Agefi Luxembourg - décembre 2024

Décembre 2024 33 AGEFI Luxembourg Fonds d’investissement ING Luxembourg oriente ses clients retail vers BGLBNPParibas C omme annoncé enmai der- nier, et suite à une analyse dumarché luxembourgeois, INGa décidé de recentrer ses acti- vités deRetail Banking sur des ser- vices financiers personnalisés et spécialisés à long terme. ING continue également d’élargir son offre dédiée auWholesale Banking pour les grandes entreprises, les clients institutionnels et les fonds d’investissement. Afin de faciliter cette transition, ING et BGL BNP Paribas ont conclu un accord afinde proposer une offre exclusive à en- viron18.000 clients particuliersd’INGqui recherchentunesolutionbancairealterna- tive. Cette offre comprend un processus d’ouverture de compte simple ainsi que desconditionsspéciales.INGestconvain- cuequeBGLBNPParibasestlepartenaire de confiance idéal pour accompagner les clients dans leurs opérations bancaires courantes,grâceàsalargegammedepro- duitsetservicesainsiqu’àsessolutionsdi- gitales innovantes qui enrichissent l’expérience client. Les clientsd’INGn’ont rienà fairepour le moment. Les clients concernés par cet ac- cord seront contactés par ING au cours des prochainsmois et jusqu’à l’été 2025 et serontinformésdesdémarchesàeffectuer pourbénéficierdel’offredeBGLBNPPa- ribas.Durantcettepériodetransitoire,ING continuera à servir ces clients. Michael Burch, CEO d’ING au Luxem- bourg, a déclaré : «Nous sommes ravis d’avoirtrouvé,avecBGLBNPParibas,une alternative attractive à proposer à nos clientsparticulierspourleursbesoinsban- caires au quotidien. Nous sommes convaincusqueBGLBNPParibasdispose d’une offre de produits et services qui ré- pond aux attentes de nos clients. Nous continuerons à offrir des services person- nalisés et spécialisés ànos clients Personal etPrivateBanking,ainsiqu’auxclientsné- cessitantdesinvestissementsàlongterme. Nousrestonsparailleurslecentred’exper- tiseglobal dugroupe INGpour lagestion defonds,etrenforçonsencorenosservices dédiés à nos clientsWholesale Banking». Béatrice Belorgey, présidente duComité exécutif de BGLBNPParibas et Respon- sable des entités du Groupe BNP Pari- bas au Luxembourg a affirmé : «Je tiens à remercier les équipes d’INGpour leur engagement et la qualité du partenariat que nous annonçons aujourd’hui». «Les équipes de BGL BNP Paribas sont d’ores et déjà mobilisées pour assurer une transition en douceur pour les clients d’ING Luxembourg concernés, qui bénéficieront de l’ensemble des ser- vices du Groupe BGL BNP Paribas». L’accord de référencement conclu entre ING et BGL BNP Paribas sera exécuté conformément à la législation réglemen- taire en vigueur et dans le seul intérêt des clients et autres parties prenantes. ByDr. SebastiaanNielsHOOGHIEMSTRA * R egulation (EU) 2019/1238 (“PEPP 1.0”)was adopted in 2019 and is applicable since 22March 2022. Till now, the uptake of Pan-European PensionProducts (“PEPPs”) is disappoin- ting. EIOPApublished a Staff Paper on 11 September 2024 (the “EIOPAFeedback”) in which it published its preliminary views with respect to the upcoming re- viewof the PEPP 1.0 in 2027. This contributionprovides an overviewof the recommenda- tions in the EIOPAFeedback and reflects on these froma fund/assetmanager’s perspective. Background: The Limited Success of PEPP 1.0 Supply-side Factors On the “supply side”, indeed, PEPP 1.0was thought ofasasimpleandlong-termEuropeansavingsprod- uctthatwouldbeallowedtobeofferedbytraditional players,suchasinsurancecompaniesand(voluntary) pensionfunds,aswellasnon-traditionalplayers,such as,inparticular,fund/assetmanagers.Infact,mostin- novationunder a viable PEPP1.0wouldbe expected from the latter, as insurance companies and (volun- tary)pensionfundsmighthaveconcernswithrespect toproductcannibalization(i.e.acheaper“competitor” product). Fund/asset managers have so far failed to step inbecause of a couple of reasons: a) 1%Costs andFeesCap&Inherent Expenses One of the most mentioned reasons for fund/asset managers not stepping in under PEPP 1.0 is the so- calledcostsandfeescapof1%oftheaccumulatedcap- ital per year in relation