The European Commission recently launched a targeted consultation on supplementary pensions, asking market players how to improve transparency, sustainability, and cross-border portability of pensions in Europe. Finax, as first PEPP (Pan-European Personal Pension Product) provider, shared its perspective.
Pension Tracking & Dashboards
The pension tracking systems should be comprehensive, simple, and impartial. Today, Slovaks have limited access to state-provided tracking, with little public awareness and no integration of 2nd, 3rd pillar, or PEPP savings.
From 2026, Slovakia will provide projections across all pillars in paper form. Still, Finax argues for an EU-wide tracking system so people can see all entitlements in one place, especially when working in multiple countries.
Dashboards should show:
- data from all pension pillars,
- long-term adequacy and sustainability projections,
- breakdowns by gender, age, and income.
Auto-Enrolment
Finax supports auto-enrolment as a behavioural nudge that gets more people saving. Slovakia introduced it in 2023, automatically enrolling newcomers into a pension fund unless they opt out.
Key success factors include:
- low starting contributions, rising over time,
- state incentives, especially for low-income groups,
- employer involvement, supported by tax breaks,
- regular opt-out windows.
Default plans should follow a lifecycle strategy (gradual derisking before retirement) – something Finax already uses in its PEPP with a 10-year glide path.
Fixing the PEPP Regulation
While we believe in the PEPP’s potential, we also highlight serious barriers:
- High costs & rigid rules: Stochastic modelling and mandatory advice make PEPP too expensive. Finax proposes to abandon both, relying instead on lifecycle investing.
- Fee cap issues: The 1% cap is too strict if it includes VAT and underlying fund costs. They propose excluding certain costs, or introducing a performance-based measure (CEPR) to link fees to value delivered.
- Employer involvement: Allowing companies to contribute to PEPPs is crucial. In countries where this is possible, uptake is much higher.
- Distribution & marketing: Current rules restrict digital marketing, referrals, and affiliate channels. We argue for more flexibility to spread awareness.
- Cross-border complexity: Sub-account structures complicate portability. We suggest one account across the EU and allowing transfers between PEPP and national products.
Unequeal tax treatment
The biggest obstacle remains unequal tax treatment. In countries where PEPP gets the same tax breaks as national pensions (e.g. Croatia, Poland), adoption is up to nine times higher than in countries without parity.
Finax calls for:
- EU-level action to align tax incentives,
- equal VAT treatment for all providers,
- employer contributions treated as tax-deductible business expenses,
- harmonised withdrawal rules.
Conclusion
PEPP can succeed only if simplified, affordable, and fairly treated across Europe. That means less bureaucracy, more flexibility for providers, strong employer involvement, and harmonised tax incentives.
If these reforms are made, the PEPP could become a true European standard for retirement saving – helping millions of citizens secure their future, while also supporting long-term investment in Europe’s economy.