Irish private pensions set for boost with new EU pension product – Hayes
Today (Thursday) the European Commission launched its new Pan-European Personal Pension Product (PEPP) – a new standalone personal pension product that can be bought or sold anywhere in the EU. Brian Hayes welcomed this as a major step for the EU and said it could provide a major boost in the take-up of private pensions in Ireland.
“If we get this right, the Pan European Pension product (PEPP) has a real opportunity to improve all our national pension systems in the EU.
“In Ireland we have a pension time bomb coming down the tracks. Only about 41% of the working population is covered by a private pension scheme, whether that is a workplace pension or a personal pension. That means that hundreds of thousands of workers could be dependent on a state pension into the future.
“The state pension system is going to come under increasing pressure into the future. Therefore, we need to encourage Irish citizens to supplement state savings with workplace pensions and personal pensions.
“The EU’s new personal pension product may not be the silver bullet to our pension time bomb but it offers huge incentives for consumers that want a simple, safe and transparent product to help them save for retirement.
“The portability aspect of the product is a real benefit for the modern day workforce as the product can be easily transferred from one Member State to another. It would also make sense that consumers could switch pension providers easily if they can find a cheaper offer in another Member State. Consumers should be able to shop around to get value-for-money products – that’s why we have a single market.
“The Irish government needs to get on board with this proposal to get the best result for people who want to put money aside for retirement.
“There is still a long way to go with this proposal and it has to go through the EU legislative process which requires the approval of the European Parliament and Council. It remains to be seen how the tax treatment of the PEPP will be resolved given that there are 28 different tax regimes that apply to personal pensions in the EU.
“When completed, this will be an important step for the development of a single market for pensions in the EU. I think there is a lot more we can do to integrate our private pension systems and allow consumers to transfer their pension benefits to other Member States.”