshop attendees were in favour 
of the switching possibilities being limited. 
Depending on the switching conditions 
included in the PEPP framework, certain PPP 
regimes may not be compatible with this 
PEPP feature. 
Based on the information provided by the EY 
network, cross-border switching triggers 
immediate taxation for five PPPs out of 42 
(the PPPs studied in Ireland, Latvia and 
Luxembourg, and one out of two in Belgium) 
in four out of 26 Member States.  
Depending on the PEPP regulation, 
immediate taxation could be assimilated to a 
switching restriction (comparable with 
redemption immediately followed by the 
subscription of a new contract with a new 
provider). 
Based on the information provided by the EY 
network, cross-border switching is not 
allowed by 12 out of 42 PPP regimes (PPPs 
studied in Austria, Croatia, Cyprus, Estonia, 
Hungary, Slovakia and Spain, and one out of 
three in France, one out of two in Germany 
and one out of two in Italy) in 10 out of 26 
Member States.  
This PEPP feature is in conflict with PPP 
regimes that do not allow domestic 
switching.  
It should be noted that switching may be 
impossible due to practical matters. In such 
cases, the PPP and PEPP features are not in 
conflict.   
An adaptation of this PEPP feature will 
be analyzed. 

This PEPP feature could be standardised. 
Indeed, PEPP providers should not offer 
disability coverage, i.e., the possibility for 
the pension saver to benefit from the PEPP 
accumulated funds in the event of illness or 
invalidity. This PEPP feature is compatible 
with a large majority of PPP regimes: 32 out 
of 42 in 21 out of 26 Member States. 
This PEPP feature could theoretically be in 
conflict with PPP regimes providing disability 
coverage, i.e., 10 out of 42 PPP regimes in 
eight out of 26 Member States. 

An adaptation of this PEPP feature will 
be analyzed. 

Suggested adaptation of PEPP features 

Based on these results, a deeper analysis was performed in order to determine how the 
following preferred PEPP features could be adapted to increase the level of their 
compatibility with the PPP features: 

-  Early out-payments 

June 2017 258 

 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

-  Disability coverage 
-  Domestic and cross-border switching 

Early out-payments  
The preferred PEPP feature is “early out-payments allowed in limited situations”. 

This preferred PEPP feature should be comparable with the PPP regimes that allow for 
early out-payments in limited cases. 
The most common situations in which early out-payments are allowed are: 

-  Disability/invalidity/illness (Finland, France, Ireland, Italy, Latvia, Romania); 
-  Unemployment or expiry of unemployment benefit rights (Finland, France, Italy) 
-  Death of spouse/partner (Finland, France). 

The objective of the PEPP framework is to arrive at a retirement product. This view is 
shared by all stakeholders (from supply and demand sides, as well as regulators and 
European institutions). Therefore, the suggested PEPP feature could be adapted as 
follows: early out-payments not allowed or allowed with limitations.  

With this adaptation, comparison between the PEPP feature and the PPP features gives 
the following result: 20 out of 42 PPPs in eight out of 26 Member States should not be in 
conflict. 

Domestic and cross-border switching 

The preferred PEPP feature is “switching should be allowed”. 

This preferred PEPP feature should only be compatible with PPP regimes that allow for 
domestic and cross-border switching.  
Switching is allowed by most PPP regimes: 

-  Domestic switching is not possible for three out of 42 PPPs (the PPPs studied in 
Cyprus and Lithuania, and one out of two in Germany) in three Member States; 

-  Cross-border switching is not possible for 12 out of 42 PPP regimes (the PPPs 

studied in Austria, Croatia, Cyprus, Estonia, Hungary, Slovakia and Spain, and 
one out of three in France, one out of two in Germany and one out of two in Italy) 
in 10 Member States. 

The objective of the PEPP framework is to facilitate cross-border activities. This is an 
essential characteristic of the PEPP. Therefore, it is suggested not to adapt the preferred 
PEPP feature and to harmonise switching at EU level. It cannot be ruled out that this 
feature could be in conflict with certain local PPP regimes and prevent consumers from 
benefiting from the related tax incentives. However, it is to be noted that it could be in 
contradiction with the applicable EU regulation, in particular with regard to freedom of 
services, since a PEPP with, overall, the characteristics of a given PPP should have access 
to a similar tax regime.  

Disability coverage 

The preferred PEPP feature is “no disability coverage”, which is generally compatible with 
the PPP features.  

This preferred PEPP feature is compatible with 32 out of 42 PPPs in 20 out of 26 Member 
States. In six Member States, this preferred PEPP feature is in conflict with the PPP 
features (Czech Republic, Estonia, Italia, Lithuania, Romania and Slovenia). 

June 2017 259 

 
 
 
 
 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Taking into account the fact that there is no common definition of disability, and in order 
to make this feature less distinctive, one adaptation could have been not to harmonise 
this feature at EU level. 
However its non-harmonisation could lead to limiting the possibilities of switching 
between PEPPs that do not have common disability coverage features. 

Therefore, it is suggested not to adapt the preferred PEPP feature.  

