For immediate release

Ahead of the European Commission’s proposal in June, EFAMA reiterates its support for a Pan-European Personal Pension product

Brussels, 18th May 2017: In a short briefing document published today, the European Fund and Asset Management Association (EFAMA) outlined its vision for how the young generation of European citizens will benefit from the PEPP – and reaffirmed its support for the project.
The European Commission is expected to launch a legislative proposal on a framework for a Pan-European Personal Pension product (PEPP) at the end of June.  EFAMA has been supportive of this project since its inception.
EFAMA’s briefing shows that households held €7.6 Trillion in bank accounts at end 2016. This figure represents 41% of households’ financial wealth.  This is clearly a huge amount of savings held in short-term, liquid assets, with very limited return potential. At a time when the average replacement rate from public pensions in EU28 is expected to fall to 36% by 2060, EU citizens should be encouraged to start saving more and earlier, and to re-allocate part of their savings towards more market-based instruments.
The current fragmentation of national markets in the personal pension sphere means there is less choice and competition than it should.  A well-regulated, EU-labelled PEPP would ultimately give people access to low-cost personal pensions and give them the chance to get better returns for their savings.
EFAMA views the PEPP as the solution to make personal pensions more attractive and contribute to the success of Europe’s Capital Markets Union.
For a PEPP to succeed in achieving exactly this, EFAMA makes three recommendations: 
• The PEPP should be a highly standardised product that can be sold across Member States with an EU product passport. This will generate economies of scale and reduce costs.  In particular, investment rules and disclosure requirements should be standardised at EU level.
• The PEPP framework should give Member States the freedom to introduce country specific rules in a limited number of areas which are central to the organisation of their pension systems, such as the beneficial tax treatment granted to pension products, the determination of the retirement age and the features of eligible pay-out options.
• Finally, the framework should give an adequate degree of flexibility for potential PEPP providers.  In this respect, it should be up to the providers to decide whether they want to offer life-cycle investment strategies or strategies with minimum return guarantees as a default option.
These considerations as well as the main benefits of the PEPP are summarised in EFAMA’s briefing document.
Peter De Proft, Director General, EFAMA said: “The PEPP can be the solution to the problems which hinder the proper functioning market for personal pensions in Europe, in particular the high level of cost, the limited product choice and the lack of portability between Member States.  The political importance of the project is immense.  The PEPP can be one of the most tangible initiatives that the Juncker Commission can take to reconcile the young generation of European savers with the European project.”  
You can download the EFAMA briefing on the PEPP through this link.
- Ends -
For media enquiries, please contact:
Peter De Proft, Director General
Bernard Delbecque, Senior Director - Economics and Research
Telephone: +32 (0) 2 513 39 69
Notes to editors:
About the European Fund and Asset Management Association (EFAMA)
EFAMA is the representative association for the European investment management industry. EFAMA represents through its 28 member associations and 62 corporate members close to EUR 23 trillion in assets under management of which EUR 14.1 trillion managed by 58,400 investment funds at end 2016. Just over 30,600 of these funds were UCITS (Undertakings for Collective Investments in Transferable Securities) funds, with the remaining 27,800 funds composed of AIFs (Alternative Investment Funds). For more information about EFAMA, please visit