The new European Union PEPP pension for expats is ready to go, according to the latest reports.
Draft regulations are to go before the European Parliament to allow the roll-out of the new-style pension across Europe.
PEPPs – Pan European Pension Products– are designed to give retirement savers more choice while boosting the market for personal pensions, which is generally poor across the continent.
The EU says only one in four workers aged between 25 and 59 years old regularly save into a pension.
“The PEPP will bolster our capital markets union plan, as it will help channel savings towards long-term investments”, said Vladislav Goranov, minister for finance of Bulgaria, which currently holds the European Council presidency.
“It will promote competition amongst pension providers, enabling them to sell pension products outside their national markets and giving savers more choice over how and where to place their savings.”
The regulations will ensure PEPPs have the same standard features in whichever country they are sold.
Expats moving between EU countries will be able to take their portable PEPP with them.
The PEPP will also have a feature built in that allows a saver to switch providers, while offering them a choice of providers across different countries, regardless of which state they live in.
“Savers would have the right to switch providers, both domestically and across borders, after a minimum of five years from the conclusion of the contract or from the most recent switch. They could do so more frequently if the PEPP provider so allows. The fee for doing so would be capped,” say documents filed with the draft regulations.
“Savers would be able to continue contributing to their PEPP if they move to another member state.”
The regulations must be agreed by the European Parliament before PEPPs become available.
PEPPs will also be structured so providers can invest their funds easier than current rules allow, especially in EU projects.
“In Europe the personal pension market is currently fragmented, due to a patchwork of rules that impede the development of a market at EU level. In some member states, the market is virtually non-existent, and we hope PEPPs will change this,” says the EU.