to the “Basic” investment option of a PEPP (not to other investment options). The fee cap is, froma comparative perspective (Aus- tralia,UKandUS),notlow.However,inthe“start-up phase”, the EIOPA Feedback notes that the fee cap limits fund/asset manager’s ability to offer PEPPs given initial expenses and lack of scale. Furthermore, itistobenotedthatthePEPPhas“inherentexpenses”, as it involves twomandatory advicemoments (prior tothefirstinvestmentandpriortothepay-outphase) and it also involves complex investment strategies (cost of guarantees and risk-mitigation techniques). b)AdministrativeBurden PEPP1.0requiresalotofspecificadministration,par- ticularly in managing sub-accounts across various Member States with differing accumulation and de- cumulationrulesandheterogeneoustaxregimes.The requirementforPEPPproviderstooffernationalsub- accounts for, at least, twoMember States fromMarch 2025may further exacerbate the situation. Demand-side Factors There are alsodemand-side factors that play a role in the limited uptake of PEPPs. According to EIOPA’s Feedback, there is a lowpensionparticipation, due to the current cost of living crisis. Furthermore, the EIOPA Feedback reflects that 76% of all Europeans have not heard about the PEPP. This reflects an “awareness” problem. LimitedActions byMember States The limiteduptake of PEPPs is alsodue to the lack of effortsonthesideofMemberStates.VariousMember States have implemented the PEPP national provi- sions late and some even have not yet transposed PEPP1.0atall.Inaddition,researchpriortotheadop- tion of PEPP 1.0 has shown that Member States pre- dominantlyapplyEETsystemstothirdpillarpension products. However, many Member States do not applythesame(favourable)taxtreatmenttothePEPP as to other thirdpillar pensionproducts, despite the Recommendation by the EuropeanCommission todo so. EIOPA’s Recommendations Supply-side Factors The EIOPA Feedback contains five rec- ommendations to improve the “sup- ply” of PEPPs: a) Combine Occupational and Personal PEPP in a Single PensionProduct PEPPcouldbecomea sec- ondand thirdpillar prod- uct rather than just a third pillar product. In line with the success of various prod- ucts in France and New Zealand, allowing tax-efficient employer contri- butions alongside personal contributions would make the PEPP a second and third pillar pension product, and this could lead to a greater demand. b) Value forMoney for PEPP Due to the difficulty to determine a costs cap that would suit both providers and savers, the EIOPA Feedback recommends, in line with the European “Retail Investment Strategy”, to focus on a “value for money” concept for PEPPs. Thiswould not focus on an absolute level of costs and this, in the short-term, couldhelpnewplayers,suchasasset/fundmanagers to enter themarket. c) PEPP label forNational Products The EIOPA Feedback recommends allowing each Member State to develop local PEPPs and market them domestically as PEPP-labelled products, pro- vide that they adhere to a set of EU-wide common rules under EIOPA’s oversight. d) ReduceAdministrativeBurden To reduce the administrative burden, the EIOPA Feedback recommends allowing PEPP providers to voluntarily offer national sub-accounts for a given PEPP,ratherthanmakingitcompulsory,couldattract more providers. This would make the cross-border feature of the PEPPoptional. e) PEPP’s adoption: Transfer of Accumulated Ac- counts fromNational PPPs toPEPP In order to ensure mass adoption, the EIOPA Feed- back recommends allowing the transfer of accumu- latedamounts fromother personal pensionproducts (“ PPPs ”) into the PEPP. This requires reconsidering the PEPP’s structure and design, its interaction with existingproducts, and ensuring tax efficiency. Demand-side Factors a) Introduce auto-enrolment in the PEPP In terms of improving demand-side factors, the EIOPAFeedbackconsidertheintroductionofanauto- enrolment system in a PEPP at the EU level. EIOPA considersthatimplementationofsuchasystemisfea- siblefromtechnological,administrative,legal,andfis- cal perspectives and that there are various examples acrosstheglobeconfirmingthepositiveimpactofthis