European Commission reforms PEPP: a chance for modern pension savings in Europe
With a new pension package, the European Commission aims to strengthen private retirement provision across the EU. The core element of the “Supplementary Pension Package,” presented on 20 November, is the reform of the Pan-European Personal Pension Product (PEPP), which has so far seen very little uptake.
“The new PEPP is an opportunity to set the course for a future-proof pension system in the EU. It enables simple, easy-to-integrate products that provide people across Europe with reliable supplementary retirement savings,” says Jörg Asmussen, CEO of the German Insurance Association (GDV). The association welcomes the Commission’s initiative to boost funded supplementary pensions.
Reform eases requirements for insurers
Since its launch in 2022, only two providers across Europe have offered a PEPP. The main reasons are heavy administrative burdens—such as the requirement to offer the product in at least two EU Member States—and a rigid cost cap. These rules are now set to be removed. From the GDV’s perspective, this is an important step towards bringing PEPP out of its niche and making it easier for new providers to enter the market.
A key part of the reform concerns the so-called Basic PEPP, a previously mandatory standard option. This obligation will be abolished. Providers, including insurers, will instead be free to design their own variants. This creates significantly more flexibility in developing modern pension products and opens the door to market-ready offerings that can be better integrated into national pension systems.
The European Commission’s pension package
The European Commission’s “Supplementary Pension Package” consists of five measures in total. In addition to revising the PEPP Regulation, it includes recommendations for setting up an EU-wide pension tracking system. This system will give citizens a simpler, digital overview of their individual pension entitlements in the future. In Germany, the digital pension overview has already laid an important foundation for such tracking. Insurers also aim to join the European Tracking Service, which links national pension tracking systems.
The Commission further recommends enrolling citizens automatically in supplementary pension schemes to increase participation in funded retirement savings. The planned revision of the IORP II Directive is intended to strengthen occupational pensions. National pension dashboards are also to be introduced to consolidate country-specific pension information and support the exchange of best practices among EU Member States. This will give citizens greater transparency and a better basis for planning their retirement.