Pan-European Personal Pension Product (PEPP)

Regulation (EU) 2019/1238 on a pan-European Personal Pension Product (PEPP)


Known as the ‘PEPP Regulation’, it establishes the legal foundation of the pan-European personal pension product* (PEPP), by ensuring standardisation of the core product features, such as:
transparency requirements,
investment rules,
switching right and
type of investment options.

It also lays down uniform rules on registering, manufacturing, distributing and supervising personal pension products that are distributed in the European Union (EU) under the PEPP designation.

The PEPP is a voluntary personal pension scheme that will complement existing public and occupational pension systems, as well as national private pension schemes.
The regulation aims to give savers more choice and provide them with more competitive personal pension products when saving for retirement, while enjoying strong consumer protection.


The regulation lays down uniform rules on the core PEPP features, in particular on the following key points:

PEPP providers

PEPPs can be offered by a wide range of financial institutions, including insurance undertakings, asset managers, banks, certain investment firms and certain occupational pension funds.
PEPP contract

The regulation sets out the minimum requirements for the content of the contract agreed between PEPP providers and PEPP savers*.

Registration of PEPPs

Providers that want to offer a PEPP need to follow a registration process. The European Insurance and Occupational Pensions Authority (EIOPA) registers new PEPPs in a central register, on the basis of a decision taken by national competent authorities. Once registered, the product can be provided and distributed throughout the EU.
The regulation describes in detail the PEPP registration procedures, the circumstances for deregistering a PEPP, as well as the powers of the competent authorities of the home and host EU countries.

EU passport

PEPP providers and distributors benefit from an EU passport which allows them to sell PEPPs in different EU countries. The passport allows them to access the entire EU market with a single product registration granted on the basis of a single set of rules.


When proposing a PEPP, providers or distributors must provide prospective PEPP savers with information on the portability service* and on which sub-accounts* are immediately available.
Where PEPP savers change their residence to another EU country, they can continue to contribute to the same PEPP either by opening a PEPP sub-account with the same PEPP provider in their new country of residence (where such an option is available with their PEPP provider) or continuing to contribute to their existing PEPP sub-account. In the event that their PEPP provider does not provide for such an option in their new country of residence, PEPP savers have the right to switch PEPP provider immediately and free of charge. PEPP providers must open at least 2 sub-accounts after a transition period of 3 years.


PEPP savers can switch PEPP provider after a minimum of 5 years from the conclusion of the PEPP contract and in case of subsequent switching, after 5 years from the most recent switching. The PEPP provider may allow PEPP savers to switch PEPP providers more frequently. The fees and charges for the switching service must be limited to the actual administrative costs incurred by the transferring PEPP provider and capped at 0.5% of the value of the transferred assets.

Investment options

PEPP providers can provide up to 6 investment options, including the default investment option — called the ‘Basic PEPP’*. All investment options must be designed by PEPP providers on the basis of a guarantee or risk-mitigation technique which ensures sufficient protection for PEPP savers.

For the Basic PEPP, PEPP providers must protect PEPP savers’ capital either by a guarantee or by risk mitigation techniques consistent with the objective to allow the PEPP savers to recoup the capital. Costs and fees for the Basic PEPP must not exceed 1% of the accumulated capital per year.

PEPP savers have the right to change investment option regularly in order to adapt their investment strategy. This right is free of charge and can be exercised after a minimum of 5 years from the conclusion of the PEPP contract and, in the case of subsequent changes, after 5 years from the most recent change of investment option. PEPP providers may allow PEPP savers to change their investment option more frequently.

Type of out-payments

PEPP providers can offer PEPP savers one or several type of out-payments (annuities, lump sum, regular drawdown payments or a combination of these).
PEPP savers can choose the form of out-payments for the decumulation phase* at the conclusion of a contract and when opening a new sub-account. The form of out-payments may differ from sub-account to sub-account. If PEPP providers provide different forms of out-payments, PEPP savers can modify the form of out-payments of each sub-account 1 year before the start of the decumulation phase, at the start of the decumulation phase and at the moment of switching.

