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Member States upon request addressed to the PEPP pro- prejudice to stricter applicable sectorial law) Commission’s Recommendation on the tax treatment of personal pension products, including the PEPP
vider. - At the time of decumulation, PEPP providers and
- Different forms of outpayment are possible (and distributors will have to offer the PEPP saver personalised The Commission encourages Member States to grant the same tax treatment to PEPP as is currently granted to similar
the saver can change his/her chosen outpayment form). benefit projections, including a personal recommenda- existing national products, even if the PEPP does not fully match the national criteria for tax relief.
- PEPP providers are encouraged to consider sus- tion to the PEPP saver on his or her optimal form of out- Member States are also invited to exchange best practices on the taxation of their current personal pension products
tainability factors in their investment decisions and risk payments. which should foster convergence of tax regimes.
management systems. - Insurance intermediaries registered under the
IDD and investment firms authorised in accordance with Along with the PEPP Regulation, in April 2019 the European Parliament adopted a Resolution on tax treatment of pen-
Some key elements from an intermediary perspective MiFID II for the provision of investment advice may dis- sion products, including the PEPP. The EP calls on the Council to elaborate proposals regarding incentives for PEPP sav-
and on which BIPAR focused during the discussions: tribute PEPPs within the territory of a host Member State ers with a view to enhancing the uptake of the PEPP. Parliament suggests that the following approaches be considered:
under FOS or FOE, provided they do so in compliance
- For insurers and insurance intermediaries who with the relevant rules and procedures established by or - analysing existing tax incentives for personal pension products and assessing their costs, effectiveness and
distribute PEPPs, most of the IDD’s information require- under the IDD / MiFID II. redistributive effects, and, where applicable, addressing inefficiencies and regressive effects;
ments and conduct of business rules, as well as the - Regarding Product Oversight and Governance, - granting the same tax relief to PEPP as that granted to national personal pension products, even in cases where
IDD’s IBIPs chapter apply (with the exception of the rules PEPP distributors shall have in place adequate arrange- PEPP features do not fully match all the national criteria;
regarding advice, information conditions, POG and exe- ments in place to obtain the information and to under- - granting specific tax relief to PEPP, harmonised at Union level, to be laid down in a multilateral tax agreement
cution-only). These IDD rules apply unless IDD was imple- stand the characteristics and identified target market of between Member States.
mented in a stricter way at national level. Most of the each PEPP.
PEPP Regulation’s distribution and information require- The EP does recognise that tax is a Member State competence, but also recalls that Member States have the opportunity
ments also apply to insurers and insurance intermediar- Level II to take part in enhanced cooperation.
ies that distribute PEPPs, except for the PEPP suitability
test (the IDD suitability test applies instead). There is no EIOPA is currently working on the level 2 of the PEPP
single distribution regime with general application of the Regulation. It has to provide technical advice to the Next steps
MiFID II inducement rules (including ban on commission) European Commission by August 2020 on:
as had been proposed by the European Parliament. - the PEPP information documents: the pre- The Regulation was published in the Official Journal of the EU on 25 July 2019 and entered into force 20 days after pub-
- For investment firms that provide advice and contractual PEPP KID and the annual PEPP Pension lication. The Regulation will apply 12 months after the publication of the delegated acts in the Official Journal.
distribute PEPP, the MiFID II rules on conflict of interest, Benefits Statement
general principles and information to clients, suitability/ - the types of costs and charges to be included According to the Commission, the first PEPPs are expected to come on the market soon after the date of application of
appropriateness and reporting to clients apply, as well as withing the 1% cap for the Basic PEPP. Under discussion the Regulation, i.e. mid- or end 2021.
most of the PEPP distribution and information require- here is whether advice costs should be withing the cap.
ments (here also except for the PEPP suitability test as the - risk-mitigation techniques
MiFID II suitability test applies instead). - supervisory reporting and cooperation between
- Ancillary insurance intermediaries cannot distrib- NCAs and EIOPA
ute PEPP. - EIOPA’s product intervention powers “With PEPP in place, we estimate that the European mar-
- There is mandatory advice (with a suitability test) - reporting requirements for PEPP providers ket for personal pension products could triple in size by
and a demands and needs test for PEPP providers and 2030. This is roughly from €700 billion now to €2.1 trillion
distributors, for all PEPPs (also for the “Basic PEPP” and EIOPA launched two public consultations in this respect. in 2030. And this is twice the growth that is expected to
when using automated systems). PEPP providers and dis- BIPAR provided input, focusing on the cost cap of the take place without PEPP.”
tributors have to ensure and demonstrate to authorities Basic PEPP and on the PEPP information documents. (Commission’s Vice-President Valdis Dombrovskis
on request that natural persons giving advice on PEPP BIPAR also participated in EIOPA’s public hearing on PEPP speech: “Impact of PEPP on EU Capital Markets and Sus-
possess the necessary knowledge and competence to in February 2020. tainable Pensions Income” at the Nordic-Baltic Confer-
fulfil their obligations under the PEPP Regulation (without ence on 23 April 2019)

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