New Italian government suggests pension changes
13 June 2008

Written by Sophie Baker

Following the appointment of the new Italian government, welfare minister, Maurizio Sacconi, has announced plans for the Italian pension system which may result in conflict with the country’s trade unions over the coming months.

Sacconi appears to have made additions to proposals by the former Prodi-led government, which planned to phase in an increase in retirement ages and number of pensionable years held over several years, from 57 to 60 in 2010.
Sacconi has reportedly branded this “an onerous mistake”, although it does not seem that this idea will be scrapped.

Several Italian consultants have spoken to European Pensions about what the coming months may hold for the Italian pension system, and Italian principal HR consultant at Hewitt, Katia Riva, commented: “The welfare minister just made general observations on a few potential future changes, but there’s nothing black on white yet.”

Managing principal at Towers Perrin Italy, Maurizio Valsecchi, agreed with Riva, explaining that according to the most recent news, a new reform is not expected, rather a “correction of what has been decided by the former Government.”

Valsecchi said that the main changes should be a set date for the new rules about coefficients of transformation, and a reduction of the workers included in the group of ‘lavori usuranti, or exhausting works. This group will be exempt from “the new and less favourable rules about retirement age”.

In addition, the Government is expected to take further action to improve the development of the private pension system, such as abolishing the present irreversibility of the choice to invest their ‘Trattamento di fine Rapporto’ (TFR) or severance indemnity in a private pension, and increasing fiscal advantages of private pension products.

This final move was endorsed by Watson Wyatt Italian consultant, Livio Mocenigo, who commented: “I am very positive on one comment though that is to improve fiscal advantages for supplementary private pension solutions.”

Valsecchi added: “Finally, the new Government wants to reduce operational costs through merging some of the minor Public Bodies (not including the main ones, such as INPS and INPDAP, that in any case are likely to be involved in a cost reduction plan.”

He said that all the actions seen to be aimed to further improve the situation of the public pension system expenditure, and Sacconi is reported as saying he believes could save the government around €3.5bn.