measure (e.g., Superannuation in Australia and the UKauto-enrolment system). b) Leverage Pension Tracking Systems for PEPP adoption EU savers often have a variety of retirement entitle- ments coming fromdifferent sources – state, occupa- tionalandpersonal.Providingsaverswithtransparent andeasilyaccessibleinformationonallretirementen- titlementscansupportlong-termsavingsassaversare able tobetterplan for retirement, thus contributing to closing the pension gap. Pension monitoring tools suchasPensionTrackingSystems(“PTSs”)areessen- tial in achieving this. The subsequent challenge is to encourage citizens toconsult aPensionTrackingSys- tem, where available. PossibleNational andEU-wideMeasures a) Grant the PEPP the same Tax Treatment as Na- tional PPPs The EIOPA Feedback recommends that all Member States grant the same tax treatment as national PPPs. ThiswouldcontributetodevelopingagenuineEUin- ternalmarketforoccupationalandpersonalpensions. b) Implement National or EU-wide Pension Dashboards The EIOPA Feedback also recommends implement- ing national or EU-wide pension dashboards: a pen- sion dashboard provides an overview of pension entitlementsattheEU,national,andindividuallevels, covering all three pension pillars (i.e., state pensions, occupationalpensions,andprivatepensionschemes). Thesedashboardsenhancethemonitoringofpension developments within Member States and improve transparencyregardingtheadequacyandsustainabil- ityofnationalpensionsystems.Theyallowpublicau- thorities to identify emerging gaps and develop appropriate policy responses to address future pres- suresonpublicfinances,risksofoldagepoverty,and pensiongaps. Points overlookedby EIOPA Inmy view, EIOPA seems to overlook that the PEPP was,initially,pushedbytheassetmanagementindus- tryandthoughtofameanstoentertheEuropeanpen- sion market that is traditionally dominated by (voluntary) pension funds and insurance companies. Enabling fund/assetmanagers to competewith these players is, froma supply-side point of view, essential in making PEPP 2.0 work. For this purpose, the fol- lowing (additional) points have to be considered: a)NoNational Products Albeit the EIOPA Feedback recommends including “national products” as part of the PEPP, this is rather an ill-considered idea. The PEPP is thought of as a “wrapper product” that shares common standard- izedor“mandatory”features.Mostproductsthatare suitable for PEPPs are European products, such as AIFs, UCITS and unit-linked insurances. The PEPP framework is built upon a cocktail of intermediary regulationthattargetsPEPPprovidersthatareeligible underEUsectoriallaws(e.g.fund/assetmanagers,in- vestment firms, banks and insurance undertakings), aswell as sales regulation/disclosure that are aligned with EU sectorial laws. Under national law, mainly national products are voluntary pension products. The current sectorial approach ensures that extra product regulation to ensure EU wide investor pro- tectionforthePEPPcanbekepttoaminimum,which leads to a less complex and a less costlyproduct. b) Complex Investment Rules: Abolish them for (ThirdPillar) PEPPs ThePEPPunderPEPP2.0 is a cross-sectoral thirdpil- lar product that may be offered by, amongst others, banks, insurance companies, pension fund and fund/assetmanagers.Itleansonexistingsuitabletype of third pillar retirement products, such as AIFs, UCITS, IORPs (resembling investment funds) and unit-linked insurances. However, the excessively overregulated“investmentrules”forthe“defaultop- tion”thatinvolveeitherguaranteesorrisk-mitigation techniques) render, de facto, the PEPP to be rather a pension/insuranceproductthatisnotonlycompeting with, but alsomore complex and expensive than ex- isting third pillar pension and insurance products. Hence, for the uptake of a future “PEPP 2.0”, the in- vestment rules would really need to be made more flexibleandfullyinlinewithexistingsectorialregula- tion. For example, eligible investments could be lim- ited to AIFs (with the ELTIF, EuVECA and EuSEF label),aswellasUCITS,IORPsandunit-linkedinsur- ances. Productswill then be fully alignedwith secto- rial