PEPP KID
1. Before a PEPP is proposed to PEPP savers, the PEPP provider shall draw up a PEPP KID for that PEPP product in accordance with the requirements of this Section and shall publish the PEPP KID on its website.
2. The PEPP KID shall constitute pre-contractual information. It shall be accurate, fair, clear and not misleading. It shall provide key information and shall be consistent with any binding contractual documents, with the relevant parts of the offer documents and with the terms and conditions of the PEPP.
3. The PEPP KID shall be a stand-alone document, clearly separate from marketing materials. It shall not contain cross-references to marketing materials. It may contain cross-references to other documents including a prospectus where applicable, only where such cross-references are related to the information required to be included in the PEPP KID by this Regulation.
A separate PEPP KID shall be drawn up for the Basic PEPP.
4. Where a PEPP provider offers to a PEPP saver a range of alternative investment options such that all information required in Article 28(3) regarding those underlying investment options cannot be provided within a single, concise, stand-alone PEPP KID, PEPP providers shall produce one of the following:
(a)
a stand-alone PEPP KID for each alternative investment option;
(b)
a generic PEPP KID providing at least a generic description of the alternative investment options and stating where and how more detailed pre-contractual information relating to the investments backing those investments options can be found.
5. In accordance with Article 24, the PEPP KID shall be drawn up as a short document written in a concise manner. It shall:
(a)
be presented and laid out in a way that is easy to read, using characters of readable size;
(b)
focus on the key information that PEPP customers need;
(c)
be clearly expressed and written in language and a style that facilitates the understanding of the information and, in particular, in language that is clear, succinct and comprehensible.
6. Where colours are used in the PEPP KID, they shall not diminish the comprehensibility of the information if the PEPP KID is printed or photocopied in black and white.
7. Where the corporate branding or logo of the PEPP provider or the group to which it belongs is used in the PEPP KID, it shall not distract from the information contained in the document or obscure the text.
8. In addition to the PEPP KID, PEPP providers and PEPP distributors shall provide prospective PEPP savers with references to any publicly available reports on the financial condition of the PEPP provider, including its solvency, allowing prospective PEPP savers easy access to this information.
9. Prospective PEPP savers shall also be provided with information on the past performance of the PEPP saver’s investment option covering performance of a minimum of 10 years or, in cases where the PEPP has been provided for less than 10 years, covering all the years for which the PEPP has been provided. Information on past performance shall be accompanied by the statement ‘past performance is not indicative of future performance’.
Language of the PEPP KID
1. The PEPP KID shall be written in the official languages, or in at least one of the official languages, used in the part of the Member State where the PEPP is distributed, or in another language accepted by the competent authorities of that Member State, or where it has been written in a different language, it shall be translated into one of those languages.
The translation shall faithfully and accurately reflect the content of the original PEPP KID.
2. If a PEPP is marketed in a Member State through marketing materials in one or more of the official languages of that Member State, the PEPP KID shall at least be in the corresponding official languages.
3. The PEPP KID shall be made available upon request in an appropriate format to PEPP savers with a visual impairment.
Content of the PEPP KID
1. The title ‘PEPP Key Information Document’ shall appear prominently at the top of the first page of the PEPP KID.
The PEPP KID shall be presented in the sequence laid down in paragraphs 2 and 3.
2. An explanatory statement shall appear directly underneath the title. It shall read:
‘This document provides you with key information about this pan-European Personal Pension Product (PEPP). It is not marketing material. The information is required by law to help you understand the nature, risks, costs, potential gains and losses of this personal pension product and to help you compare it with other PEPPs.’.
