Plans to introduce a new European personal pension have come under fire from a financial trade body speaking for leading insurance firms.
Insurance Europe has published a positioning document supporting the aim of providing a pension that offers the same costs and benefits to consumers in all European Union countries.
But the statement rubbishes the PEPP – Pan-European Personal Pension – offered in the current form by the European Insurance and Occupational Pensions Authority’s (EIOPA).
The Insurance Europe web site claims the PEPP is poorly designed and will not suit the needs of consumers.
The trade body is also fears a cap on charges will discourage many pension providers from offering a PEPP and that the charging structure means companies in different countries will not have to face the same financial risks.
Concerns over PEPP design and features
“Although we support the principles of PEPP, there are some concerns about product design and features,” said an Insurance Europe spokesman.
“The PEPP also need to address national tax rules, social and labour laws and contract law which may differ between member states.”
Insurance Europe has indicated a willingness to consult with EIOPA over changes to the PEPP.
The PEPP aims to offer a retirement saving opportunity to consumers across Europe. Because the scheme rules and benefits are the same for each EU member state, the pension is also portable for expats.
British members of Insurance Europe include the Association of British Insurers, Lloyds of London and the International Underwriting Association of London.
QROPS pensions for expats
The pension is the first of several Pan-European financial products lined up for consumers.
These include life protection, mortgages and savings products.
British expats and overseas workers who have pension rights from working in the UK can already transfer their pensions into an offshore Qualifying Recognised Overseas Pension Scheme (QROPS).
QROPS are portable across Europe, and many EU member states offer the pensions, including Malta, France, Germany, The Netherlands and Spain.
According to HMRC, 21 EU states provide 296 QROPS out of 41 countries and 1,134 pensions offered worldwide.
The EU also runs a QROPS for civil servants working for the organisation.
The PEPP is unlikely to offer the same flexible tax and investment options available from a QROPS.
Further QROPS Information and Guidance
For more information about QROPS and the benefits it provides, download the iExpats QROPS Guide or complete the Get Advice form.
