The review of the Pan-European Personal Pension (PEPP) Regulation could boost funded pensions but must not be allowed to undermine the functioning of existing and well-functioning pension systems, PensionsEurope has warned.
The PEPP review is part of the European Commission’s supplementary pensions package, which was published in November 2025 and is now with the European Parliament and Council.
The PEPP framework has so far only resulted in two PEPP providers coming to market. In its position paper, PensionsEurope said tackling the barriers that prevented its uptake could play a role in addressing shortcomings in the PEPP framework, but that “demand-side issues also need to be considered to properly understand the low uptake of the PEPP”.
The association’s main concern has to do with Articles 33, 39a, 47 and 57, which it describes as legal provisions aimed at ensuring that member states do not prevent employer contributions to a PEPP, and may allow PEPPs for auto-enrolment schemes, except for national social and labour law provisions that may be in place.
According to PensionsEurope, the PEPP regulatory framework already allows employer contributions to PEPP, and explicitly pushing the use of PEPP in a workplace context could create legal uncertainty in member states with well-developed pension systems.
These could be second pillar systems or “first pillar bis”, as is the case in some central and eastern European countries.
“Member states should have the option to prevent the PEPP from functioning as a second pillar (or workplace) product,” said PensionsEurope, reiterating a point of view it has in common with other second pillar pension industry groups.
It also said it disagreed with the proposal to remove a requirement to offer national sub-accounts for at least two member states, as this would alter the concept of the PEPP from a European product to a more national one.
In addition, the tax treatment of the PEPP should remain a matter for individual countries.
“The PEPP is particularly useful for those who don’t have access to workplace pensions, as self-employed and workers in new forms of employment, or where personal pensions at the national level and private managed social security schemes offered are not reliable or attractive,” said Matti Leppälä, secretary general of PensionsEurope.
“The review of the PEPP should avoid undermining existing well-functioning pension systems and legislating on its tax treatment. Tax incentives given at the national level are key to ensuring the development of personal pension products,” he added.
