On Tuesday 4 September, there was universal disappointment among organisations representing the rights of consumers of financial products, following the vote at the committee on economic and monetary affairs of the European Parliament (see EUROPE 12087) concerning the creation of a pan-European personal pension product (PEPP).
The organisation Finance Watch set the ball rolling by flagging up the extremely limited improvements, but mainly the shortcomings of the compromise text, particularly the insufficiency of the prudential rules for providers of PEPPs.
“We believe that authorisation to provide the PEPP should not be given where companies are not subject to a proper EU-wide prudential framework”, its secretary general, Benoît Lallemand, explains in a press release.
The organisation Better Finance considers that the protection of capital for the basic PEPP is a major failing of the compromise text.
“We are shocked to see MEPs proposing to protect pension savers by guaranteeing them to recover in all likelihood less than 30% of the purchasing power of their pension savings after 40 years. Worse: all this without informing or warning them!” said the organisation's Managing Director, Guillaume Prache, reiterating his organisation's repeated warnings on the subject (see EUROPE 12064).
He went on to stress that “we may soon witness the worst mis-selling scandal ever seen”. If the proposal were to remain as it currently stands, the organisation will certainly discourage European savers from using the option. (Original version in French by Marion Fontana)