Representatives of the EU’s 28 members have paved the way for the introduction of a pan-European private pension scheme after bloc’s ambassadors approved a previous agreement with the European Parliament.

Individuals who want to save for their retirement should have more choice in the future, which is what the Pan-European Pension Product (PEPP), an EU pension plan framework, aims to do by complementing existing statutory, occupational, and national private products.

According to the EU executive, only 27% of 25- to 59-year-olds in Europe now have private pensions. The European market for private retirement plans and insurance is fragmented with a number of different regulations and offerings, or lack thereof, as some countries have virtually no available products on the market.

In the future, the European Commission’s proposal says that insurance companies, banks, and asset managers should be able to offer new products. Among other things, European residents should have the right to keep their contract when moving to another EU country.

The main purposes of the recommendation is to encourage the members of the bloc to grant the same tax treatment to PEPPs as are currently granted to similar existing national products.