PEPP – A Passport To European Pension Freedom?

by Stephen Gillick , partner in the Employment Law and Benefits team at Mason, Hayes & Curran


Travelling in Europe is becoming increasingly difficult with the imposition of additional security checks. However, as far as your pension is concerned it may be about to become a whole lot easier.

On 29 June, the European Commission (the “Commission”) launched a proposal that will offer consumers a new Pan-European Pension Product (“PEPP”) that will, if implemented, increase private pension savings and enhance the portability of pensions throughout the EU.

Background to the proposal

According to the Commission, Europe is facing an unprecedented demographic challenge that will increase pressure on public finances throughout the EU. Over the next 50 years, the share of the population in retirement-age versus those in working-age is forecast to double. This essentially means that for every two people working, there will be one pensioner.

Currently, only 27% of Europeans between the ages of 25 and 59 participate in a pension. PEPPs would play a role in increasing the level of participation and also have the potential to boost investment in our economy through increased pension investments.

It is the Commission’s view that the proposal will equip pension providers with the tools to offer simple and innovative PEPPs to a market that craves diversity. PEPPs are designed to give savers more choice when they are putting money aside for retirement and provide them with a selection of competitive products.

Key features

The Commission has outlined that PEPPs will have the same standard features wherever they are sold in the EU.  They can be offered by a broad range of providers, such as insurance companies, banks, occupational pension funds, investment firms and asset managers. The new PEPP is designed to complement existing state-based, occupational and national personal pensions, but not to replace or harmonise national personal pension regimes.

The Commission has highlighted the following key benefits of the new PEPP:

  • PEPP savers will have more choice from a wide range of PEPP providers and benefit from greater competition;
  • Consumers will benefit from strong information requirements and distribution rules;
  • PEPPs will grant savers a high level of consumer protection under a simple default investment option;
  • Savers will have the right to switch providers – both domestically and cross-border – at a capped cost every five years; and
  • 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.

The European Insurance and Occupational Pensions Authority (“EIOPA”) will be in charge of authorising PEPPs. It will also be responsible for maintaining a central register for PEPPs across the EU. National supervisory authorities, however, will remain in charge of supervising PEPP providers.

Likely impact?

Jerry Moriarty, chief executive of the Irish Association of Pension Funds has expressed reservations on the impact that the new PEPP proposals will have in Ireland. Given the fact that Ireland already has personal pensions, Mr Moriarty does not envisage the new PEPP proposals will have a great impact in Ireland. In critiquing the relevance of the proposals, Mr. Moriarty was of the opinion that they were more designed for countries where pension coverage is lower and where there is more reliance on state provision.

The Commission has indicated that UK PEPP providers that have established themselves or a subsidiary in the Eurozone prior to Brexit, and consequently gained authorisation as PEPP providers, will be able to offer the product after the UK’s exit from the EU.


The PEPP proposal will now be discussed by the European Parliament and the Council. Once adopted, the Regulation will enter into force 20 days after its publication in the Official Journal of the European Union.


Although the newly proposed PEPP is anticipated to boost the growth of an EU industry that is currently worth about €700 billion, its impact in Ireland remains to be seen.

In Ireland, we already have a wide range of personal pension options such as PRSAs. The addition of another product with a catchy four letter acronym may actually add to the confusion amongst potential savers as regards the best pension option. This confusion can in turn lead to apathy which will reduce the overall benefit of the PEPP. Where the PEPP may actually be successful is in its portability. Ireland has a young and highly mobile workforce that would enjoy the benefit of these jurisdictional freedoms.


About the author
Stephen is a partner in Mason Hayes & Curran’s Employment Law and Benefits team, specialising in Pensions Law.
He has extensive experience in advising trustees, sponsoring employers and pension providers on a range of issues, including pension scheme establishment; pension scheme funding and exercises to reduce scheme liabilities.
Stephen is experienced in drafting and updating pension scheme documentation and advising on pension scheme mergers and reorganisations. He regularly advises on the pension aspects of corporate acquisitions and disposals.
Stephen is a member of the Benefits Committee of the Irish Association of Pensions Funds and a sits on the Law Society’s Pensions Committee. He is also a council member on the Association of Pensions Lawyers in Ireland.