Romanians who want to save extra for retirement have, at least theoretically, a new option: the pan-European personal pension (PEPP), a financial product created at the European Union level that allows saving for retirement regardless of the country in which a person works.
Although it came into force in 2022 and promises advantages such as portability between EU countries, the product has not managed to attract many participants so far, as shown by an analysis published by Profit. The European Commission is already preparing changes to the regulations to make it more attractive, and Romania has started to introduce tax incentives similar to those for voluntary private pensions.
Tax Deductions of up to 800 Euros per Year
Romanian authorities have decided that pan-European pensions should benefit from the same tax regime as optional pensions in Pillar III.
Starting with the incomes for the month of March 2026, contributions are deductible up to 400 euros per year for the employee and an additional 400 euros for the employer if they decide to contribute for the employee.
The measure was announced by the Minister of Finance, Alexandru Nazare, after an EcoFin meeting. The tax facility had been planned since 2024, but the application procedures were clarified only at the beginning of this year.
Main Advantage: "Portable" Pension in the EU
The pan-European pension is designed as a savings product that can be used in any member state.
The main advantage is portability: a person can continue to contribute to the same account even if they change jobs or the country they live in.
Furthermore, the basic product has capped administration costs and is open to any individual in the EU – employees, freelancers, students, or even the unemployed. The initial idea was to create a simple and accessible system to complement public pensions and existing private schemes in each country.
Low Interest in Europe
In practice, however, the product has not generated enthusiasm. The European Insurance and Occupational Pensions Authority (EIOPA) register shows very few active providers, including companies like Finax from Slovakia and Emeritus from Cyprus.
Additionally, the number of clients is low. For example, Finax, the main provider, has set a goal of reaching approximately 20,000 clients for its PEPP product in Europe.
In Romania, most pension funds and insurance companies have not yet introduced this product in their offerings, indicating that the market is in an early stage, as reported by Profit.
Why the Pan-European Pension Has Not Caught On
The European Commission believes that several characteristics of the product have discouraged providers and clients.
Among the identified issues are:
- The 1% cap on management fees, considered too restrictive;
- The obligation to provide financial advice before selling the product;
- The requirement for providers to offer national sub-accounts for at least two member states;
- Strict rules on protecting invested capital.
These conditions have made the product more challenging to distribute and less attractive than national private pension systems.
Brussels Prepares Rule Changes
To revitalize the system, the European Commission has proposed amending the regulation on pan-European pensions.
Among the changes being considered are:
- Removing the 1% cap on fees;
- The possibility of selling the product online without mandatory advice;
- Simplifying requirements for providers;
- Introducing an investment strategy based on the life cycle, which reduces risk as the participant approaches retirement.
At the same time, the Commission wants member states to offer similar tax incentives for these products so that they can compete fairly with national systems.
Participation in Supplementary Pensions Remains Low
European data shows that saving for retirement outside the public system is still limited.
According to the European Commission, only 20% of Europeans participate in occupational pension schemes, and 18% have personal pension products.
One of the solutions being considered is the introduction of an "opt-out" system, where employees are automatically enrolled in a savings scheme but can choose to opt out. The model has already been implemented in countries like the UK, Italy, or Poland and has led to increased participation.
In Romania, such a debate has not yet begun.
The European Commission's proposal to revise the PEPP regulation is currently under negotiation between the European Parliament and the EU Council.
If adopted, the new version of the regulation could come into force in 2027, with the aim of transforming the pan-European pension into a standard, simple, and accessible product for EU citizens.