Italy’s largest trade union confederation, CGIL, has criticised government proposals to use severance pay to help workers qualify for early retirement at 64 (TFR), warning that thresholds are now so high that flexibility has become a “mirage” for most Italians.

In an analysis published on 17 September, the union argued that since the Meloni government took office, the early retirement threshold in the contributory system has increased by more than €500 per month.

It warned that, at the current rate, the minimum pension requirement, which stood at around €1,309 in 2022, will reach €1,811.78 by 2030.

CGIL estimates that meeting this increase alone requires over €128,000 in additional contributions, equivalent to nearly €389,000 in salary.

“With medium or low wages, the threshold is unattainable, even after 40 years of contributions and the use of severance pay,” said CGIL confederal secretary, Lara Ghiglione.

The union’s social security office ran simulations showing that only those on high salaries or with uninterrupted long careers could reach the thresholds.

A worker earning €8,000 annually would accrue a pension of just €505 per month after 40 years, far short of the €1,616 required in 2025.

Meanwhile, someone on €20,000 would reach €1,263 monthly, still well below the requirement.

Even with the average private sector wage (€23,700), after 40 years the projected pension is €1,496, almost €320 below the 2025 requirement, and more than €300 behind what will be needed in 2030.

Notably, the analysis also tested the impact of including TFR savings.

Though this yields some improvement, it was found that in most scenarios, workers still fail to meet the threshold, with only those on higher incomes and with full forty-year careers benefiting.

Ghiglione argued that TFR is “deferred wages, an integral part of remuneration," and warned that using it in this way means undermining certain rights without solving the issue.

She noted the government had promised to repeal the 2011 Fornero reform and restore retirement flexibility, but instead has made thresholds stricter.

“Instead of eliminating impossible thresholds, it has raised them, and now it would like to find solutions,” she said.

“We will continue to fight for a true pension reform that ensures fairness, social justice, and a dignified pension for all, building a guaranteed pension for the youngest,” added Ghiglione.

Echoing her concerns, CGIL head of social security policy, Ezio Cigna, warned that the current framework creates a "serious problem" of intergenerational and social equity by effectively locking younger and lower-paid workers out of early retirement options.

The debate arises as reports suggest that the forthcoming pension reforms, scheduled for 2026, may tighten conditions further, despite the limited resources available for new measures.

Meanwhile, Italy’s Pension Funds Supervisory Commission (COVIP) has called for stronger powers and the creation of a pension arbitrator in its 2024 annual report.

The Italian pensions regulator raised concerns that the current system is “very complex and fragmented” and therefore should be “simplified and rationalised”.

---