Europe is faced with an ageing population. In response to this, the European Union (EU) has introduced the Pan-European Personal Pension Product (PEPP). This is a dynamic pension product designed to ensure that citizens across different EU member states are able to maintain their quality of life after retirement.
Key Features of the PEPP
- Voluntary Participation: The PEPP is designed to be a voluntary personal pension scheme which complements existing national and occupational pension regimes, including those available locally in Ireland. It comprises the same attributes and is subject to the same tax treatment as the Personal Retirement Savings Account (PRSA).
- Standardisation and Transparency: The PEPP offers a standardised framework with transparent features and consistent regulations, allowing individuals to make informed decisions regarding their retirement savings. For Ireland, the Central Bank of Ireland is tasked with authorising PEPP providers and regulating these products.
- Portability: The PEPP allows members to continue contributing to their scheme anywhere within the EU, even when moving between countries.
- Flexibility: Members can continue contributing towards their PEPP regardless of their employment status, whether this status is part-time or full-time employee, self-employed, unemployed or student.
Reporting the PEPP via Payroll
SimplePay is busy implementing changes to include a new Pension option to cater for the PEPP. By January 2024, SimplePay users will be provided with dedicated functionality to report the relevant Employer and Employee PEPP contributions using additional fields.
In the interim, Revenue has instructed all payroll providers to report any PEPP contributions in the same manner as PRSA contributions. This is because the tax treatment of the PRSA and PEPP is identical.
To report PEPP contributions on SimplePay, please follow the simple guidelines provided on our help page.
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