Summer has come and gone but the debate surrounding the PEPP’s “capital protection” feature remains on the table.
With the ECON committee voting on the PEPP Regulation around the corner, BETTER FINANCE warns one last time that true capital protection implies that the notion of “capital” must be calculated on the basis of the amounts saved before the deduction of all accumulated fees, charges and expenses directly or indirectly borne by investors, and if possible in real terms (offsetting the negative impact of inflation over time).
If the legislators still decide to opt for a capital “protection” feature that only allows PEPP savers to recoup the nominal capital invested net of all accumulated fees and costs without offsetting inflation, they will decide for the guaranteed destruction of the purchasing power of their pension savings. Worse: they will be misleading savers to believe that, on the contrary, this constitutes “protection”.
Read the full press release here.