PEPP – pan-European Personal Pension Product

The pan-European Personal Pension Product, known as PEPP, officially became law on September 26, 2023. PEPP is a European pension plan designed to offer supplementary income in addition to both the state pension and its associated support structures.

Who is Eligible?

Any individual residing within the EU can take advantage of PEPP, regardless of their employment status. This includes individuals who are unemployed, on maternity leave, or currently enrolled as students. Participation is voluntary, allowing anyone to join and contribute funds, up to an annual limit set at three times the average monthly salary in the national economy per year.

Portability Across the Union

PEPP is portable across the entire European Union. This means that individuals who change their place of residence within the EU can continue to contribute to the PEPP account they originally opened in their previous country of residence. Simultaneously, these individuals retain all the benefits associated with ongoing investments in the same product. It’s important to note that only one saver can accumulate savings in a PEPP account, preventing the option of opening a joint PEPP sub-account, such as for spouses.

PEPP Providers

PEPP will be offered in all EU member countries by financial entities authorized to create and distribute PEPPs. These providers may include institutions such as credit entities, insurance firms, pension companies, and investment firms. Any provider wishing to offer a PEPP must undergo a registration process. Once registered, the product can be made available and distributed throughout the EU.

Tax Advantages

PEPP savers will be exempt from personal income tax under specific conditions. This exemption is available to those who:

Do not withdraw their accumulated savings until they reach the age of 60.

Become eligible for retirement, are at least 55 years old, and have been PEPP savers for a minimum of five years.

Have contributed more than half the value of their PEPP contributions no later than five years before their withdrawal request.

Tax Lawyer – Poland

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