Decree 168/2023 on the Regulation of Certain Issues Arising from the Application of Regulation (EU) 2019/1238

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O.J. of the EU, Part III(I) No. 5802, 26.5.2023 G.D. 168/2023

Number 168

REGULATION (EU) 2019/1238 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 20 JUNE 2019 ON THE LAUNCHING OF A PAN-EUROPEAN PERSONAL PENSION PRODUCT (PEPP)

Decree under Articles 12, 47 and 57

Preamble. Official Journal of the EU: L 198, 25.7.2019, p.1.

Short title. Interpretation. Official Journal, Third Part (I): 8.11.2020, (G.D. 420/2022)

Subject matter of the present Decree. Scope of the Decree. PEPP Sub-accounts.

For the purpose of harmonization with Articles 12, 47 and 57 of the European Union act titled "Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on the launching of a pan-European personal pension product (PEPP)".

The Minister of Finance, exercising the powers conferred upon him by Articles 12, 47 and 57 of Regulation (EU) 2019/1238, issues the following Decree:

1. This Decree shall be cited as the Regulation of Certain Issues Arising from the Application of Regulation (EU) 2019/1238 Decree of 2022.

2. (a) In this Decree, unless the context otherwise requires-

"Competent Authority" means the authority responsible for the supervision of the PEPP provider or PEPP distributor, as defined in the Notice of the Minister of Finance published in the Official Journal of the Republic;

"Regulation (EU) No. 2019/1238" means the European Union act titled "Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on the launching of a pan-European personal pension product (PEPP)";

"PEPP" means Pan-European Personal Pension Product as defined by Regulation (EU) 2019/1238;

(b) For the purposes of this Decree, terms not defined herein, unless the context otherwise requires, shall have the meaning given to them by Regulation (EU) No. 2019/1238.

(c) In this Decree and in the guidelines that the competent authorities may issue, any reference to a legislative act of the European Union, such as a Directive, Regulation or Decision, means that act as amended, modified or replaced from time to time, unless the context of this Decree otherwise requires.

(d) In this Decree and in the guidelines that the competent authorities may issue, any reference to a law or regulatory administrative act of the Republic means that law or regulatory administrative act as amended, modified or replaced from time to time, unless the context of this Decree otherwise requires.

3. The purpose of this Decree is to establish terms concerning the accumulation phase and the decumulation phase of national PEPP sub-accounts.

4. This Decree applies to all registered PEPPs in the Republic and to PEPPs with sub-accounts in the Republic.

ACCUMULATION PHASE

5. In the event that PEPP providers offer a portability service to PEPP savers, PEPP providers shall ensure that, when a new sub-account is opened in a PEPP account, it complies with the legal requirements and conditions of this Decree for the PEPP from the saver's new Member State of residence. All transactions in the PEPP account are recorded in a corresponding sub-account. Contributions paid to the sub-account and withdrawals from it may be subject to separate contractual terms.

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Age limit for the start of the accumulation phase. Restriction on the age of entry. Tax treatment of contributions. 118(I)/2002 230(I)/2002 162(I)/2003 195(I)/2004 92(I)/2005 113(I)/2006 80(I)/2007 138(I)/2007 32(I)/2009 45(I)/2009 74(I)/2009 110(I)/2009 41(I)/2010 133(I)/2010 116(I)/2011 197(I)/2011 102(I)/2012 188(I)/2012 19(I)/2013 26(I)/2013 27(I)/2013 17(I)/2014 115(I)/2014 134(I)/2014 170(I)/2014 116(I)/2015 187(I)/2015 212(I)/2015 110(I)/2016 135(I)/2016 119(I)/2017 134(I)/2017 165(I)/2018 51(I)/2018 96(I)/2018 122(I)/2018 139(I)/2018 27(I)/2019 28(I)/2019 63(I)/2019 151(I)/2019 152(I)/2019 173(I)/2019 45(I)/2020 58(I)/2020 66(I)/2020 80(I)/2020 95(I)/2020 151(I)/2020 179(I)/2020 180(I)/2020 31(I)/2021 178(I)/2021 193(I)/2021 31(I)/2022 77(I)/2022

6. The minimum age limit for the start of the accumulation phase in a PEPP is the 18th year.

7. No person may become a PEPP saver if their age is less than five (5) years from the age referred to in paragraph (1)(a) of Article 11.

