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DRAFT OPINION (COM(2025)0840 – C10 0307/2025 – 2025/0363(COD))

On the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2019/1238 on a pan-European Personal Pension Product (PEPP)

EMPL-PA-787853

Committee on Employment and Social Affairs · Rapporteur: Liesbet Sommen

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The Committee on Employment and Social Affairs gives its draft opinion on the Commission proposal to amend Regulation (EU) 2019/1238 on the pan-European Personal Pension Product (PEPP). It proposes amendments to keep PEPPs complementary to public and occupational pensions, respect member states' competences, and improve cost transparency and consumer protection. It proposes an annual EU Pension Forum, a benchmark-based approach to costs, a 1% annual cost cap for the Basic PEPP, and protection mechanisms for the Basic PEPP. It also proposes rules for workers with discontinuous careers and coverage of PEPP by pension tracking systems. It deletes the tax treatment provision and the workplace auto-enrolment provisions, and extends the application date to two years after entry into force.

Committee position. The rapporteur proposes amendments to the Commission proposal to keep PEPPs complementary to public and occupational pensions, respect member states' competences, strengthen cost transparency and consumer protection, cap Basic PEPP costs at 1% per year, add protection mechanisms and rules for discontinuous careers, and create an annual EU Pension Forum.

Key points

  1. States that supplementary pensions must complement, not undermine, public and occupational pension systems, which remain the cornerstone of social protection in the member states.
  2. Says the development of PEPPs must respect member states' competences in the organisation of pension systems, including taxation and labour law, and that social partners must be actively involved.
  3. Aims to ensure PEPPs deliver adequate, safe and transparent retirement outcomes, with clearer rules on cost transparency, comparability and value for money, and reaffirms the prudent person principle.
  4. Calls for tackling the gender pension gap and improving financial awareness, including for interim workers, self-employed persons, platform workers and people with fragmented careers.
  5. Proposes an annual European Union Pension Forum bringing together member states, EU institutions, social partners and stakeholders to exchange best practices on financial and social aspects of pensions.
  6. Requires the Basic PEPP to include at least one protection mechanism: capital protection at the end of the accumulation phase, a minimum real return guarantee, or a return linked to a prudent benchmark.
  7. Sets the total annual costs and charges of a Basic PEPP at no more than 1% of accumulated capital per year, and empowers the Commission to set a lower maximum after consulting EIOPA.
  8. Requires PEPP providers to give temporary agency workers, students, platform workers and others with discontinuous careers an automatic low-cost structure, no entry, exit or transfer fees, preservation of accrued rights and a defensive default allocation.
  9. Provides that where national personal pension products carry mandatory minimum protection or return guarantees, PEPPs distributed there must not provide a lower level of protection.
  10. Requires pension tracking systems, where in place, to cover PEPP accrued entitlements and allow comparability of all pension entitlements, distinguishing guaranteed from non-guaranteed components and showing administrative costs.
  11. Deletes the provision granting PEPPs tax treatment no less favourable than other personal pension products, and deletes the workplace auto-enrolment provisions.
  12. Extends the application of the Regulation to two years after entry into force and requires the Commission's evaluation to give equal consideration to the social dimension of pension provision.

Who is affected

  • PEPP providers and distributors: must meet product oversight, cost transparency and value-for-money requirements.
  • PEPP savers: gain clearer cost information, comparability and protection mechanisms for the Basic PEPP.
  • Workers with discontinuous careers, including temporary agency workers, students and platform workers: get low-cost PEPP structures and preservation of accrued rights.
  • Member states: retain competence over pension system organisation, taxation and labour law.
  • Social partners: to be involved in pension system organisation and in the annual EU Pension Forum.

Figures and deadlines

  • 1% of accumulated capital per year: maximum total annual costs and charges of a Basic PEPP.
  • two years after entry into force: date from which the Regulation applies.
  • five years after the application date, and every five years thereafter: timing of the Commission's evaluation.

Legal basis: Article 5 of the Treaty on European Union (TEU), cited on subsidiarity.