On Monday 19 March, the MEPs of the committee on economic and monetary affairs in the European Parliament discussed the report by Sophie in't Veld (ALDE, Netherlands) on the creation of a pan-European personal pension product (PEPP).
The main changes made by the rapporteur include the notion of 'base PEPP' - an idea already put forward in the working document she presented in January (see EUROPE 11935). She also tightened up the text by clarifying that the capital protection will allow savers to recoup the capital invested, including charges, costs and inflation. For this 'base PEPP', she is proposing that at least 35% of benefits take the form of an annuity.
The rapporteur also introduced the notion of partnerships between providers of PEPPs to offer compartments in different member states for the purposes of portability, to be laid down in a list included in the contract itself. This would remove the initial obligation - which was felt to be overly complex in practice - for providers to set 'national compartments' in place.
Overall, the shadow rapporteurs broadly welcomed the rapporteur's work, with the exception of Gerold Annemans (ENF, Belgium), who accused her of wanting to create a European pension system by stealth.
In the amendments it will table, the ECR group intends to bring back a degree of balance between consumer protection and viability of the commercial product. The aim is not to have a product that is impossible to provide, said Ashley Fox (ECR, UK). The EPP group also considers that the priority is to have a clear result that is usable in practice.
Tax treatment. On the controversial issue of the tax treatment for the PEPP, the rapporteur proposes a separate resolution, in which she calls upon the Council - which has sole competence in this area - to draft proposals on incentives to savers.
She suggests that the following approaches be at least looked into: - giving the PEPP the same tax break as those applicable to national personal pension products; - a specific tax break for the PEPP, harmonised at EU level, to be established in the framework of a multilateral tax agreement between member states; - awarding specific assistance or premiums to savers in the form of a fixed amount or percentage.
The decision is “out of our hands”, the rapporteur stressed. “Obviously, the member states will try to keep hold of their prerogatives in the field of taxation, but here, the Parliament should maybe try to bring extra pressure to bear on the Council”, said Renato Soru (S&D, Italy).
The political groups have until 24 April to table amendments to the report. (Original version in French by Marion Fontana)