Brussels has approved plans for the Pan-European Personal Pension Product (PEPP). Eugen Teodorovici, Minister for Finance of Romania told Funds Europe that “Under the new rules, PEPPs will have the same standard features wherever they are sold”. PEPP savers will not only be able to choose from a broad range of providers but will also have a possibility to switch them both domestically and across borders.
BETTER FINANCE strongly welcomes this agreement but has criticised its capital protection/guarantee provision as inadequate. On 14 February, BETTER FINANCE launched a petition asking EU co-legislators to provide real capital protection for future Pan-European Personal Pension Products (PEPPs). As mentioned in an article by Agence Europe, “capital” as currently defined in the basic PEPP is limited to the “aggregate capital contributions, calculated on the basis of the amounts investible after deduction of all fees, charges and expenses that are directly or indirectly borne by investors”. Such calculations are criticised by BETTER FINANCE, stating that the calculations must, on the contrary, be based on the amounts saved before deducting the costs. Having failed to convince EU policymakers, BETTER FINANCE is now calling on European citizens themselves to sign the petition and demand real capital protection.