Conditions related to the decumulation phase
1. The conditions related to the decumulation phase and the out-payments of the national sub-accounts shall be determined by Member States unless they are specified in this Regulation.
2. Such conditions may include in particular the setting of the minimum age for the start of the decumulation phase, of a maximum period before reaching the retirement age for joining a PEPP, as well as conditions for redemption before the minimum age for the start of the decumulation phase, in particular in case of particular hardship.
Forms of out-payments
1. PEPP providers shall make available to PEPP savers one or more of the following forms of out-payments:
(a)
annuities;
(b)
lump sum;
(c)
drawdown payments;
(d)
combinations of the above forms.
2. PEPP savers shall choose the form of out-payments for the decumulation phase when they conclude a PEPP contract and when they request an opening of a new sub-account. The form of out-payments may differ from sub-account to sub-account.
3. Without prejudice to paragraph 1 of this Article or to Article 57 or 59, Member States may adopt measures to privilege particular forms of out-payments. Such measures may include quantitative limits on lump sum payments to further encourage the other forms of out-payments referred to in paragraph 1 of this Article. Such quantitative limits shall only apply to out-payments corresponding to the capital accumulated in PEPP sub-accounts linked to Member States whose national law provides for quantitative limits on lump sum payments.
4. Member States may specify conditions under which advantages and incentives granted shall be repaid to them.
Modifications of the forms of out-payments
1. If the PEPP provider provides different forms of out-payments, the PEPP saver shall be allowed to modify the form of out-payments of each opened sub-account:
(a)
one year before the start of the decumulation phase;
(b)
at the start of the decumulation phase;
(c)
at the moment of switching.
The modification of the form of out-payment shall be free of charge for the PEPP saver.
2. Upon receipt of a PEPP saver’s request to modify his or her form of out-payments, the PEPP provider shall provide the PEPP saver with information in a clear and understandable format about the financial implications of such change on the PEPP saver or PEPP beneficiary, in particular as regards any impact on the national incentives that might apply to the existing sub-accounts of the PEPP saver’s PEPP.
Retirement planning and advice on out-payments
1. For the Basic PEPP, at the start of the decumulation phase, the PEPP provider shall offer the PEPP saver personal retirement planning on the sustainable use of the capital accumulated in the PEPP sub-accounts, taking into account at least:
(a)
the value of the capital accumulated in the PEPP sub-accounts;
(b)
the total amount of other accrued retirement entitlements; and
(c)
the long-term retirement-related demands and needs of the PEPP saver.
2. The retirement planning referred to in paragraph 1 shall include a personal recommendation to the PEPP saver on his or her optimal form of out-payments unless only one form of out-payments is provided. If a lump-sum payment is not in line with the retirement-related needs of the PEPP saver, the advice shall be accompanied by a warning to that end.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
