1.   The information on the risk-reward profile of a PEPP, including the narrative explanations of the summary risk indicator in the section titled ‘What are the risks and what could I get in return?’ of the PEPP KID, shall be provided in a brief, clear and easily understandable manner. The information shall explain the objective and the results of the summary risk indicator to identify, in a standardised and comparable manner, different risk and reward profiles and that the summary risk indicator shall be regarded as a reference point when comparing different PEPPs’ risk-reward profiles. The PEPP provider shall clearly state that the PEPP summary risk indicator is different from and not comparable with the summary risk indicator of products falling under Regulation (EU) No 1286/2014 of the European Parliament and of the Council (4).

The information shall explain that a low risk-reward profile implies that the PEPP saver is more likely to receive a moderate retirement income, whilst a high risk-reward profile implies that the PEPP saver is more likely to receive a relatively higher or lower retirement income than lower risk-reward profiles. Narrative explanations shall identify the limitations of the summary risk indicator, including where relevant, the dependence of the risk-reward profile on the actual development of the investments, the saving period and the effectiveness of the applied risk-mitigation technique.

2.   The required information, according to point (ii) of Article 28(3)(d) of Regulation (EU) 2019/1238 of the possible maximum loss of the invested capital in the section titled ‘What are the risks and what could I get in return?’, of the PEPP KID shall be complemented by information on the standardised, stochastically determined, accumulated capital at decumulation under a stressed scenario, equal to the fifth percentile of the distribution.

3.   In the section titled ‘What are the risks and what could I get in return?’ of the PEPP KID, information on the standardised performance scenarios of favourable, best estimate and unfavourable, shall be presented in relation to the projected PEPP retirement benefits based on the following elements:

4.   Where applicable, the information on the conditions for returns to PEPP savers or built-in performance caps in the section titled ‘What is this product?’ of the PEPP KID shall make reference to the design and the allocation mechanisms of the applied risk-mitigation techniques.

5.   The inputs, assumptions and methodologies for the information referred to in paragraphs 1, 2 and 3 shall be in line with Annex III.

6.   Where information is presented in an electronic format with layering of information, the first layer shall contain at least the summary risk indicator and the projected PEPP retirement benefits of four generic PEPP savers, whereas the nominal projected benefits may be provided in the additional layers of detail. Other information may be provided in the additional layers of detail.