Adapted PEPP ID CARD 

Figure 38: PEPP ID Card - adapted PEPP features 

June 2017 260 

Accumulation phaseDecumulation phaseNo harmonisation►The production of PEPPs should be fully open to asset managers, insurers and banking institutions►Current EU rules applicable to providers should be sufficientProvidersDistributorsAdvice and transparencyIn-payment characteristics►No mandatory minimum set at  EU level but limits could be set at provider level►Possibility of changing the level of in-payments during the accumulation phase►State and employer subsidies allowed at EU level►No maximum age limit for the start of the accumulation phase set at  EU levelPortability and switching►Early out-payments should be possible  but limited or not allowed at EU levelInvestment strategy►Multiple investment options and default investment option should be offered to the consumer but not regulated at  EU level ►Changes in investment strategy should be limited and carefully advised Mitigation of riskEarly out-payments►Need to ensure consumer protection and competitiveness with local products►No full capital guarantee is needed►No disability coverage►Optional death coverage►The distribution of PEPPs should be fully open to all types of distributors►Online distribution should be allowed at EU level►Online distribution without advice should be limited (to PEPPs that are sufficiently simple and safe)►Switching should be allowed at EU level ►Switching should be limited by a mandatory minimum holding period►Switching should be subject to a cost-based, capped charge►Current EU rules should be used as a basis►Advice should be mandatory and free (payable only when specific)►There is a need for an EU information document (set of information determined at EU level) and local information documents 
 
 
 
Adapted analysis of the result of the comparison 

Based on the adapted early out-payments feature and taking into consideration the fact that domestic and cross-border switching should 
be authorised at EU level, the result of the comparison between PEPP features and PPP features is as follows: 

Study on the feasibility of a European Personal Pension Framework 

Table 29: Adapted analysis of the comparison 
Country 

Product  

Overall 
local tax 
system  

Is the 
employer 
able to 
supplement 
the 
payment? 

Age limit for 
the start of 
the 
accumulation 
phase? 

Mandatory 
minimum 
in-
payments 
required? 

Is it 
possible 
to take a 
break? 

Is it 
possible to 
change 
the level 
of in-
payments
? 

PEPP 

Allowed at EU 
level, this topic 
should be left 
up to the 
Member 
States33 

No maximum 
age limit set at 
EU level, 
providers 
should be able 
to set such a 
limit1 

No 
mandatory 
minimum 
fixed at EU 
level but 
limits could 
be set at 
provider 
level1 

Possibility 
of changing 
level of in-
payments1 

This 
feature 
should be 
left up to 
providers: 
no 
mandatory 
minimum 
set at EU 
level1 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 
Czech 
Republic 

Denmark 

Estonia 

Austria_PZV 

Belgium_LP 

Belgium_PP 

Bulgaria_UVPF 

Bulgaria_PVPF 

Croatia_OPF 

Cyprus_IIP 

Czech 
Republic_SSP 

Denmark_Alder 

Denmark_RP 

Estonia_VSF 

EEE 

EET 

EET 

EEE 

EEE 

EET 

EEE 

EEE 

ETT 

ETT 

EEE 

N 

N 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

N 

N 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

33 Y = Yes, N = No 
34 Y = Yes, YSL = Yes in limited situations, N = No 
35 NTI = No tax impact, IT = Immediate taxation, TNP = Transfer not possible 
36 Y = Yes, N = No, O = Optional 

Is it 
possible 
to 
redeem 
funds 
before 
pension 
age? 
Early out-
payments 
should not 
be 
allowed, 
or allowed 
subject to 
limitation 
at EU 
level34 

Could the 
product 
provide 
death 
coverage
? 

Death 
coverage 
should be 
offered to 
the 
consumer 
as an 
option1 

Y 

Y 

Y 

YLS 

YLS 

N 

Y 

Y 

Y 

Y 

Y 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

O 

Y 

Domestic 
switching 

Cross-
border 
switching 

Does the 
personal 
pension 
product 
cover 
disability 
allowance? 

Switching 
should be 
allowed at 
EU level35 

Switching 
should be 
allowed at 
EU level3 

No disability 
coverage36 

NTI 

IT 

NTI 

NTI 

NTI 

NTI 

TNP 

NTI 

NTI 

NTI 

NTI 

TNP 

IT 

NTI 

NTI 

NTI 

TNP 

TNP 

NTI 

NTI 

NTI 

TNP 

N 

N 

N 

Y 

O 

N 

O 

Y 

O 

O 

Y 

June 2017 261 

 
 
  
 
                                           
Finland 

Finland_IP 

France_PERP 
France_MadelinTN
S 
France_MadelinAg
r 

EET  

EET 

EET 

EET 

Germany_Riester  EET 

Germany_Rürup 

Hungary_PRS 

Ireland_RAC 

Ireland_PRSA 

Italy_OPF 

Italy_PIP 

Latvia_PPF 

Lithuania_VF 

EET 

EEE 

EET 

EET 

ETT 

ETT 

EET 

EEE 

France 

Germany 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Luxembourg_IPS  EET 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

United 
Kingdom 

Malta_PPPa 

Netherlands_RBS
A 

Netherlands_RAIn
sD 

Netherlands_RAIn
sA 

Poland_IKZE 

EET 
EET or 
TEE 
EET or 
TEE 
EET or 
TEE 

EET 

Portugal_LifeInsR  ETT 

Portugal_LifeInsH  ETE 

Portugal_PF 

Portugal_PPR 

Romania_SPP 
Slovak 
Republic_PPF 

Slovenia_VSP 

Spain_IPP 

Spain_MP 

ETE 

ETT 

EET 

EEE 

EET 

EET 

EET 

EET 

Spain_PPA 
United 
Kingdom_SIPP 
United 
Kingdom_Stakeh  EET 

EET 

Study on the feasibility of a European Personal Pension Framework 

Y 

N 

N 

N 

N 

Y 

Y 

N 

Y 

Y 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

N 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

Y 

Y 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

YLS 

YLS 

YLS 

YLS 

Y 

N 

Y 

YLS 

YLS 

YLS 

YLS 

YLS 

Y 

Y 

N 

N 

N 

N 

Y 

Y 

Y 

N 

Y 

YLS 

Y 

YLS 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

O 

O 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

N 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

Y 

NTI 

NTI 

NTI 

NTI 

NTI 

TNP 

NTI 

NTI 

NTI 

NTI 

NTI 

IT 

NTI 

IT 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

TNP 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

TNP 

NTI 

NTI 

NTI 

TNP 

TNP 

IT 

IT 

NTI 

TNP 

IT 

NTI 

IT 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

NTI 

TNP 

NTI 

TNP 

TNP 

TNP 

NTI 

NTI 

N 

O 

N 

N 

O 

O 

O 

N 

N 

Y 

Y 

N 

Y 

O 

O 

N 

N 

N 

N 

O 

O 

Y 

Y 

Y 

N 

Y 

O 

O 

O 

O 

O 

June 2017 262 

 
 
