Almost a month after the European Commission unveiled details of its plans for a new “pan-European Personal Pension” (PEPP) product, FECIF, the European Federation of Financial Advisers and Intermediaries, has issued its official assessment of the plans, saying that it is “a step in the right direction” and would address needs that exist in EU-member countries “where no second pillar exists as well as other jurisdictions given the potentially wide range of available solutions”.
“With better investment choices and features – and the full benefit of local tax advantages – we believe consumers will be able to make superior choices,” FECIF chairman David Charlet added, in a statement.
However, he stressed that it was “essential that the PEPP makes professional and regulated advice a cornerstone of the distribution model, and does not deprive consumers of access to it, when they are making crucial decisions regarding their pension savings”.
A statement outlining FECIF’s position with respect to the recently-proposed PEPP product range also calls attention to a lack of detail in the current PEPP draft regulation. Among other things, FECIF says, “the comparison of products must safeguard and respect local criteria, [while not blocking] competition”.
It also notes that the question of capital guarantees, as spelled out in the PEPP draft regulations, “need clarifying”.
“FECIF is committed to the development of pensions, not least seen in the fact that we set up a working group about a year ago to monitor and contribute to this PEPP initiative,” Charlet added.
“In parallel, our national member associations are involved locally in working groups with state authorities.
“Expectations across different European markets vary, but we are working to ensure new offerings are supported where they meet client needs.
“It is important that the EC also encompasses experiences from past pension reforms, in order not to repeat the same mistakes.”
FECIF added in its statement that it is prepared to continue contributing to the PEPP initiative “wherever possible and relevant, helping adapt it to local market needs and expectations” and that it would “as ever, work together with regulators, industry representatives, consumer groups and all other stakeholders, to improve the choices available for savers and investors”.
As reported, the European Commission last month unveiled a draft proposal for what it called a “new class of pan-European personal pension products” designed, it said, to help consumers across the EU to better save for their retirement.
This new class of pension product, which the commission dubbed the PEPP, was designed, the EC said, to work by giving European pension providers “the tools to offer a simple and innovative pan-European personal pensions label”.
In its 79-page Proposal for a Regulation of the European Parliament and of the Council on a pan-European Personal Pension Product (PEPP), the European Commission says it is currently expected that the PEPP regulations shall enter into force at the beginning of 2019.
It adds that, “based on general interest expressed during stakeholder meetings, it is estimated that [around] 325 providers will apply for PEPP-registrations in the following five years, based upon the experience of other new regimes like [the] IORP [Institutions for Occupational Retirement Provision directive]…and [the] LTIF [long term investment fund regulations]…
“Once registered, these PEPPs are to be supervised by national competent authorities, which supervision is coordinated by EIOPA [the European Insurance and Occupational Pensions Authority].”
Individuals and organisations wishing to comment on the European Commission’s draft plans for the PEPP regulations have until 24 September to do so.
FECIF, formally known in French as the Fédération Européenne des Conseils et Intermédiaires Financiers, calls itself the only pan-European trade association for independent financial advisers and financial intermediaries and their national associations. It was founded in 1999, is based in Brussels, and represents more than 600,000 advisory industry practitioners in total, including administrative and back-office staff.
To view and download a four-page Pan-European Personal Pension factsheet on the European Commission’s website, click here.