Proposal for a regulation
Article 23 – paragraph 4 – subparagraph 1 (new)
4. The PEPP key information document shall be presented in the sequence set out in the following paragraphs: (a) An explanatory statement shall appear directly after the details underneath the title of the PEPP key information document. It shall read: ‘This document provides you with key information about this PEPP. It is not marketing material. The information is required by law to help you understand the nature, risks, costs, and potential gains and losses of this product and to help you compare it with other products.’; (b) Under a section titled ‘What is this product?’, the nature and main features of the PEPP, including: (i) general information about the portability service - ‘We offer a portability service in the following European Union Member States:’ - and a list of the Member States concerned; (ii) general information about the switching service: ‘You may switch investment options and providers every [x] and [x] years respectively. For that we shall charge you [x]% of the capital that has accumulated by the time the switch takes place.’; (iii) where the PEPP offers insurance benefits during the accumulation phase, details of those insurance benefits, including the circumstances that would trigger them; where no such benefits are offered, the following prominently displayed alert: ‘This product provides no insurance cover.’; that information shall be headed by an exclamation mark (!) within a white triangle on a red background; (iv) available information on the investment strategy in the light of environmental, social and governance factors; (v) the law applicable to the PEPP contract where the parties do not have a free choice of law or, where the parties are free to choose the applicable law, the law that the PEPP provider proposes to choose; (c) Under a section titled ‘What are the risks and what could I get in return?’, a brief description of the risk-reward profile comprising the following elements: (i) a summary risk indicator; (ii) the degree of capital protection against market risks - expressed as a percentage of the capital paid in - at the end of the accumulation phase; (iii) information on the past performance of investments under the PEPP scheme over at least the previous 20 years, or, where the scheme has been operating for less than 20 years, over the entire period in which the scheme has been operating, drawing attention to the fact that no assumptions can be made for the future on the basis of that information; (iv) details of the total amount paid out until age 80, 90 and 100 of the PEPP saver on the basis of three performance scenarios - 1%, 2% and 3% - during the decumulation phase; (v) details of the guaranteed lifetime minimum monthly out-payment per EUR 10 000 of paid-in capital; where there are no such payments, the following prominently displayed alert: ‘This product provides no additional lifetime income.’; that information shall be headed by an exclamation mark (!) within a white triangle on a red background; (vi) a brief statement that the tax legislation of the PEPP saver’s home Member State may have an impact on the actual payout; (d) Under a section titled ‘What happens if [the name of the PEPP provider] is unable to pay out?’, a brief description of whether the related loss is covered by an investor compensation or guarantee scheme and, if so, which scheme it is, which risks are covered by the scheme and which are not; (e) Under a section titled ‘What are the costs?’, the likely direct and indirect costs associated with a PEPP investment, aggregated and expressed as a percentage of the invested assets in order to ensure direct comparability. For the cost projection, a constant year-on-year increase of 2% of the invested assets should be assumed; (f) Under a section titled ‘How long should I hold the PEPP and can I take money out early?’ (i) an indication of the recommended holding period, on the basis of the age at which the pension is to be taken, and any mandatory minimum holding period; (ii) the possibility of terminating the PEPP contract early and the conditions for doing so, including all applicable costs and fees; (iii) information about the potential consequences of terminating the contract before the end of the accumulation phase or recommended holding period, such as the loss of capital protection or additional contingent fees; (g) Under a section titled ‘How can I complain?’, information about how and to whom a PEPP saver can make a complaint about the product or the conduct of the PEPP provider or a person advising on, or selling, the product; (h) Under a section titled ‘Other relevant information’, a brief reference to any additional information documents such as any reports on the solvency and financial position of the PEPP provider, excluding any marketing material.