Distribution of PEPPs

The regulation sets out the conditions under which PEPP providers and PEPP distributors* may distribute PEPPs.
The distribution regime of the PEPP follows a sector-by-sector approach. Insurance companies and insurance intermediaries that distribute a PEPP are subject to the Insurance Distribution Directive (Directive (EU) 2016/97 — IDD), while investment firms and other PEPP providers and distributors will have to apply the rules in the Markets in Financial Instruments Directive (Directive 2014/65/EU — MiFID II).


PEPP providers and PEPP distributors are required to provide prospective PEPP savers with comprehensive advice before the PEPP contract is signed, in order to enable them to make a fully informed decision and choose the product that best suits their needs.

The PEPP Regulation provides for:
an obligation for all PEPP providers and distributors to do before the signature of the contract a retirement-related demands and needs test which must also cover a specific check for a possible need of PEPP savers to acquire a PEPP offering annuities (to ensure their adequate protection for longevity risks);
full mandatory advice: no waiver possible for savers and suitability test for all PEPP savers. The advice must also cover the choice of investment option and personalised pension benefit projections.
In addition, for the Basic PEPP, PEPP providers must provide PEPP savers with mandatory personalised retirement planning advice at the start of the decumulation phase, with a personal recommendation on the optimal form of out-payments.


To ensure a high level of transparency, the regulation provides that PEPP savers must receive:
before the conclusion of the contract, key information about the product through a standardised document (i.e. the PEPP key information document (PEPP KID));
every year, a PEPP benefit statement with key information about the evolution of their savings.
In particular, costs and fees must be fully transparent.

The European Commission must further specify by regulatory technical standards the details of the presentation of the information to be provided in the PEPP KID and the PEPP Benefit Statement.

Sustainability factors

PEPP providers are encouraged to take into account environmental, social and governance factors (ESG factors)*.
PEPP providers should provide PEPP savers with information, where available, related to the performance of the PEPP provider’s investments in terms of ESG factors.

They should also provide PEPP savers in the PEPP Benefit Statement with information on how the investment policy takes into account ESG factors. Within the prudent person rule, PEPP providers shall take into account risks related to and the potential long-term impact of investment decisions on ESG factors.


Compliance with the PEPP Regulation must be supervised by the national competent authorities of the PEPP providers and distributors. However, EIOPA will have product intervention powers which will allow it to take effective, EU-wide measures in case of a significant PEPP saver protection concern or of a threat to the orderly functioning and integrity of financial markets or to the stability of the whole or part of the EU’s financial system, which are not adequately addressed by national competent authorities.


It applies 12 months after publication in the Official Journal of the European Union of Commission delegated acts concerning regulatory technical standards specifying:

the details of the PEPP presentation, the methodology of how risk and reward are presented, the methodology for the calculation of costs, information presented in electronic form (Article 28(5));
the conditions for the review and revision of the PEPP KID (Article 30(2));
the conditions for fulfilling the requirement to provide the PEPP KID (Article 33(3));
the key information for PEPP saver to be included in the PEPP Benefit Statement (Article 36(1));
the details of the presentation of the supplementary information in the PEPP Benefit Statement (Article 37(2));
the types of costs and fees for the Basic PEPP (Article 45(3)); and
the minimum criteria for risk-mitigation techniques (Article 46(3)).


Personal pension product: a product which:
is based on a contract between an individual saver and an entity on a voluntary basis and is complementary to any statutory or occupational pension product;
provides for long-term capital accumulation with the explicit objective of providing income on retirement and with limited possibilities for early withdrawal before that time;
is neither a statutory nor an occupational pension product.

PEPP provider: a financial undertaking authorised to manufacture a PEPP and to distribute that PEPP.

PEPP saver: an individual who has concluded a PEPP contract with a PEPP provider.

Portability service: a service which gives PEPP savers the right to continue contributing into their existing PEPP account, when changing their residence to another EU country.

Sub-account: a national section which is opened within each PEPP account and which corresponds to the legal requirements and conditions for using possible incentives fixed at national level for investing in a PEPP by the EU country of the PEPP saver’s residence; accordingly, an individual may be a PEPP saver or a PEPP beneficiary in each sub-account, depending on the respective legal requirements for the accumulation phase* (please see key term below) and decumulation phase.