Study on the feasibility of a European Personal Pension Framework 

Preferred PEPP 
feature not 
distinctive and 
PPP features 
not in conflict 

Preferred PEPP 
feature not 
distinctive and 
PPP features 
not in conflict 

Results 

Preferred 
PEPP feature 
not 
distinctive 
and PPP 
features not 
in conflict 

Preferred 
PEPP 
feature not 
distinctive 
and PPP 
features 
not in 
conflict 

Preferred 
PEPP 
feature 
should be 
distinctive 
but PPP 
features 
should not 
be in 
conflict 

Preferred 
PEPP 
feature 
should be 
highly 
distinctive 
and 22 
PPP 
features 
should be 
in conflict  

Preferred 
PEPP 
feature 
should be 
distinctive 
and two 
PPP 
features 
should be 
in conflict 

The PEPP framework 
should allow domestic 
and cross-border 
switching, therefore 
compatibility with PPP 
features should not be 
taken into consideration 

Preferred 
PEPP feature 
should be 
distinctive 
but PPP 
features 
should not 
be in conflict 

June 2017 263 

 
 
 
 
 
The figure below presents an overview of the theoretical compatibility of the adapted PEPP (designed as described above) with the PPP tax 
regime  benefiting  from 
incentives  relating  to  in-
payments. 

Study on the feasibility of a European Personal Pension Framework 

2
1 

2 
2 

feature 

There  is  more  than  one 
PPP 
in  conflict 
with  an  adapted  PEPP 
feature  

There  is  only  one  PPP 
feature  in  conflict  with  an 
adapted PEPP feature  

features 

PEPP 
are 
100% 
theoretically 
compatible  with  at  least 
one PPP feature 

Number  of 
strong conflict 

features 

in 

2 

NB:  PPPs  targeting  a 
limited 
population  have  been  taken  into 
limited 
account,  without 
population  feature  being  taken 
into consideration 

this 

June 2017 264 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Suggested implementation/key areas of discussion 

The main objectives of our study were: 

-  To  identify  the  key  successful  features  of  a  future  PEPP,  first  using  statistical 

methods and then via a test with the stakeholders; 

-  To test the compatibility of this potential PEPP vis-à-vis the current features of 
the  existing  PPPs  across  Member  States  and  correlatively  the  potential  access 
of the PEPP to the tax incentives associated with these PPPs. 

In the course of the discussion on the features, key areas which are critical in terms of 
the issuance of a regulation on a PEPP, were identified: 

-  Authorisation; 
-  Distribution, information provided to consumers and investment strategy;  
-  Switching of providers; 
-  Portability and decumulation. 

Authorisation 

At  this  stage  of  the  discussions,  there  seems  to  be  a  consensus  on  the  possibility  of 
having  different  types  of  providers  able  to  provide  the  PEPP  within  the  framework  of 
different  regulations.  In  practical  terms,  this  could  mean  that  the  authorisation 
processes  relating  to  the  different  types  of  providers  may  differ  (banks  versus  funds 
versus insurance companies). 

Although  this  was  outside  the  scope  of  our  study,  we  noted  that  the  authorisation 
processes in the insurance environment should be relatively consistent with the PEPP, 
since insurance companies are already in a position to offer retirement products. 

On  the  other  hand,  in  the  discussion  on  the  PEPP  features,  asset  managers  and 
banking institutions, considered  that death coverage should  be provided as an option 
for  the  customer.  However,  the  longevity  risk,  disability  coverage  and  capital 
guarantees  were  discarded  and  should  not  be  dealt  with  in  the  context  of  the  PEPP 
regulation. In this respect, asset managers37 and banking institutions should only be in 
a  position  to  offer  a  product  which  is  consistent  with  the  PEPP  regulation,  if  death 
coverage is finally discarded or considered as optional in the regulation.  

In addition, the authorisation processes  relating to the possibility for  asset managers 
and  banking  institutions  to  provide  products  under  the  PEPP  framework  should  be 
studied in further detail at this stage. 

Distribution, information provided to consumers, and investment strategy 

Based  on  the  general  assumption  that  the  PEPP  can  be  issued  by  an  insurance 
wrapper  or  via  a  fund,  the  information  provided  to  consumers  as  well  as  the  related 
distribution characteristics (transparency, etc.) should be correlated to the regulations 
applicable to a given type of provider. 

The question remains concerning the comparability of a PEPP  offered by an insurance 
company  and  that  offered  via  a  fund,  since  the  regulations  on  these  categories  of 
providers  are  not  harmonised.  This  could  make  them  difficult  to  compare,  unless  the 
PEPP regulation provides for a common framework.  

37 See table in Appendix 8 on the role of asset managers in the PPP regimes 

mmmll 

 
 
 
 
 
 
                                           
Study on the feasibility of a European Personal Pension Framework 

Switching of providers 

According  to  the  different  stakeholders,  the  PEPP  regulation  should  provide  for 
switching  options.  At  this  stage  of  the  discussion,  and  from  a  tax  standpoint,  this 
should  be  feasible.  However,  the  variety  of  providers  may  present  a  significant 
difficulty.  

Indeed, if it is assumed that the PEPP can be provided by insurance companies and by 
funds,  it  is  not  clear  how  switching  could  work  in  that  context,  since  the  PEPP 
framework will be based on different existing regulations. 

In this respect, it cannot be  ruled out  that, even though switching  may be seen as  a 
general  principle,  the  existence  of  certain  options  relating  to  a  category  of  provider 
could  prevent  consumers  from  switching  from  a  PEPP  offered  by  one  category  of 
provider to another offered by another category of provider. 

