The EU’s Regulatory Commitment to a European Harmonized Pension Product (PEPP): The Portability of Pension Rights vis-à-vis the Free Movement of Capital

Abstract

Abstract European demographic structure and age composition are currently in a state of flux—life expectancy has increased, fertility rates have dropped, and baby-boomers have reached retirement age. The implications of these changes, coupled with the fragmented market for personal pension products throughout the EU are vast and call for close scrutiny of the relationship between financial and pension markets. This article examines the current regulatory efforts aimed at creating a Pan-European Personal Pension Product (PEPP). In doing so, it pursues two primary objectives: firstly, it seeks to explain the relevance of a European harmonized pension product to the overall concept of the single market; and secondly, it aims to explore the looming regulatory challenges stemming from the portability of social and pension rights. This is done by elaborating upon established law and economics scholarship on capital markets, including the Legal Theory of Finance developed by Katharina Pistor. By assessing the costs faced by prospective pensioners against the benefits of legislative harmonization (and other policy-related alternatives), from both a normative perspective as well as a positive one, this article attempts to make a case for an effective and sustainable governance response. The article ultimately seeks to provide a well-balanced, albeit modern outlook to the regulatory endeavours that have more recently been made applicable to the EU personal pension market in virtue of the creation of the PEPP and the wide-ranging effects of such reforms on law, finance, and society.