Financial Services & Fintech

Introducing Regulation (EU) 2019/1238 on a pan-European Personal Pension Product (PEPP)

16 Apr 2021

5 min read

Author: Kurt Hyzler

On 26 March 2021, the MFSA issued a Circular regarding the implementation of Regulation (EU) 2019/1238 on a pan-European Personal Pension Product (the Regulation). Applicable as from 22 March 2022, the Regulation recognizes that despite EU households being among the highest savers in the world, the bulk of those savings are held in bank accounts with short maturities. The Regulation further recognizes that old age pensions constitute an essential part of a retiree’s income.

The Regulation was introduced with the intention of encouraging the provision and distribution of personal pension products across the internal market. It was acknowledged that, some Member States do not yet have a market for personal pension products, while other States in which such products are available have a high degree of fragmentation between national markets, limiting the degree of portability of these products.

The Regulation plans to introduce a portable pan-European Personal Pension Product (PEPP) with the aim of creating an attractive product for young people and mobile works, and in order to further facilitate EU citizens to live and work across the Union. The PEPP will complement existing public and occupational pension systems, as well as national private pension schemes.

What is PEPP?

PEPP means a long-term savings personal pension product, which is provided by an eligible financial undertaking (as defined below) and is subscribed to by a PEPP saver, in view of retirement. The Regulation requires that PEPPs should provide for long-term capital accumulation and thus the possibilities for early redemption are to be strictly limited.

The financial undertakings eligible to apply for registration of a PEPP are the following:

  1. Credit institutions authorised in accordance with Directive 2013/36/EU
  2. Insurance undertakings authorised in accordance with Directive 2009/138/EC, provided that these are engaged in direct life insurance according to that Directive
  3. Institutions for occupational retirement provision (IORP) authorised or registered in accordance with Directive (EU) 2016/2341 which are also authorised to issue personal pension products pursuant to national law
  4. Investment firms authorised in accordance with Directive 2014/65/EU, providing portfolio management
  5. Investment companies or management companies authorised in accordance with Directive 2009/65/EC
  6. EU alternative investment fund managers (EU AIFMs) authorised in accordance with Directive 2011/61/EU

Any of the above-mentioned financial undertakings may also be authorised to distribute a PEPP which is not manufactured by them. Other entities which can distribute a PEPP and thus fall under the category of a PEPP Distributor are investment firms providing investment advice, or insurance intermediaries as defined in the Insurance Distribution Directive.

In order to provide and distribute a PEPP, any of the above financial undertakings must first apply for registration to the MFSA. Following MFSA approval, the PEPP shall then be registered in a central register kept by EIOPA. Once registered, PEPP providers and distributors will be able to sell their PEPP in all EU Member States.

Obligations of PEPP Providers

Financial undertakings interested in providing or distributing PEPPs must adhere to certain obligations arising out of the Regulation. For instance, PEPP providers shall, prior to the conclusion of a contract, provide PEPP Savers with a Key Information Document (KID). This document will assist prospective PEPP savers in obtaining further knowledge on the PEPP and in identifying any risks and rewards before signing up to the contract. Once a contract has been successfully concluded, PEPP providers shall then provide PEPP savers with a personalized PEPP Benefit Statement annually, which shall include the amount of contributions made, costs incurred and investment returns.

PEPP providers and/or distributors shall also have an obligation to provide personal advice to PEPP savers, both prior to purchasing the PEPP as well as prior to retirement.

Portability of PEPP

In order to facilitate freedom of movement across the Union, where a PEPP saver changes their country of residence, the PEPP saver shall have the following options:

  1. To open a PEPP sub-account with the same PEPP provider in their new Member State of residence, where the PEPP provider makes such an option available
  2. To switch provider free of charge and without delay
  3. To continue to contribute to the PEPP within the previous country of residence

Freedom of Establishment

A PEPP provider or distributor may provide or distribute its services on a cross-border basis within the territory of a host Member State via the freedom of establishment and the freedom of services, subject to the PEPP provider first notifying the MFSA of its intention.


Once registered with the MFSA, PEPP providers shall provide requested information to the MFSA on an annual basis. Such reporting requirements shall form part of the MFSA’s supervisory role of registered PEPPs. The MFSA shall ensure that all PEPP providers are providing their products in accordance with the Regulation and that the PEPP providers are in accordance with the relevant sectorial supervisory regime and standards.


The MFSA has issued a survey with the intention of further understanding interest of the market in this product. Interested parties are encouraged to complete this survey by 23 April 2021.