Portability and decumulation 

As  already  extensively  discussed,  as  long  as  the  decumulation  features  are  not 
harmonised  at  EU  level,  the  PEPP  should  allow  consumers  to  benefit  from  local  tax 
incentives relating to the PPPs available across Member States, provided, too, that the 
set  of  features  concerning  accumulation  are  designed  in  the  light  of  the  previous 
comments.  

This situation should lead to the coexistence of various sets of features across the EU 
market, and therefore probably a system of “sections” at the level of the providers, for 
the latter to be in a position to access different Member State markets. 

Symmetrically,  in  situations  where  consumers  change  their  tax  residence  from  one 
Member  State  to  another,  this  should  mean  investing  in  different  “sections”  at  the 
level of a given provider who should be in a position to access different Member State 
markets  or,  on  the  contrary,  the  need  for  the  consumer  to  contract  with  a  new 
provider.  

In  other  words,  portability  will  depend  on  the  capability  of  the  providers  to  access 
different  Member  State  markets,  via  the  “section  approach”.  At  this  stage  and  in  the 
context of our study, it has not been determined whether the ability to access various 
Member  State  markets  should  be  compulsory  for  providers  if  they  are  to  offer  the 
PEPP. 

June 2017 266 

 
 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

Analysis of tax sensitivity of five aspects identified by DG FISMA 

Five  aspects  have  been  identified  by  DG  FISMA  as  the  most  relevant  in  order  to 
develop  a  PEPP  framework.  This  section  focuses  on  the  tax  sensitivity  of  selected 
features associated with these aspects: 

Investment strategy; 

-  Distribution; 
- 
-  Cross-border dimension and portability; 
-  Provider switching; 
-  Ways of decumulation. 

Distribution 

Distribution covers the following items: 

- 

Information and transparency: this item includes the information to be 
disclosed to the consumer on the PEPP and on the related costs; 

-  Advice: this item covers the advice to be provided to the consumer in order to 
ensure that the product sold is in line with its needs, notably considering the 
retirement objective of the PEPP and the risks attached to the product; 

-  Distribution channels: this item includes the authorisation of the different PEPP 

providers and the specificities linked to online distribution. 

Based  on  the  analysis  below,  there  is  no  specific  link  between  features  relating  to 
distribution aspects and the fact of benefiting from PPP tax incentives.  

Information/ 
transparency 

Advice 

Distribution 
channels 

Theoretical tax 
sensitivity 
Based on the data 
collected during phase 
1, there is no specific 
link between features 
relating to information 
and transparency and 
the application of a 
given tax regime.  

Based on the data 
collected during phase 
1, there is no specific 
link between features 
relating to advice and 
the application of a 
given tax regime. 
Based on the data 
collected during phase 
1, there is no specific 
link between 
distribution channels 
authorised and the 
application of a given 
tax regime. 

Features  in  line  with 
PEPP ID card38 
Proposal: There is a 
need for an EU 
information 
document (set of 
information 
determined at EU 
level) and local 
information 
documents 
Proposal: Advice 
should be mandatory 
and free (payable 
only when specific 
advice is 
required/requested) 

Proposal: PEPP 
distribution should be 
fully open to all types 
of distributors 

Proposal: Online 
distribution should be 
allowed at EU level 

Comments 

Based on the results of phase 2, there 
is no PPP tax regime that would not be 
in line with this preferred PEPP feature. 

Based on the results of phase 2, there 
is no PPP tax regime that would not be 
in line with this preferred PEPP feature. 

Based on the results of phase 2, there 
is no PPP regime that would not be in 
line with this preferred PEPP feature. 

A given PPP may involve certain types 
of providers and distributors, but there 
is no correlation between benefiting 
from tax incentives and distribution 
channels. 

38 Figure 38: PEPP ID Card - adapted PEPP features 

June 2017 267 

 
 
 
 
 
 
 
 
                                           
Study on the feasibility of a European Personal Pension Framework 

Additionally,  it  should  be  mentioned  that  the  information  disclosure  and  advice 
requirements are related to the regulations applicable to a given type of provider and 
that our study did not cover the aspects of these regulations. 

Investment strategy 

Investment strategy covers the following items: 

-  Guaranteed capital: this item covers the protection offered to the consumer 

guaranteeing the amount accumulated; 

-  Guaranteed minimum return: this item covers the protection offered to the 

consumer guaranteeing a minimum return on investment; 

-  Provider investment rules: this item covers the rules or market practices that 

apply to providers concerning rules or limitations on asset allocation. 

Based on the analysis below, these features could theoretically have an impact on the 
access of the PEPP to a given PPP tax regime. However, based on the data collected, 
these features are not regulated at Member State level, but are left up to providers. 

Guaranteed 
capital 

Theoretical tax 
sensitivity 
If a PPP tax regime 
includes a capital 
guarantee related to 
the tax incentive, the 
harmonisation of this 
feature in the PEPP 
framework could 
prevent the PEPP from 
having access to 
certain local tax 
incentives.  

Features  in  line  with 
PEPP ID card39 
Proposal : No full 
capital guarantee 

Including a 
guaranteed capital 
feature in the EU 
framework could lead 
to excluding certain 
providers (notably 
asset managers) 

Proposal: No 
harmonisation at EU 
level  

Guaranteed 
minimum 
return 

If a PPP tax regime 
includes a minimum 
return guarantee 
related to a tax 
incentive, the 
harmonisation of this 
feature in the PEPP 
framework could 
prevent the PEPP from 
having access to 
certain local tax 
incentives. 

