Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-European Personal Pension Product (PEPP) (Text with EEA relevance)

CHAPTER I

GENERAL PROVISIONS

Article 1

Subject matter

This Regulation lays down uniform rules on the registration, manufacturing, distribution and supervision of personal pension products that are distributed in the Union under the designation ‘pan-European Personal Pension product’ or ‘PEPP’.

Article 2

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) ‘personal pension product’ means a product which: (a) is based on a contract between an individual saver and an entity on a voluntary basis and is complementary to any statutory or occupational pension product; (b) provides for long-term capital accumulation with the explicit objective of providing income on retirement and with limited possibilities for early withdrawal before that time; (c) is neither a statutory nor an occupational pension product;

(2) ‘pan-European Personal Pension Product’ or ‘PEPP’ means a long-term savings personal pension product, which is provided by a financial undertaking eligible according to Article 6(1) under a PEPP contract, and subscribed to by a PEPP saver, or by an independent PEPP savers association on behalf of its members, in view of retirement, and which has no or strictly limited possibility for early redemption and is registered in accordance with this Regulation;

(3) ‘PEPP saver’ means a natural person who has concluded a PEPP contract with a PEPP provider;

(4) ‘PEPP contract’ means a contract between a PEPP saver and a PEPP provider which fulfils the conditions laid down in Article 4;

(5) ‘PEPP account’ means a personal pension account held in the name of a PEPP saver or a PEPP beneficiary which is used for the recording of transactions allowing the PEPP saver to contribute periodically sums towards retirement and the PEPP beneficiary to receive PEPP benefits;

(6) ‘PEPP beneficiary’ means a natural person receiving PEPP benefits;

(7) ‘PEPP customer’ means a PEPP saver, a prospective PEPP saver or a PEPP beneficiary;

(8) ‘PEPP distribution’ means advising on, proposing, or carrying out other work preparatory to the conclusion of contracts for providing a PEPP, concluding such contracts, or assisting in the administration and performance of such contracts, including the provision of information concerning one or more PEPP contracts in accordance with criteria selected by PEPP customers through a website or other media and the compilation of a PEPP ranking list, including price and product comparison, or a discount on the price of a PEPP, when the PEPP customer is able to directly or indirectly conclude a PEPP contract using a website or other media;

(9) ‘PEPP retirement benefits’ means benefits paid by reference to reaching, or the expectation of reaching, retirement in one of the forms referred to in Article 58(1);

(10) ‘PEPP benefits’ means PEPP retirement benefits and other additional benefits to which a PEPP beneficiary is entitled in accordance with the PEPP contract, in particular for the strictly limited cases of early redemption or if the PEPP contract provides a coverage of biometric risks;

(11) ‘accumulation phase’ means the period during which assets are accumulated in a PEPP account and ordinarily runs until the decumulation phase starts;

(12) ‘decumulation phase’ means the period during which assets accumulated in a PEPP account may be drawn upon to fund retirement or other income requirements;

(13) ‘annuity’ means a sum payable at specific intervals over a period, such as the PEPP beneficiary’s life or a certain number of years, in return for an investment;

(14) ‘drawdown payments’ means discretionary amounts which PEPP beneficiaries may draw up to a certain limit on a periodic basis;

(15) ‘PEPP provider’ means a financial undertaking as referred to in Article 6(1) authorised to manufacture a PEPP and to distribute that PEPP;

(16) ‘PEPP distributor’ means a financial undertaking as referred to in Article 6(1) authorised to distribute PEPPs not manufactured by it, an investment firm providing investment advice, or an insurance intermediary as defined in point (3) of Article 2(1) of Directive (EU) 2016/97 of the European Parliament and of the Council (¹);

(17) ‘durable medium’ means any instrument which: (a) enables a PEPP customer to store information addressed personally to that customer in a way accessible for future reference and for a period of time adequate for the purposes of the information; and (b) allows the unchanged reproduction of the information stored;

