Europe launches pension scheme for young expats

Pension plan for young people and Erasmus students in Europe / Gtres
Pension plan for young people and Erasmus students in Europe / Gtres
7 May 2019, Redaction

More and more young people are going to different countries for work or study, so the European Union has come up with a flexible supplementary pension that can be transferred between the various Member States of the EU.

It is called PEPP (Pan-European Personal Pension Product or Pan-European Pension Product) and has already been renamed the “Erasmus of pensions”. In essence, it is a social security product that allows access to a "stock" pension with advantageous tax conditions that can be easily transferred between all EU countries.

The idea first started to be discussed in 2017 and it is estimated that it should come into force as early as 2021, providing about 700 billion euro of additional savings. 11.3 million Europeans of working age residing in a Member State other than their country of citizenship and another 1.3 million citizens working in a European country other than their country of residence will all have access to the PEPP.

The PEPP is a service that is offered by banks, insurance companies, investment funds, pension funds and alternative funding sources. It will mean savers don’t have to change their initial pension plan signed with an intermediary when they emigrate to a different country, whether to study on an Erasmus scheme or to work.

The task of standardising the contractual rules with each change of residence will not reside with the customer who has the savings account, but rather with the intermediaries who offer the service. In any case, the EU has set a baseline PEPP level that must contain a guarantee on the capital invested or otherwise use financial strategies to protect the capital.

The ECON committee of the European Parliament has approved the PEPP regulation, even if the final approval lacks the formal go-ahead of the European Parliament and the European Council. However, the agreement has already been reached at the end of a negotiation, ratified last 26th February by the ECON committee of the same Parliament with 25 votes in favour (including Italy), 4 against and 17 abstentions.

From the original Italian language article: Pepp: l’Ue lancia la pensione portabile per i millennials (Wall street italia)

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