When it was presented in June of this year (see EUROPE 11819), the Commission's proposal to create a controlled quality label for pan-European personal pension products (PEPP) prompted a certain enthusiasm among the stakeholders. At a public hearing at the committee on economic and monetary affairs of the Parliament on Tuesday 21 November, the market players particularly highlighted its complexity and technical aspects.
The representatives of the various stakeholders first of all stressed that the implementation of the 'national compartments' to allow PEPPs to be transferred between member states with no need to change supplier will prove difficult in practice. Bernard Agulhon, head of regulatory affairs for Amundi, said that creating 27 compartments would be virtually impossible for small providers. Amundi, a very large player, already operates a similar system, but it is made up of just eight compartments, he explained.
Rallying to the position of the French financial management association (see EUROPE 11888), the European Consumer Organisation (BEUC) said that the default guarantee option as currently proposed was problematic. PEPPs allow savers to choose between five different investment options, including a default investment option that will guarantee that they get back at least the amount they invested. According to Anne Fily of BEUC, the wording of the text is unclear on this point and may be read differently as it refers to the protection of capital, without clarifying when the saver may recover the capital invested.
Another anticipated stumbling block is the tax treatment of PEPPs. Readers may recall that the proposal comes with a recommendation addressed to the member states in which the Commission encourages them to ensure the same tax treatment for this product as for similar national products already in place. Hans Van Meerten, a lecturer in law and economics at the University of Utrecht, considers that the proposed compartment-based approach would already reduce the effects of the different tax regimes.
Excluding occupational pension institutions, the default guarantee option, the tax treatment and national competencies will mean that compromises need to be found, despite the tight timetable, Parliament's rapporteur on the dossier, Sophie In't Veld (ALDE, Netherlands), summed up. (Original version in French by Marion Fontana)