regulation and this would make PEPPs less complex, costly and more interesting for fund/asset managers.Themandatoryriskmitigationtechniques andguaranteescouldbeoptionaljustlikeiscurrently the case for national third pillar products. The same holdstrueforthecoverageofbiometricrisks.Inprac- tice, fund/asset managers would, for example, de- velop robo-adviceproductswithamixture ofUCITS (ETFs or not) and AIFs (with ELTIF, EuVECA or EuSEF European labels) that would benefit from a favourable tax treatment. For second pillar PEPP products, existing or slightly amended rules would bemore suitable. c)MandatoryAdvice Prior to entering into a PEPP-related contract, aswell as at the start of the decumulation phase, mandatory (costly) advice is under PEPP 1.0 required. However, sucharequirementisnotinplaceforcompetingthird pillarretirementproducts.Forexample,underELTIF 2.0 there is onlyproduct governance anda suitability test in place. This would work for PEPPs as well. To reduce costs involved with the PEPP, advice should beoptionalforPEPPsavers.AnyPEPPprovidersand distributors could, alternatively, also develop digital solutions to support PEPP savers in their journey. Outlook:Will PEPP 2.0 follow theUCITS andELTIF Footprints? It is not to be excluded that aPEPP2.0will followthe footprint of UCITS and ELTIFs. Both UCITS and ELTIFswere not that successful when they came out under their first iterations, but reflections and feed- backimprovedtheproducts.UCITSbecamea(global) success and ELTIFs are also increasingly being launched after ELTIF 2.0 took effect. What the EIOPA Feedback seems to overlook is that PEPPismainlyapotentialopportunityforfund/asset managerstostepintothe(voluntary)pensionmarket onanEUwidebasis.However, till now, PEPP1.0ac- commodatesmainlytheneedsofincumbentpension and insuranceundertakings that haveno incentive to launch third pillar “competing products” under the PEPP framework. Hence, in order to boost the third pillarpensionsmarketinEurope,themostimportant demand-sidefactoristhatMemberStates,atleast,ex- tend their national tax treatments of their third pillar products to the PEPP. From the supply side, it is es- sentialthatthePEPPbecomesamoresimpleandless expensive third pillar product, which is not more heavily regulated than existing third pillar products and offers more value, due to the above-mentioned favourable tax treatment. For that purpose, it is essential that the framework covers the needs for existing players, but also new players in the domain (i.e. fund/assetmanagers). To make that happen, PEPP 2.0 should remain to lean on existing EU sectorial regulations (e.g. AIFMD, UCITSD, IORPD, MiFID II, CRD, Solvency II & the IDD). For fund/assetmanagers toenter thisEUmar- ket, it is essential that the PEPP 1.0mandatory com- plex investment rules for the“default”optionwill be largely abolished and that the PEPP product rules will not goldplate the existing EUproducts. Only in limited instances, for example, in the case of invest- ments in AIFs, additional investment rules may be required tobe inplaceby limitingPEPP investments to ELTIFs, EuVECAs and EuSEFs only. TheEUlegislator shouldnot overlook that thePEPP is, till now, a third pillar product that leans on exist- ing EU products that already have an EU passport and, hence, PEPPs should thus offer more value with, for example, extra taxbenefits tobecomea suc- cess. In addition, the two mandatory advice mo- ments can be optional instead of mandatory, as existingproductgovernance,disclosurerules,aswell as a suitability test offer enoughprotection for PEPP savers, and these also render the product complex and costly for PEPP savers. These essentials com- bined with some other flanking changes proposed with EIOPA for sure may lead for the PEPP (as a third pillar product) to be a success. *Dr. SebastiaanHooghiemstra is an associate in the investment mana- gementpracticeofLoyens&LoeffLuxembourgandSeniorFellow/Guest Lecturer of the International Center for Financial Law & Governance at the Erasmus University Rotterdam. PEPP2.0 – Finally a Suitable (“Fund”) Product for Fund/AssetManagers?