NEWS

Creating a pan-European personal savings model for the pension will help users maintain their benefits even if they move to another country in the Union.

The European Parliament on April 4 supported the development of an alternative to personal pension plans limited to the national level. The objective is to establish a pan-European model that offers the same conditions throughout the EU for users who wish to save for their pension and be able to “take” this product if they are going to live in another member state.

According to the Dutch Liberal Democrat MEP, Sophie in ´t Veld, responsible for this Eurochamber negotiation, the attractive director of the new model will be European supervision.

"We have obtained what we promised: a truly pan-European product that will be easy, safe and good for consumers," he says. "Contribute to social Europe that cares about citizens," he adds.

What are personal pension planes?

These products offer users the possibility of saving a personal title for their retirement. These are voluntary and complementary airplanes to any public pension system that is entitled to receive a person and the contributions made by their employer.

What would you change with the pan-European model?

Having a standardized cross-border model favors, for example, cost transparency. There are now personal pension plans, sometimes very different from one country to another in the Union.

The MEP notes that the established rules are broad for consumers, including pan-European supervision by the European Insurance and Retirement Pensions Authority, a clear set of information that is delivered to the saver. We also contemplate mandatory advice when recommending savers know what they are buying and what they can expect.

The person who contrasts this retirement savings product may move to another EU country and continue to benefit from the same scheme.

Assets managed in the personal pension market could triple up to 2.1 trillion euros by 2030 as a result of this legislation, according to data from the European Commission.

Savers can choose between different investment options, depending on the level of risk with which they feel comfortable. We may also have a basic option (by default) with a rate limit of 1% of the accumulated capital per year,

Tax treatment

Tax incentives can be crucial in determining whether people buy personal pension products. In a separate recommendation to the Council, MEPs argue that the new European model should benefit from preferential tax treatment of countries to attract savers.

One of the options would be for European personal airplanes to receive the same tax treatment as national ones, while the other would be that all EU countries would obtain specific tax treatment.

Next steps

When the Council approves the new rules, they will be published in the Official Journal of the EU and will enter into force 20 days later. They will be applied 12 months after the publication in the Official Journal of the related delegated acts.