Provider 
investment 
rules 

From a theoretical 
point of view, 
benefiting from tax 
incentives could be 
subject to investment 
rules , if such a 

Proposal: No 
harmonisation at EU 
level 

39 Figure 38: PEPP ID Card - adapted PEPP features 

Comments 

The tax mapping performed in phase 2 
did not gather any information on this 
feature as it was limited to the taxation 
of pension savers. 
However, such a requirement in order 
to benefit from tax incentives was not 
raised during the analysis of the 
different tax regimes applicable to PPPs. 
Based on the economic data collected 
during phase 1, it was observed that 
such a feature is usually decided at 
provider level and not at PPP regulation 
level.  
Based on these elements, the adapted 
PEPP feature should not prevent the 
PEPP from benefiting from PPP tax 
regimes.  
The tax mapping performed in phase 2 
did not gather any information on this 
feature. 
However, such a requirement in order 
to benefit from tax incentives was not 
raised during the analysis of the 
different tax regimes applicable to PPPs. 
Based on the economic data collected 
during phase 1, it was observed that 
such a feature is usually decided at 
provider level and not at PPP regulation 
level.  
Based on these elements, the adapted 
PEPP feature should not prevent the 
PEPP from benefiting from PPP tax 
regimes. 
The tax mapping performed in phase 2 
did not gather any information on this 
feature.  
However, such a requirement in order 
to benefit from tax incentives was not 
raised during the analysis of the 

June 2017 268 

 
 
 
 
 
 
 
                                           
Study on the feasibility of a European Personal Pension Framework 

condition is included 
in the PPP tax regime 
concerned.  
Based on the data 
collected during phase 
1, no specific link was 
observed between 
providers’ investment 
rules and the 
application of a given 
tax regime. 

different tax regimes applicable to PPPs. 
Based on the economic data collected 
during phase 1, it was observed that 
such a feature is usually decided at 
provider level and not at PPP regulation 
level.  
Based on these elements, the adapted 
PEPP feature should not prevent the 
PEPP from benefiting from PPP tax 
regimes. 

Cross-border dimension – portability 

Portability has been defined in this study as the possibility for a mobile pension saver 
to continue to benefit from tax relief in relation to a PPP subscribed in a given Member 
State, in another Member State. 
In  the  context  of  this  report,  this  possibility  is  discussed  during  the  accumulation 
phase.  Indeed,  during  the  decumulation  phase,  the  tax  treatment  applicable  to 
pension  income  depends  on  the  pension  saver’s  tax  residence  when  receiving  out-
payments (and usually the income is taxable).  

Given the variety of the tax systems described in phase 1 and analyzed in phase 2, if 
a pension saver moves from one Member State to another, the in-payments paid after 
the  change  of  tax  residence  will  not  continue  to  benefit  from  tax  incentives  if  the 
features  of  the  PEPP  are  not  modified  and  adapted  to  be  consistent  with  the  local 
regulations on locally available PPPs.  

Features  in  line  with 
PEPP ID card40 
Proposal: Portability 
at EU level 

Portability 

Theoretical tax 
sensitivity 
Portability of the PEPP 
across EU (i.e. access 
for the PEPP to the 
local tax incentives 
related to available 
PPPs) will depend on 
the level of 
compatibility and 
adaptability of the 
PEPP features to local 
tax regulations. 

Comments 

Based on the clustering performed 
during phase 2, the variety of the PPP 
features across the EU means that a 
PEPP with fully harmonised features 
would not benefit from local tax 
incentives.  

Based on the adapted PEPP features, 
the analysis of the different Member 
States’ tax legislation shows that the 
PEPP should theoretically benefit from 
tax incentives in 9 Member States and 
would benefit from tax incentives in 14 
additional Member States if only one 
feature is adapted41.  

In  the  context  of  the  PEPP  and  the  section  approach  discussed,  the  portability  of  the 
product  will  also  depend  on  the  provider’s  capacity  to  adapt  the  non-harmonised 
features,  in  order  to  give  the  pension  saver  access  to  local  tax  incentives  depending 
on the latter’s tax residence. 

Provider switching 

Provider switching covers the following items: 

40 Figure 38: PEPP ID Card - adapted PEPP features 
41 See Assessment of preferred PEPP features in comparison with local PPP legislation 
and tax regimes 

June 2017 269 

 
 
 
 
 
 
 
 
 
                                           
Study on the feasibility of a European Personal Pension Framework 

-  Domestic switching: this item covers the possibility of domestic switching which 
has been defined as the possibility for a non-mobile pension saver to transfer 
its investments to another provider in the same Member State; 

-  Cross-border switching: this item covers the possibility of cross-border 

switching which has been defined as the possibility for a non-mobile pension 
saver to transfer its investments to a provider in another Member State; 

-  Switching frequency: this item covers frequency limitations relating to 

switching possibilities. 

-  Switching costs: this item covers the related costs. 

Based on the analysis below, the features relating to these items are mostly not in line 
with local tax incentives related to available PPPs. 

Features  in  line  with 
PEPP ID card42 
Proposal:  Domestic 
switching allowed 

Proposal: 
border 
allowed 

Cross-
switching 

Proposal:  Switching 
a 
limited 
mandatory  minimum 
holding period 

by 

Comments 

The adapted feature could prevent 
the PEPP from benefiting from tax 
incentives in six Member States (six 
out of 42 PPP regimes in six out of 26 
Member States do not allow domestic 
switching or provide for immediate 
taxation)43.  

The adapted feature could prevent 
the PEPP from benefiting from tax 
incentives in 14 Member States (17 
out of 42 PPP regimes in 14 out of 26 
Member States do not allow cross-
border switching or provide for 
immediate taxation) 44. 

Based on the tax mapping performed, 
switching frequency was not directly 
stated as a condition for benefiting 
from tax incentives.  
However, it should be noted that 
some PPP regimes provide for a 
minimum contract duration (for 
example, 10 years for Belgium_LP 
and Belgium_PP, 10 years for 
Hungary_PRS, 10 years for 
Luxembourg_IPS). 

