Europe is facing an unprecedented demographic challenge. For every retired person in 2060, there will only be two people of working age, compared to four today. Our social and welfare systems are already coming under pressure. Part of the answer lies in occupational and personal pension schemes complementing state-based pensions.

However, the European market for personal pensions is currently fragmented and uneven. The offers are concentrated in a few Member States, while in some others they are nearly non-existent. This variation in supply is linked to a patchwork of rules at EU and national levels, which impede development of a large and competitive EU-level market for personal pensions.

This is the reason why the Commission launched today a proposal that will lay down the foundations to offer consumers a new pan-European option to save for retirement.

The proposal will equip pension providers with the tools to offer a simple and innovative Pan-European Personal Pension Product. This new type of voluntary personal pension is designed to give savers more choice when they are putting money aside for old age and provide them with more competitive products. Consumers will benefit from strong information requirements and distribution rules, also online.The PEPP will be portable between Member States, i.e. PEPP savers will be able to continue contributing to their PEPP when moving to another Member State.

Pan-European Personal Pension Products will have the same standard features wherever they are sold in the EU and can be offered by a broad range of providers, such as insurance companies, banks, occupational pension funds, investment firms and asset managers. They will complement existing state-based, occupational and national personal pensions, but not replace or harmonise national personal pension regimes.

The Commission is also today recommending that Member States grant the same tax treatment to this product as to similar existing national products to ensure that the Pan-European Personal Pension Products get off to a flying start.

Press release - Commission launches a new pan-European personal pensions label to help consumers save for retirement

Questions and answers

Factsheet

DG FISMA website on Personal Pensions Products

CMU Action Plan Mid-Term Review