Pension funds: PEPP, new trends and solutions

The Pan-European Personal Pension Product (PEPP) in Portugal

Act No.1/2025, published on the 6th of January 2025, complies with Regulation (EU) 2019/1238, which establishes the Pan-European Personal Pension Product (PEPP), a pension savings scheme available across the European Union. The main goal of this product is to offer European citizens a complementary alternative to national pension systems, promoting portability, transparency and consumer protection.

The main points of the regulation, which characterise this investment product, include:

1. Portability: holders can transfer their PEPP between different Member States without losing benefits or facing high costs.
2. Harmonious regulation: equal rules are applied in all European Union countries to ensure a greater transparency and trust on the product.
3. Cost limit: the standard investment option has a maximum level of commissions so that the product is more accessible and returns are better protected.
4. Supervision: the PEPP is regulated by the European Insurance and Occupational Pensions Authority (EIOPA) in addition to national regulators.
5. Surrender options: refund is only allowed under certain conditions, such as retirement, critical illness or long-term unemployment.

Strengthening the third pillar of pensions, based on personal and complementary investment products driven by tax benefits, greater transparency and innovative products, such as PEPP, is essential to ensure greater financial security in retirement, reducing dependence on public systems which increasingly present uncertain sustainability indicators. Therefore, this regulation aims to promote pension savings, increase competition in the sector and offer greater flexibility to European citizens.

The regulation also defines the regulatory authorities of the PEPP in Portugal:

• Autoridade de Supervisão de Seguros e Fundos de Pensões (ASF): responsible for overseeing insurance companies and pension fund managing entities.
• Banco de Portugal: oversees credit institutions in the commercialisation of financial products and services.
• Comissão do Mercado de Valores Mobiliários (CMVM): responsible for overseeing financial intermediation activities, portfolio management for third parties and collective investment bodies.

These provisions aim to ensure an effective and harmonious implementation of the European regulations in the Portuguese financial sector, reinforcing consumer protection and market stability. It has never been more urgent to offer effective and innovative investment and saving solutions, capable of building the foundations of a financially secure and promising future for citizens.

A solution that evolves in line with new market trends

Although not the only one, comprehensive support for the definition, commercialisation and operation of PEPP products is one of the latest developments in Cleva’s solution for pension funds in its continuous alignment with market needs.

Thus, we highlight some of the latest developments which reinforce this commitment:

• Management of accumulation and deaccumulation products with automated payments and contributions (including banking [SEPA], accounting and tax processes).
• Automation of Life Cycle investment options and respective reallocation processes.
• Management of Pan-European Personal Pension Products (PEPP).
• SAFT-(PT)

We also highlight the Pensioners Portal module which allows the integration with online restricted areas and with multiple external channels, such as help desks and companies. It also allows access to a web services catalogue, which enable integration with other systems and present an extensive functional coverage, from data consultation to underwriting and refund transaction execution.

In line with the latest demands from the pension fund sector, Cleva prepared its Participation Units module to support the management of PEPP products. This management allows to encompass different regions in the European Union by compartmentalising movements by contracts, transfers and respective taxation.