Proposal:  Switching 
subject  to  a  cost-
based, capped charge 

Based on the tax mapping performed, 
switching costs were not directly 
stated as a condition for benefiting 
from tax incentives.  

Domestic 
switching  

Cross-border 
switching 

Switching 
frequency 

Switching 
costs 

there 

there 

is  a 

is  a 

Theoretical tax 
sensitivity  
Based  on 
the  data 
collected  during  section 
link 
1, 
features 
between 
relating to the possibility 
of  switching  and  the 
application  of  a  given 
tax  regime  during  the 
accumulation phase. 
Based  on 
the  data 
collected  during  section 
link 
1, 
between 
features 
relating to the possibility 
of  switching  and  the 
application  of  a  given 
tax  regime  during  the 
accumulation phase. 
From a theoretical point 
of view, tax incentives 
could be subject to a 
limitation on switching 
frequency. However, 
based on the data 
collected during section 
1, no specific link 
between switching 
frequency and the 
application of a given 
tax regime was 
observed. 
From a theoretical point 
of view, the cost of 
switching is more a rule 
applicable to PEPP 
providers than a 
condition for benefiting 
from tax incentives. 
Based on the data 
collected during section 
1, there is no specific 
link between switching 

42 Figure 38: PEPP ID Card - adapted PEPP features 
43 Table 28: Analysis of the result of the comparison, 
44 Table 28: Analysis of the result of the comparison, 

June 2017 270 

 
 
 
 
 
                                           
Study on the feasibility of a European Personal Pension Framework 

cost features and the 
application of a given 
tax regime. 

Additionally,  it  should  be  noted  that  this  discussion  does  not  cover  difficulties  that 
could potentially arise in  the event of switching from  one type of provider to another 
type of provider. 

Ways of decumulation 

Based on the analysis below, the features relating to this item are very sensitive from 
a  tax  standpoint  and  harmonisation  at  EU  level  could  prevent  the  PEPP  from  having 
access to local tax incentives related to available PPPs. 

Decumulation 
options 

Theoretical 
sensitivity 

tax 

Based on the data 
collected during 
section1, decumulation 
options are closely 
linked to the tax 
treatment of the 
product. 
Indeed, eight out of 42 
PPP regimes in five out 
of 26 Member States 
provide for a mandatory 
decumulation option by 
annuities46. 
Moreover, the tax 
sensitivity of this 
feature is increased by 
the fact that six out of 
49 PPP regimes provide 
for a default 
decumulation option.  

Features  in  line 
with 
ID 
PEPP 
card45 
Based on 
stakeholders’ 
views, the EU 
framework should 
not be 
harmonised in 
this respect. 

Comments 

Given the variety of decumulation 
features across the EU, stakeholders 
were not in favour of harmonising the 
PEPP framework in this respect.  

It should be noted that an EU framework 
providing for diverse ways of 
decumulation would likely prevent the 
PEPP from having access to the PPP 
regimes providing for a mandatory 
decumulation option. 

However, when a decumulation option is 
mandatory, this option is always by 
annuities.  
Moreover, it should be noted that 48 out 
of 49 PPP regimes in the scope of our 
study offer at least the possibility of out-
payments by annuities.  

Additionally, it should be noted that including a mandatory option for out-payments by 
lifelong annuities could lead to excluding certain providers (notably asset managers). 

45 Figure 38: PEPP ID Card - adapted PEPP features 
46 Figure 25: Decumulation options in common identified 

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Assessment of the market potential for a PEPP in the EU  
Leveraging  on  the  findings  of  the  previous  sections,  this  section  seeks  to  assess  the 
market potential of a PEPP. 

In this context, this section aims to: 

  Describe  the  main  assumptions  behind  our  approach  and  discuss  how  the 

results should be interpreted  

  Explain the methodology used to estimate the market size  

 

Illustrate the results of the market size estimation 

Main assumptions  

The estimation depends on the consumer  choice model developed  previously and the 
quality of the data supporting it. Data were available for 36 PPPs covering 24 Member 
States.  While  this  sample  is  representative  of  the  EU  market  heterogeneity,  the 
sample size is small from a statistical perspective. 

The  estimation  findings  are  more  robust  at  EU  level.  Only  average  effects  are 
estimated and are less robust when extrapolated at Member State level 

When assessing the market size of a PEPP, the following was assumed: 

The feature effects are modelled on the observation of products with the highest MPI. 
It is assumed that the PEPP will have an MPI similar to the PPP with the highest MPI. It 
may be expected that if a PEPP is able to capture economies of scale, it will be more 
successful than existing products. This will lead to a larger market size. 
The PEPP would receive the same favorable tax treatment as national products in any 
given  Member  State.  According  to  our  consumer  choice  model,  if  this  were  not  the 
case, investments in the PEPP would be marginal. 
Economic dynamics (growth in GDP and household financial assets) are not taken into 
account  in  the  assessment,  hence  the  market  potential  is  underestimated  in  this 
sense. 

The market potential has been estimated for the 28 Member States. This estimation is 
based  on  the  MPI.  In  the  least  mature  PPP  markets  such  as  Hungary,  Greece  and 
Cyprus,  not  enough  data  were  available  to  compute  an  MPI.  Furthermore,  no  data 
were identified to compute an MPI for the Luxembourg PPP market. In these  Member 
States,  the  MPI  was  assumed  to  be  equal  to  the  lowest  value  of  the  computed  MPI 
(i.e. the value of the Poland_IKZE). Because of the small size of these Member States, 
a  sensitivity  analysis  revealed  that  any  change  in  this  assumption  had  marginal 
impacts on the PEPP market estimates. 

The estimated market potential corresponds to the market potential of the PEPP. The 
model does not consider the effects of the development of the PEPP on other products. 
Thus  crowding-out  effects  (i.e.  net  transfers  from  national  products  to  the  PEPP)  are 
not taken into account. 