(18) ‘competent authorities’ means the national authorities designated by a Member State to supervise PEPP providers or PEPP distributors, as the case may be or to carry out the duties provided for in this Regulation;

(19) ‘home Member State of the PEPP provider’ means home Member State as defined in the relevant legislative act referred to in Article 6(1);

(20) ‘home Member State of the PEPP distributor’ means: (a) where the distributor is a natural person, the Member State in which his or her residence is situated; (b) where the distributor is a legal person, the Member State in which its registered office is situated or, where the distributor under its national law has no registered office, the Member State in which its head office is situated;

(21) ‘host Member State of the PEPP provider’ means a Member State, other than the home Member State of the PEPP provider, in which the PEPP provider provides PEPPs under the freedom to provide services or the freedom of establishment or for which the PEPP provider has opened a sub-account;

(22) ‘host Member State of the PEPP distributor’ means a Member State, other than the home Member State of the PEPP distributor, in which the PEPP distributor distributes PEPPs under the freedom to provide services or the freedom of establishment;

(23) ‘sub-account’ means a national section which is opened within each PEPP account and which corresponds to the legal requirements and conditions for using possible incentives fixed at national level for investing in a PEPP by the Member State of the PEPP saver’s residence; accordingly, an individual may be a PEPP saver or a PEPP beneficiary in each sub-account, depending on the respective legal requirements for the accumulation phase and decumulation phase;

(24) ‘capital’ means aggregate capital contributions, calculated on the basis of amounts investible after deduction of all fees, charges and expenses that are directly or indirectly borne by PEPP savers;

(25) ‘financial instruments’ means those instruments specified in Section C of Annex I to Directive 2014/65/EU of the European Parliament and of the Council (²);

(26) ‘depositary’ means an institution charged with the safekeeping of assets and oversight of compliance with the fund rules and applicable law;

(27) ‘Basic PEPP’ means an investment option as laid down in Article 45;

(28) ‘risk mitigation techniques’ means techniques for a systematic reduction in the extent of exposure to a risk and/or the likelihood of its occurrence;

(29) ‘biometric risks’ means risks linked to death, disability and/or longevity;

(30) ‘switching provider’ means, upon a PEPP saver’s request, transferring from one PEPP provider to another the corresponding amounts, or where applicable assets-in-kind in accordance with Article 52(4), from one PEPP account to the other, with closing the former PEPP account without prejudice to point (e) of Article 53(4);

(31) ‘advice’ means a personal recommendation provided by the PEPP provider or PEPP distributor to a PEPP customer in respect of one or more PEPP contracts;

(32) ‘partnership’ means cooperation between PEPP providers to offer sub-accounts for different Member States in the context of the portability service, as referred to in Article 19(2);

(33) ‘environmental, social and governance factors’ or ‘ESG factors’ means environmental, social and governance matters such as those referred to in the Paris Agreement, the United Nations Sustainable Development Goals, the United Nations Guiding Principles on Business and Human Rights and the United Nations-supported Principles for Responsible Investment.

Article 3

Applicable rules

The registration, manufacturing, distribution and supervision of PEPPs shall be subject to:

(a) this Regulation; and

(b) in the case of matters not regulated by this Regulation: (i) relevant sectorial Union law including the corresponding delegated and implementing acts; (ii) the laws adopted by Member States in implementation of relevant sectorial Union law and implementation of measures relating specifically to PEPPs; (iii) other national laws which apply to PEPPs.