3. The PEPP KID shall contain the following information:
(a)
at the beginning of the document: the name of the PEPP, whether it is a Basic PEPP or not, the identity and contact details of the PEPP provider, information about the competent authorities of the PEPP provider, the registration number of the PEPP in the central public register and the date of the document;
(b)
the statement: ‘The retirement product described in this document is a long-term product with limited redeemability which cannot be terminated at any time.’;
(c)
under a section titled ‘What is this product?’, the nature and main features of the PEPP, including:
(i)
its long-term objectives and the means for achieving them, in particular whether the objectives are achieved by means of direct or indirect exposure to the underlying investment assets, including a description of the underlying instruments or reference values, including a specification of the markets the PEPP provider invests in, as well as an explanation of how the return is determined;
(ii)
a description of the type of PEPP saver to whom the PEPP is intended to be marketed, in particular in terms of the PEPP saver’s ability to bear investment loss and the investment horizon;
(iii)
a statement as to
—
whether the Basic PEPP provides a guarantee on the capital or takes the form of a risk-mitigation technique consistent with the objective to allow the PEPP saver to recoup the capital, or
—
whether and to what extent any alternative investment option, if applicable, provides a guarantee or a risk-mitigation technique;
(iv)
a description of the PEPP retirement benefits, in particular the possible forms of out-payments and the right to modify the form of out-payments as referred to in Article 59(1);
(v)
where the PEPP covers biometric risk: details of the risks covered and of the insurance benefits, including the circumstances in which those benefits may be claimed;
(vi)
information on the portability service, including a reference to the central public register referred to in Article 13 where information for the conditions for the accumulation phase and the decumulation phase determined by Member States in accordance with Articles 47 and 57 is contained;
(vii)
a statement on the consequences for the PEPP saver of early withdrawal from the PEPP, including all applicable fees, penalties, and possible loss of capital protection and of other possible advantages and incentives;
(viii)
a statement on the consequences for the PEPP saver if the PEPP saver stops contributing to the PEPP;
(ix)
information on the sub-accounts available and on the PEPP saver’s rights referred to in Article 20(5);
(x)
information about the PEPP saver’s right to switch and the right to receive information about the switching service as referred to in Article 56;
(xi)
the conditions for modification of the chosen investment option referred to in Article 44;
(xii)
information, where available, related to the performance of the PEPP provider’s investments in terms of ESG factors;
(xiii)
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;
(xiv)
where applicable, whether there is a cooling-off period or cancellation period for the PEPP saver;
(d)
under a section titled ‘What are the risks and what could I get in return?’, a short description of the risk-reward profile comprising the following elements:
(i)
a summary risk indicator, supplemented by a narrative explanation of that indicator, its main limitations and a narrative explanation of the risks which are materially relevant to the PEPP and which are not adequately captured by the summary risk indicator;
(ii)
the possible maximum loss of invested capital, including, information on:
—
whether the PEPP saver can lose all invested capital, or
—
whether the PEPP saver bears the risk of incurring additional financial commitments or obligations;
(iii)
appropriate performance scenarios and the assumptions on which they are based;
(iv)
where applicable, conditions for returns to PEPP savers or built-in performance caps;
(v)
a statement that the tax law of the PEPP saver’s Member State of residence may have an impact on the actual payout;
(e)
under a section titled ‘What happens if [the name of the PEPP provider] is unable to pay out?’, a short description of whether the related loss is covered by an investor compensation or guarantee scheme and if so, which scheme it is, the name of the guarantor and which risks are covered by the scheme and which are not;
(f)
under a section titled ‘What are the costs?’, the costs associated with an investment in the PEPP, comprising both direct and indirect costs to be borne by the PEPP saver, including one-off and recurring costs, presented by means of summary indicators of those costs and, to ensure comparability, total aggregate costs expressed in monetary and percentage terms, to show the compound effects of the total costs on the investment.
The PEPP KID shall include a clear indication that the PEPP provider or PEPP distributor shall provide information detailing any cost of distribution that is not already included in the costs specified above, so as to enable the PEPP saver to understand the cumulative effect that those aggregate costs have on the return of the investment;
(g)
under a section titled ‘What are the specific requirements for the sub-account corresponding to [my Member State of residence]?’:
(i)
under a sub-section titled ‘Requirements for the pay-in phase’:
a description of the conditions for the accumulation phase, as determined by the Member State of residence of the PEPP saver in accordance with Article 47;
(ii)
under a sub-section titled: ‘Requirements for the pay-out phase’:
a description of the conditions for the decumulation phase, as determined by the Member State of residence of the PEPP saver in accordance with Article 57;
(h)
under a section titled ‘How can I complain?’: information about how and to whom a PEPP saver can make a complaint about the PEPP or the conduct of the PEPP provider or PEPP distributor.
