An Insight of the Future - Pan European Pension Product

The problems of aging population, the funding of adequate pensions, and increasing mobility of workers have been recognized for decades and EU institutions have now with pan-European personal pension product, a significant opportunity to offer to EU citizens a portable and practical tool to supplement the funding of their pension. The pan-European personal pension product, PEPP for short, is especially pertinent, as it will allow to pair long-term savings with long-term assets, such as bonds, stocks, private equity, and contribute to the financing and the development of the real economy. The objective of this article, in the context of the dynamic of the EU population, is to explain the need for such product, the potential of the PEPP from consumers of financial services perspective, by determining those specific features that could be incorporated into a PEPP framework. Because it addresses a significant number of people across the EU, consumer protection is the key of the topic of financial innovation, so transparency, simplicity and fairness in the market for consumer financial products and services are issues that must prevail. On the other hand simplicity of the PEPP products is no guarantee for pension safety and adequacy of this pensions plans. Supplementary, the PEPP should have sufficiently attractive characteristic to entice prospective consumers.