Article 4

PEPP contract

The PEPP contract shall in particular include the following:

(a) a description of the Basic PEPP, as referred to in Article 45, including information on the guarantee on the capital invested or the investment strategy directed at ensuring the capital protection;

(b) a description of the alternative investment options, as referred to in Article 42(2), where applicable;

(c) the conditions related to the modification of the investment option referred to in Article 44;

(d) where the PEPP offers biometric risk coverage, details of that coverage, including the circumstances that would trigger it;

(e) a description of the PEPP retirement benefits, in particular the possible forms of out-payments and the right to change the form of out-payment referred to in Article 59;

(f) the conditions related to the portability service referred to in Articles 17 to 20 including information on the Member States for which a sub-account is available;

(g) the conditions related to the switching service referred to in Articles 52 to 55;

(h) the categories of costs and total aggregate costs expressed in percentage terms and in monetary terms, where applicable;

(i) the conditions related to the accumulation phase for the sub-account corresponding to the Member State of residence of the PEPP saver referred to in Article 47;

(j) the conditions related to the decumulation phase for the sub-account corresponding to the Member State of residence of the PEPP saver referred to in Article 57;

(k) where applicable, the conditions under which advantages or incentives granted are to be repaid to the Member State of residence of the PEPP saver.

CHAPTER II

REGISTRATION

Article 5

Registration

Supervision of compliance with this Regulation on an ongoing basis shall be carried out in accordance with Chapter IX.

Article 6

Application for registration of a PEPP

Only the following financial undertakings authorised or registered under Union law may apply for registration of a PEPP:

(a) credit institutions authorised in accordance with Directive 2013/36/EU of the European Parliament and of the Council (³);

(b) insurance undertakings authorised in accordance with Directive 2009/138/EC of the European Parliament and of the Council (⁴), engaged in direct life insurance according to Article 2(3) of Directive 2009/138/EC and Annex II to that Directive;

(c) institutions for occupational retirement provision (IORPs) authorised or registered in accordance with Directive (EU) 2016/2341 which, pursuant to national law, are authorised and supervised to provide also personal pension products. In that case, all assets and liabilities corresponding to PEPP provision business shall be ring-fenced, without any possibility to transfer them to the other retirement provision business of the institution;

(d) investment firms authorised in accordance with Directive 2014/65/EU, providing portfolio management;

(e) investment companies or management companies authorised in accordance with Directive 2009/65/EC;

(f) EU alternative investment fund managers (EU AIFM) authorised in accordance with Directive 2011/61/EU.

Financial undertakings listed in paragraph 1 of this Article shall submit the application for registration of a PEPP to their competent authorities. The application shall include the following:

(a) the standard contract terms of the PEPP contract to be proposed to PEPP savers, as referred to in Article 4;

(b) information on the identity of the applicant;

(c) information on arrangements regarding portfolio and risk management and administration with regard to the PEPP, including arrangements as referred to in Articles 19(2), 42(5) and 49(3);

(d) a list of Member States where the applicant PEPP provider intends to market the PEPP, where applicable;

(e) information on the identity of the depositary, where applicable;

(f) PEPP key information as referred to in Article 26;

(g) a list of Member States for which the applicant PEPP provider will be able to ensure the immediate opening of a sub-account.

The competent authorities shall set a time limit by which the applicant is to provide additional information, if the application is not complete. After the application is considered to be complete, the competent authorities shall notify the applicant accordingly.

EIOPA shall not be responsible or be held liable for a decision for registration taken by competent authorities.

Where the competent authorities refuse to grant registration, they shall issue a reasoned decision which shall be subject to a right to appeal.

Any subsequent modifications to the information and documents provided in the application referred to in paragraph 2 shall be immediately notified to the competent authorities. Where modifications are in relation to the information and documents referred to in points (a), (b), (d), (f) and (g) of paragraph 2, the competent authorities shall communicate those modifications to EIOPA without undue delay.

Article 7

Registration of a PEPP

Article 8

Conditions for deregistration of a PEPP

The competent authorities shall issue a decision for deregistration of the PEPP when:

(a) the PEPP provider expressly renounces the registration;

(b) the PEPP provider has obtained the registration by making false statements or by any other irregular means;

(c) the PEPP provider has seriously or systematically infringed this Regulation; or

(d) the PEPP provider or the PEPP no longer meets the conditions under which registration was granted.