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 Methodology overview  

Our consumer choice model establishes a relationship between the propensity to save 
in  a  PPP  -  as  measured  by  the  penetration  index  -,  tax  relief  and  a  dummy  variable 
capturing the effect of product features deemed superior by  the consumer. To assess 
the market potential of the PEPP the following approach was followed:  

1.  It was assumed that the PEPP would reach the same level of penetration as the 
Riester  in  each  market.  This  assumption  supposes  that  all  consumers  in  each 
market  have  access  to  the  most  successful  PPP  product  when  choosing  to 
invest in a PPP.  

2.  The  increase  in  the  penetration  index  was  converted  into  an  increase  in  the 
proportion  of  AuM  over  HHFA  in  each  Member  State  to  obtain  an  estimate  of 
the PEPP AuM at EU level  

Conversion of the penetration index into AuM over HHFA 

Figure  39  illustrates  the  relationship  between  AuM  over  HHFA  and  our  penetration 
index. According to this figure, an increase in the penetration index of 1 point leads to 
an increase in the share of AuM in HHFA of 0.04.  

Figure 39 Relation between AuM/ HHFA and the penetration index 

Estimation of the market size  

Based  on  the  penetration  index  (see  appendices  for  details)  and  on  the  modelling  of 
the  consumer  choice  issue  (see  appendices  for  details),  a  situation  was  simulated 
where  consumers  had  the  same  incentives  as  in  the  case  of  the  product  with  the 
highest MPI in our sample.  

The  additional  market  potential  if  a  PEPP  available  in  all  EU  Member  States  allowed 
consumers  to  effectively  reach  the  current  product  technology  frontier  (i.e.  meet  the 
market  performance  of  the  Riester  product)  ranges  from  EUR 0.4  trillion  to  EUR 1 

June 2017 273 

 
 
 
 
 
 
 
 
Study on the feasibility of a European Personal Pension Framework 

trillion.  It  is  expected  that  on  average  the  increase  would  amount  to  EUR 0.7 
trillion47.  

This  estimate  is  based  on  current  EU  financial  assets,  i.e.  it  does  not  make  any 
assumption about the growth of overall financial assets in the future. 

47  According  to  the  simulation,  the  increase  in  the  PEPP’s  market  size  is  expected  to  amount  to  EUR 0.7 
trillion.  This  mid-point  estimate  falls,  with  a  95%  probability,  within  a  range  from  EUR 0.4  to  just  under 
EUR 1 trillion. This range derives from the estimation results provided ahead. The confidence interval of the 
tax incentive’s coefficient estimate was used to assess this range as tax incentives are mainly responsible 
for the market size 

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Conclusion 

All  EU  Member  States  are  facing  constant  challenges  with  regard  to  ageing 
populations, pension sustainability and adequacy of the pension regimes. 

In  the  context  of  a  challenging  economic  environment  with  low  rates  and  different 
trends  in  government  budgets,  anticipating  the  evolution  of  pensions  only  within  the 
framework  of  the  first  and  second  pillars  does  not  appear  to  be  sufficient  to  fill  the 
pension gap. Hence, the development of supplementary pillar 3 products has become 
a major issue for Member States and European institutions that is likely to continue in 
the next decade.  
Aware  of  these  fundamental  challenges,  the  European  Commission  has  launched  a 
study  with  EY  on  the  feasibility  of  a  European  Personal  Pensions  framework  in  the 
context of the Capital Market Union (CMU) action plan. The following conclusion aims 
to highlight the main findings of this study. 

The  first  section  of  our  study  describes  and  analyses  the  current  PPP  market,  for  a 
better understanding of the Member States’ tax environments and the identification of 
PPP factors of success and key product features. The second section aims to help the 
European  Commission  to  design  the  product  features  of  the  PEPP  with  two  main 
objectives:  (i)  encourage  cross-border  activities  through  portability  and  provider 
switching,  taking  into  consideration  the  burden  of  tax  obstacles  and  (ii)  design  a 
product with a clear retirement objective and long-term investment strategy. This was 
notably  achieved  through  a  dedicated  workshop  with  stakeholders,  gathering 
expectations  from  supply  and  demand  sides.  Additionally,  our  team  performed  a 
market potential assessment for the Pan-European Personal Pension Product (PEPP). 

For the purposes of our study, Personal Pension Products (hereafter “PPPs”) have been 
defined as “non-state based (so excluding first and second pillar pensions) retirement 
financial products which: 

  are  based  on  a  contract  between  an  individual  saver  and  a  non  state-based 

entity on a voluntary basis, with an explicit retirement objective; 

  provide for capital accumulation until retirement, and where the possibilities for 

early withdrawal are limited; 

  provide  an  income  to  savers  after  retirement,  the  form  of  which  can  be  laid 

down in national law such as annuitisation or lump sums”. 

We  selected  and  anlysed  49  products  in  28  Member  States  corresponding  to  these 
criteria  in  order  to  assess  the  feasibility  of  a  product  harmonised  at  EU  level  and  to 
determine its characteristics.  
The main findings of our study can be summarised as follows: 

-  The  mapping  of  tax  regimes  showed  that  the  current  regulatory 

framework for national products is highly heterogeneous.  

-  Access to tax incentives must be sought to achieve a successful PEPP; 
-  Accumulation  phase  features  should  be  harmonised  in  order  to  allow 
access  to  tax  incentives  and  generate  economies  of  scale  for  both 
providers and consumers; 

-  The  provision  of  PEPPs  should  be  opened  up  to  a  wider  range  of 

(regulated) providers to enlarge the PEPP market; 

-  Portability  and  provider  switching  should  be  allowed  for  an  attractive 

PEPP and a fluid EU market. 

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Additional  challenges  emerged  from  these  parameters,  notably  determining  the 
appropriate  type  of  regulation  and  authorisation  procedures  that  should  apply  to  the 
PEPP  and  to  the  different  types  of  providers,  even  though  these  aspects  are  not 
covered by our study. 