Accumulation phase: the period during which assets are accumulated in a PEPP account and ordinarily runs until the decumulation phase starts.

Basic PEPP: all PEPP providers will need to offer an affordable default investment option (the ‘Basic PEPP’) with costs and fees capped at 1% of the accumulated capital per year.

Decumulation phase: the period during which assets accumulated in a PEPP account may be drawn upon to fund retirement or other income requirements.

PEPP distributor: a financial undertaking authorised to distribute PEPPs not manufactured by it, an investment firm providing investment advice, or an insurance intermediary.

Environmental, social and governance factors (ESG factors) a set of criteria that socially conscious investors use to screen potential investments to ensure they support the principles of sustainable development. Environmental criteria relate to how a business performs as a steward of nature. Social criteria look at how it manages relationships with employees, suppliers, customers, and the communities in which it operates. Governance criteria concern issues such as its corporate leadership and its approach to executive pay, audits, internal controls and shareholder rights.


Commission Recommendation of 29.6.2017 on the tax treatment of personal pension products, including the pan-European Personal Pension Product (C(2017) 4393 final, 29.6.2017)

Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (recast) (OJ L 26, 2.2.2016, pp. 19-59)

Successive amendments to Directive (EU) 2016/97 have been incorporated into the original text. This consolidated version is of documentary value only.

Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, pp. 349-496)

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee — Action Plan on Building a Capital Markets Union (COM(2015) 468 final, 30.9.2015)

Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, pp. 48-83)

Safeguarding supplementary pension rights

Directive 98/49/ECThis Directive is intended to remove obstacles to the free movement of employed and self-employed persons, while safeguarding their supplementary pension rights when moving from one Member State to another. This protection concerns both voluntary and compulsory pension schemes , with the exception of social security schemes covered by Regulation (EC) No 883/2004.

This Directive applies to members of supplementary pension schemes and others holding entitlement under such schemes who have acquired or are in the process of acquiring rights in one or more Member States.

This Directive provides for four main measures to safeguard the supplementary pension rights of workers moving within the Community:

Equality of treatment as regards preservation of pension rights

Member States must, for persons who have left a supplementary pension scheme as a consequence of going to work in another Member State, take the necessary measures to ensure the preservation of vested pension rights to the same extent as for persons in respect of whom contributions are no longer being made but who remain within the same Member State.

Directive 2014/50/EU, which must be incorporated in EU countries’ national laws by 21.5.2018, ensures that anyone with supplementary pension rights does not lose out when they go to live or work in another EU country. It requires that:

supplementary pension rights be guaranteed after 3 years of employment at the latest. If a minimum age is required, it must not be higher than 21 years;
the rights of workers who leave an occupational pension scheme before retirement be preserved and treated like those who remain in the scheme on matters such as indexation.
Cross-border payments

Member States shall ensure that supplementary pension schemes make payment in other Member States, net of any taxes and transaction charges, of all benefits due under these supplementary schemes.

Posted workers and supplementary pensions

Posted workers have the option of remaining within the pension scheme in their country of origin during the period of posting in another Member State. Posted workers and, where applicable, their employers are thus exempted from any obligation to make contributions to a supplementary pension scheme in another Member State.

Information to scheme members

Employers, trustees or others responsible for the management of supplementary pension schemes shall provide adequate information to scheme members, when they move to another Member State, as to their pension rights and the choices which are available to them under the scheme.

Under Directive 2014/50/EU, workers in a supplementary pension scheme can ask how stopping employment or moving would affect their supplementary pension rights and the conditions that would apply to the future treatment of those rights.

People who have left the scheme must be informed about the value and treatment of their rights.


Directive 98/49/EC

Green Paper of 7 July 2010 towards adequate, sustainable and safe European pension systems [COM(2010) 365 final – Not published in the Official Journal].

Directive 2014/50/EU of the European Parliament and of the Council on minimum requirements for enhancing worker mobility between Member States by improving the acquisition and preservation of supplementary pension rights (Official Journal L 128 of 30.4.2014).

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