Article 9

Designation

The designation ‘pan-European Personal Pension Product’ or ‘PEPP’ in relation to a personal pension product may only be used where the personal pension product has been registered by EIOPA to be distributed under the designation ‘PEPP’ in accordance with this Regulation.

Article 10

Distribution of PEPPs

Article 11

Prudential regime applicable to different types of providers

PEPP providers and PEPP distributors shall comply with this Regulation, as well as with the relevant prudential regime applicable to them in accordance with the legislative acts referred to in Articles 6(1) and 10(2).

Article 12

Publication of national provisions

Article 13

Central public register

CHAPTER III

CROSS-BORDER PROVISION AND PORTABILITY OF PEPP

SECTION I

Freedom to provide services and freedom of establishment

Article 14

Exercise of the freedom to provide services and freedom of establishment by PEPP providers and PEPP distributors

Article 15

Exercise of the freedom to provide services by IORPs and EU AIFM

PEPP providers as referred to in points (c) and (f) of Article 6(1) which intend to provide PEPPs to PEPP savers within the territory of a host Member State for the first time under the freedom to provide services and after notifying their intention to open a sub-account for this host Member State in accordance with Article 21, shall communicate the following information to the competent authorities of their home Member State:

(a) the name and address of the PEPP provider;

(b) the Member State in which the PEPP provider intends to provide or distribute PEPPs to PEPP savers.

Where the competent authorities of the home Member State refuse to communicate the information to the competent authorities of the host Member State, they shall give reasons for such refusal to the PEPP provider concerned within one month of receiving all the information and documents. The refusal or any failure to reply shall be subject to the right to appeal to the courts in the PEPP provider’s home Member State.

Article 16

Powers of the competent authorities of the host Member State

In addition, the competent authorities of the home Member State or the competent authorities of the host Member State may refer the matter to EIOPA and request its assistance in accordance with Article 19 of Regulation (EU) No 1094/2010.

SECTION II

Portability

Article 17

The portability service

Article 18

Provision of the portability service

Article 19

Sub-accounts of the PEPP

Having regard to the scope of the functions to be carried out by the partner, the partner shall be qualified and capable of undertaking the delegated functions. The PEPP provider shall enter into a written agreement with the partner. The agreement shall be legally enforceable and shall clearly define the rights and obligations of the PEPP provider and of the partner. The agreement shall comply with the relevant rules and procedures for delegation and outsourcing established by or under the Union law applicable to them, as referred to in Article 6(1). Notwithstanding that agreement, the PEPP provider shall remain solely liable for its responsibilities under this Regulation.

Article 20

Opening of a new sub-account

In that case, the PEPP provider shall provide the PEPP saver free of charge with the PEPP KID, containing the specific requirements referred to in point (g) of Article 28(3) for the sub-account corresponding to the new Member State of residence of the PEPP saver.

In the case that a new sub-account is not available, the PEPP provider shall inform the PEPP saver about the right to switch without delay and free of charge and of the possibility to continue saving in the last sub-account opened.

If the PEPP saver intends to make use of the possibility to open a sub-account, the PEPP saver shall inform the PEPP provider of the following:

(a) the PEPP saver’s new Member State of residence;

(b) the date from which the contributions shall be directed to the new sub-account;

(c) any relevant information about other conditions for the PEPP.

Where the PEPP provider is not able to ensure the opening of a new sub-account corresponding to the PEPP saver’s new Member State of residence, the PEPP saver shall according to his or her choice be able to:

(a) switch PEPP provider without delay and free of charge notwithstanding the requirements of Article 52(3) on the frequency of switching; or

(b) continue contributing to the last sub-account opened.

Article 21

Provision of information on portability to the competent authorities

The PEPP provider shall include in the notification the following information and documents:

(a) standard contract terms of the PEPP contract, as referred to in Article 4, including the annex for the new sub-account;