Access to tax incentives  on  in-payments:  a key element  of  a  successful Pan-
European Personal Pension Product (PEPP) 

The  market  overview48  highlights  the  fact  that  access  to  tax  incentives  triggers  a 
higher level of contribution to a given PPP. This objective was confirmed by the results 
of the workshop. 

From a tax perspective, our study shows that, despite the significant heterogeneity of 
tax  legislation  across  Member  States,  a  majority  of  PPPs  fall  under  the  same  overall 
tax regime, i.e., EET or ETT. 37 out of 49 PPPs in 22 out of 28 Member States benefit 
from  incentives  on  in-payments  and  are  subject  to  taxation  during  the  decumulation 
phase.  

Thus, the need for the PEPP to benefit from tax incentives on in-payments has driven 
the  analysis  of  features  that  should  be  harmonised  at  EU  level  so  that  PEPP  holders 
can have access to local tax incentives.  

The  harmonisation  of  the  accumulation  phase  features,  a  prerequisite  to 
benefiting from tax incentives and economies of scale 

The analysis of the PPP features shows that decumulation features (e.g. pension age) 
are more diverse than features during the accumulation phase. Indeed, accumulation 
features  are  generally  flexible  (e.g.,  no  mandatory  holding  period,  possibility  of 
changing  the  level  of  in-payments)  and  the  retirement  objective  of  the  product  is 
generally ensured by national legislation through limitations on early out-payments49. 
In  other  words,  it  may  be  difficult  to  harmonise  requirements  linked  to  the 
decumulation phase. At the same time, features linked to the accumulation phase are 
less diverse and the harmonisation of these aspects could be easily achieved.  

During  the  workshop,  stakeholders  shared  this  analysis  and  were  in  favour  of  the 
harmonisation  of  the  accumulation  features  but  considered  that  regulation  of 
decumulation features should be left up to Member States. 

Harmonisation  focusing  on  the  accumulation  phase  should  allow  the  PEPP  to  benefit 
from  tax  incentives  if  the  selection  of  the  features  harmonised  is  not  too  broad  for 
adaptation  to  national  tax  environments  by  the  providers.  In  particular,  investment 
options  and  the  mitigation  of  investment  risks  should  not  be  fully  harmonised,  as 
these features could theoretically have an impact on the access of the PEPP to a given 
PPP tax  regime and based on the data we collected, these features are generally left 
up to the providers.  
However,  only  ambitious  harmonisation  should  allow  providers  and  consumers  to 
benefit from economies of scale and ensure the attractiveness of the product from an 
economic perspective.  

48 The main driver of consumer choice when it comes to PPP investment appears to be 
tax incentives.- see appendix 2 for a detailed analysis 
49 43 PPPs out of 49 in 24 out of 28 Member States: 8 PPP regimes do not allow early 
out-payments, 13 PPP regimes allow early out-payments in limited situations, 22 PPP 
regimes allow early out-payments but under a detrimental tax regime. 

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The challenge of opening up the market to other PEPP providers 

During the workshop, attendees were in favour of a PEPP provided by different types 
of  providers.  It  should  be  noted  that,  currently,  the  PPPs  analysed  in  this  study  are 
mostly  provided  by  insurers  and  pension  funds  and  that  opening  up  the  market  to 
bank institutions and asset-managers leads to additional challenges.  
The  PEPP  features  harmonised  at  EU  level  should  be  aligned  with  this  objective  to 
include  other  providers.  Additional  legal  and  regulatory  matters  need  to  be  further 
analysed,  particularly  regulatory  aspects  such  as  authorisation  and  supervision, 
switching  between  different  types  of  providers  and  product  comparability  (including 
advice and information disclosure).  

The challenge of the portability and provider switching objectives 
The  portability  objective  is  driven  firstly  by  harmonisation  constraints.  Indeed,  a 
minimal set of harmonised features would not allow PEPP holders to keep their initial 
product in the event of a change of  tax residence, if the new Member State provides 
for mandatory features that differ strongly from those set as mandatory by the initial 
Member  State.  The  PEPP  should  be  sufficiently  flexible  to  accommodate  for  national 
tax requirements. 
Secondly, portability would only be ensured if the provider is able to adapt the initial 
PEPP  subscribed  to  the  new  Member  State  requirements.  However,  the  authorisation 
aspects linked to this capability are not in the scope of this study. 

When  it  comes  to  switching,  this  objective  could  only  be  achieved  by  an  ambitious 
level of harmonisation. Additionally, the implementation of switching would be directly 
impacted  by  the  opening-up  of  the  provision  of  PEPPs.  Indeed,  switching  from  one 
type  of  provider  to  another  will  lead  to  further  challenges,  notably  regarding  the 
comparability of the PEPP and its legal feasibility when the new provider cannot offer 
the  same  types  of  features  as  the  previous  one  (e.g.,  guaranteed  capital).  As  a 
consequence, switching between different types of providers would lead to subscribing 
a  new  PEPP  with  different  product  features,  if  the  PEPP  framework  provides  for  the 
possibility of such a transfer. 

The strong market potential of the PEPP  

Based on the current situation of the EU market and the results of the workshop, there 
is  clearly  a  need  for  a  PEPP,  i.e.,  a  standardised  personal  pension  product  that  could 
be marketed across the EU.  
The market potential assessment performed by EY suggests that the PEPP would, over 
time,  generate  up  to  EUR 0.7  trillion  of  AuM  in  a  scenario  where  the  PEPP  design 
allows  its  pension  savers  to  benefit  from  the  same  tax  incentives  as  those  related  to 
existing PPPs.  

In the context of a substantial gap in Europe’s pension savings, the European initiative 
of creating a PEPP framework should definitely be promoted.  

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DOI: 10.2874/342225 
ISBN: 978-92-79-62029-4 

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