4. Layering of the information required under paragraph 3 shall be permitted where the PEPP KID is provided in an electronic format, whereby detailed parts of the information can be presented through pop-ups or through links to accompanying layers. In this case, it shall be possible to print the PEPP KID as one single document.
5. In order to ensure consistent application of this Article, EIOPA shall, after consulting the other ESAs and after conducting consumer testing and industry testing, develop draft regulatory technical standards specifying:
(a)
the details of the presentation, including the form and length of the document, and the content of each of the elements of information referred to in paragraph 3;
(b)
the methodology underpinning the presentation of risk and reward as referred to in points (d)(i) and (iii) of paragraph 3;
(c)
the methodology for the calculation of costs, including the specification of summary indicators, as referred to in point (f) of paragraph 3;
(d)
where information is presented in an electronic format with layering of information, which information shall be in the first layer, and which information may be provided in the additional layers of detail.
When developing the draft regulatory technical standards, EIOPA shall take into account the various possible types of PEPPs, the long-term nature of the PEPP, the capabilities of PEPP savers, and the features of the PEPPs, in order to allow the PEPP saver to select from different investment options and other options provided for by the PEPP, including where that selection may be undertaken at different points in time, or changed in the future.
EIOPA shall submit those draft regulatory technical standards to the Commission by 15 August 2020.
Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
Marketing materials
Marketing materials that contain specific information relating to the PEPP shall not include any statement that contradicts the information contained in the PEPP KID or diminishes the significance of the PEPP KID. Marketing materials shall indicate that a PEPP KID is available and supply information on how and where to obtain it, including the PEPP provider’s website.
Revision of the PEPP KID
1. The PEPP provider shall review the information contained in the PEPP KID at least annually and shall promptly revise the document where the review indicates that changes need to be made. The revised version shall be made available promptly.
2. In order to ensure consistent application of this Article, EIOPA shall, after consulting the other ESAs and after conducting consumer testing and industry testing, develop draft regulatory technical standards specifying the conditions under which the PEPP KID shall be reviewed and revised.
EIOPA shall submit those draft regulatory technical standards to the Commission by 15 August 2020.
Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
Civil liabilities
1. The PEPP provider shall not incur civil liability solely on the basis of the PEPP KID, including any translation thereof, unless it is misleading, inaccurate or inconsistent with the relevant parts of legally binding pre-contractual and contractual documents or with the requirements laid down in Article 28.
2. A PEPP saver who demonstrates loss resulting from reliance on a PEPP KID under the circumstances referred to in paragraph 1, when concluding a PEPP contract for which that PEPP KID was produced, may claim damages from the PEPP provider for that loss in accordance with national law.
3. Elements such as ‘loss’ or ‘damages’ as referred to in paragraph 2 which are not defined shall be interpreted and applied in accordance with the applicable national law as determined by the relevant rules of private international law.
4. This Article does not exclude further civil liability claims in accordance with national law.
5. The obligations under this Article shall not be limited or waived by contractual clauses.
PEPP contracts which cover biometric risks
Where the PEPP KID concerns a PEPP contract covering biometric risks, the PEPP provider’s obligations under this section shall be only towards the PEPP saver.
Provision of the PEPP KID
1. A PEPP provider or PEPP distributor shall provide prospective PEPP savers with all the PEPP KIDs drawn up in accordance with Article 26 when advising on, or offering for sale, a PEPP, in good time before those PEPP savers are bound by any PEPP contract or offer relating to that PEPP contract.
2. A PEPP provider or PEPP distributor may satisfy the requirements of paragraph 1 by providing the PEPP KID to a natural person with written authority to make investment decisions on behalf of the PEPP saver in respect of transactions concluded under that written authority.
3. In order to ensure consistent application of this Article, EIOPA shall, after having consulted the other ESAs where appropriate, develop draft regulatory technical standards specifying the conditions for fulfilling the requirement to provide the PEPP KID as laid down in paragraph 1.
EIOPA shall submit those draft regulatory technical standards to the Commission by 15 August 2020.
Power is delegated to the Commission to supplement this Regulation by adopting the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1094/2010.
