PPI stands for premium pension institution. It first became possible to establish a PPI once the Premium Pension Institution Introduction Bill had been passed by the Dutch Senate. It was signed into law on 1 January 2011. A PPI is set up to administrate collective defined contribution pension schemes. Such schemes are characterised by the fact that the ultimate pension benefit will depend on the performance of the investments. A PPI pension is part of the second pension pillar (the state pension represents the first pillar and voluntary pension savings the third pillar).
In the future, the PPI will make it possible for businesses to administrate pension schemes across national borders. Businesses with establishments in multiple countries will therefore be able to centralise and optimise the administration of their pension schemes, and reduce the associated costs.