Global Invest Forum 2019: Roadblocks to PEPP

On the 10/14/19 at 7:36AM


Tuba Raqshan

Pension fund experts argue that a Pan-European Personal Pension Product (PEPP) would work only if there was cooperation among the European nations regarding fundamental policy issues.

At L’Agefi’s Global Invest Forum 2019, Matti Leppälä, CEO, Pensions Europe, revealed that European pensions policy landscape faces several fundamental issues. “EU member states should decide on social, pension and taxation policies, which go together and are crucial for the future of PEPP. Without tax support, PEPP success will be difficult. People realise that their first pillar and occupational second pillar pension plans are there and only a very small minority is in the third pillar of personal pension plans. Changes in the pension market means that many don’t have access to occupational and supplementary pensions – highlighting the need for PEPP,” he added.

The success of PEPP will depend on creating a meaningful product, which could be applicable across Europe, said Tobias Buecheler, Head of regulatory strategy, Allianz SE. “We have to also collectively and individually ensure that all tech and security laws are followed and integrated into the product,” he pointed out.

Dominique de Préneuf, CEO, AFG - French Asset Management Association, said that traditional pension systems are facing several troubles. “The first and second pillars are suffering. We need to give an opportunity to make money in the third pillar and PEPP could do that. However, there are several obstacles such as the proposed fee cap and tax benefits, as PEPP should be granted the same benefits as local pension funds,” he explained.

Gerard Riemen, general manager, Pensioenfederatie, a federation of the Dutch pension funds, pointed out that instead of a pan-European plan, there should be a step-by-step approach to have a common denominator addressing current issues. “The challenges are on different levels for each country and the common ground is ageing demographics, sustainability, EU challenge; protection of social and labour laws – all while respecting the existing infrastructure in the EU states,” said Riemen.

Katarina Ivankovic Kneževic, director for social affairs, directorate general for employment, social affairs and inclusion, European Commission, said that the deadline for PEPP products would be 2022.  “We need a system not only for well-developed supplementary pension plans but also to tackle the huge difference between pension plans in parts of Europe that have not really developed. We cannot leave people behind. We also need to find a way to communicate pension systems to citizens, especially youngsters,” she said.

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