The Pan-European Individual Pension Product (PEP) has been in force since September 26, when the Act of July 7, 2023 entered into force. In short and greatly simplified, it is possible to accumulate additional funds on a sub-account, which can be withdrawn after the end of professional activity and meeting several criteria. In this way, many people will have the opportunity to improve their home budget while receiving the benefit.
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What is the European pension? This is a new way to save
Due to its great similarity to the Individual Retirement Account, the European Pension Account is also colloquially called the “European IKE”. The difference is that the pan-European version allows you to transfer your account and savings to another European Union country. However, this is not the end of the advantages, because in addition, after meeting additional conditions, the withdrawal of savings will be exempt from the 19% capital gains tax, i.e. the so-called Belka tax.
A pan-European individual pension product, or PEPP. What else is worth knowing?
The annual limit for PEPP payments is three times the average forecast monthly salary in the national economy for the entire year. For example, in Poland in 2023 it is PLN 20,805. It is worth knowing that the limit on costs and fees related to maintaining a subaccount will be 1%. accumulated capital. Anyone from 15 to 55 years of age can benefit from the program.
How can I withdraw money from the PEPP? 3 conditions must be met
According to , the payment of saved funds accumulated under the PEPP will be possible after three conditions are met:
- after reaching the age of 60 or acquiring pension rights and reaching the age of 55,
- making payments for at least 5 years,
- making more than half of the value of payments no later than 5 years before the date of submitting the withdrawal application.
It is worth knowing that the money can be withdrawn in installments or once. Importantly, if a selected provider or saver is liquidated, they can be transferred to another PEPP account. Despite many advantages, the program has one drawback. In Poland, no one offers services in this area yet. Perhaps such an option will soon appear in the Slovak company Finax, but their application has not yet been considered. So all you have to do is be patient.
Source: Gazeta
Bruce is a talented author and journalist with a passion for entertainment . He currently works as a writer at the 247 News Agency, where he has established himself as a respected voice in the industry.