8. Contributions paid to a PEPP in Cyprus are deductible from the taxable income of the PEPP saver in accordance with Article 14 of the Income Tax Law.

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89(I)/2022 101(I)/2022 112(I)/2022 121(I)/2022 122(I)/2022.

Taxation of Interest. 17(I)/2002 223(I)/2002 188(I)/2003 178(I)/2007 23(I)/2009 44(I)/2009 75(I)/2009 111(I)/2009 40(I)/2010 132(I)/2010 114(I)/2011 190(I)/2011 72(I)/2012 29(I)/2013 119(I)/2015 208(I)/2015 209(I)/2015 68(I)/2016 106(I)/2017 131(I)/2017 98(I)/2018 118(I)/2018 25(I)/2019 87(I)/2019 155(I)/2019 172(I)/2019 184(I)/2020 6(I)/2021 32(I)/2021 177(I)/2021 195(I)/2021 78(I)/2022.

9. The interest credited to approved PEPPs is taxed in the same manner as pension funds, in accordance with the provisions of paragraph 2(c)(iii) of Article 3 of the Emergency Contribution for the Defence of the Republic Law.

DECUMULATION PHASE

Retirement Ages. 59(I)/2010 114(I)/2010 126(I)/2010 2(I)/2012 37(I)/2012 170(I)/2012 193(I)/2012 106(I)/2014 194(I)/2014 176(I)/2015 1(I)/2017 52(I)/2017 115(I)/2017 132(I)/2018 126(I)/2019 194(I)/2021 88(I)/2021 101(I)/202 168(I)/2021 44(I)/2022 81(I)/2022 150(I)/2022.

10. (1) The retirement age of the PEPP saver is the pensionable age in accordance with the provisions of paragraph (1) of Article 2 of the Social Insurance Law.

(2) The early retirement age is the age from which an insured person is entitled to receive an actuarially reduced pension under the Social Insurance Law.

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CORR. O.J. Part I(I), No. 4727, 4.10.2019.

Conditions for payment of benefits. Forms of PEPP Benefits. Modifications of payment forms. Exemption from tax.

11. (1) The PEPP saver acquires the right to a pension benefit when the following conditions are met:-

(a) they have reached the retirement age, or

(b) they have reached the early retirement age and choose to receive an actuarially reduced pension under Article 35A of the Social Insurance Law,

(c) they have become permanently disabled for work, in accordance with the provisions of Article 40 of the Social Insurance Law, and receive a disability pension from the Social Insurance Fund.

(2) In the event of death during the accumulation phase, the pension benefit is paid to the legal heirs of the PEPP saver.

12. (1) The provider of a PEPP has the right to pay pension benefits in the following forms:-

(a) annual annuities,

(b) lump sums,

(c) periodic withdrawals, or

(d) combinations of the above forms.

(2) The PEPP saver chooses the form of payments for the decumulation phase at the time of concluding the PEPP contract and when requesting the opening of a new sub-account. The form of payments may differ from sub-account to sub-account.

(3) In the case of the choice of payment of the pension benefit by periodic withdrawals, the PEPP saver determines the frequency of the withdrawals and the amount of each withdrawal.

(4) In the case of annual annuities, which are linked to biometric risks, coverage is provided only through cooperation with insurance companies that can cover biometric risks, in accordance with the sectoral law applicable to them. The insurance company is fully responsible for the coverage of biometric risks.

(5) In the event of the death of the PEPP saver, any credit balance of their account at the date of their death is paid to their legal heirs. In the event that tax liabilities of the deceased arise, the PEPP retains the right to charge administrative expenses, if justified, for any administrative acts with the Tax Department.

13. (1) If the PEPP provider offers various forms of payment, the PEPP saver has the right to choose upon registration and to modify the form of payment of each open sub-account:

(a) one year before the start of the decumulation phase,

(b) at the start of the decumulation phase,

(c) at the time of changing PEPP.

(2) The modification of the payment form does not entail financial burden for the PEPP saver.

14. PEPP lump sums are included in the cases of exemption from income tax in accordance with paragraph (11) of Article 8 of the Income Tax Law.

ADONIS CHRISTOFI

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