The EU Council has published a working document proposing amendments to the Pan-European Personal Pension Product (PEPP) Regulation, introducing two distinct product types—a simple, low-cost Basic PEPP and a more flexible Tailored PEPP—both subject to a value-for-money framework. The proposals aim to boost the attractiveness and flexibility of the product, impacting EU citizens, pension providers, and national regulators.
The working document, dated 2 June 2026, originates from the Council's financial services formation. It is a legislative proposal that, if adopted, would amend the existing PEPP Regulation (EU) 2019/1238. The document outlines concrete amendments, including removing mandatory advice requirements for the Basic PEPP, clarifying rules for employer contributions and product transfers, and enhancing transparency through a central public register. These are binding legislative changes once approved by the European Parliament and Council.
Policy Orientations and Trade-offs
The proposals reflect a balance between increasing market uptake and ensuring consumer protection. By offering a Basic PEPP with lower costs and fewer obligations, the Council aims to attract savers who may be deterred by complexity or fees. However, removing the mandatory advice requirement for the Basic PEPP raises concerns about whether consumers will make informed decisions, potentially increasing the risk of mis-selling. The Tailored PEPP, by contrast, allows for more investment options and flexibility, catering to savers with higher risk tolerance or specific needs. The value-for-money framework seeks to ensure that both products offer fair returns relative to costs, but its implementation may impose administrative burdens on providers.
Impact on Stakeholders
- EU consumers (savers): The Basic PEPP could lower barriers to pension saving, offering a simple, low-cost option. However, the absence of mandatory advice may leave some consumers vulnerable to unsuitable choices. The Tailored PEPP provides more choice but may come with higher fees and complexity.
- Pension providers (insurance companies, asset managers): Providers gain the ability to offer two distinct product types, potentially expanding their customer base. However, compliance with the value-for-money framework and transparency requirements (e.g., central register) could increase operational costs. Smaller providers may struggle to compete with larger firms that can achieve economies of scale.
- National regulators: Regulators will need to oversee the new product types and enforce the value-for-money framework, requiring additional resources and coordination. The central public register enhances transparency but also demands data management capabilities.
- Employers: Clarified rules for employer contributions may encourage workplace pension schemes, but employers may face administrative adjustments to integrate PEPP offerings.
Expected Institutional Follow-up
The Council's working document will be discussed among member states in the coming weeks, with potential revisions before a formal proposal is adopted. The European Parliament will then consider the amendments under the ordinary legislative procedure, with the European Commission providing technical input. The timeline for final adoption is uncertain, but the Council aims to advance the file during its current presidency.