The pan-European personal pension product represents an individual’s voluntary savings for retirement through long-term savings and investment products that are not part of supplementary pension savings.
The pan-European personal pension product is particularly interesting for its portability in the countries of the European Union. Its advantages could be appreciated primarily by mobile workers and people who plan to spend their work abroad as well as foreign workers from EU member countries working in Slovakia. The pan-European personal pension product is also a reasonable solution for self-employed people. The savings can be transfered to any EU country.
Only an adult can become a saver, but receiving a taxable income is not a condition for saving a pension through a pan-European personal pension product. This means that even an unemployed person, person on maternity or parental leave, or a student can also be a saver in such pension savings if they are able to contribute to their future pension. The contribution amount is not limited.
From January 1, 2023, the saver’s contribution to the pan-European personal pension product is a non-taxable part of the income tax base up to €180 per year in total for all forms of pension savings, i.e. for the pan-European personal pension product as well as supplementary pension savings. During the duration of pension savings, the accumulated property of the saver is not taxed. Benefits paid from a pan-European personal pension product are treated as income from capital assets and taxed at a rate of 19%. The basis of the tax is the benefit reduced by the contributions paid.
The saver’s invested funds are managed by a pan-European personal pension savings provider, which, after meeting the specified conditions, can be:
The condition is the registration of the pan-European personal pension product provider in the central public register maintained by the European Authority for Insurance and Occupational Pensions (EIOPA).
The following benefits can be paid from the pan-European personal pension product:
The pension is paid in the form of a lifetime pension or a temporary pension.
The lifetime pension is paid during the lifetime of the beneficiary of the pan-European personal pension product until the beneficiary’s death.
The temporary pension is paid for at least five years from the entire assets of the saver of the pan-European personal pension product.
The first payment of a lifetime pension or a temporary pension can be paid at most in the amount of 25% of the value of the assets of the saver of the pan-European personal pension account.
At the saver’s request, the provider will pay the saver a one-time settlement in the amount requested by the saver, if the value of the saver’s assets of the pan-European personal pension product is lower than four times the average monthly wage in the economy of the Slovak Republic for the two previous years, or five years have passed since the saver reached the age necessary to be entitled to an old-age pension according to a special regulation.
Conditions for payment of pension, program withdrawal or one-time settlement
To a saver who does not meet the conditions for payment of a benefit from a pan-European personal pension product, the provider will pay an early withdrawal at his request, in case: