Public sector's first supplementary pension fund set up in education

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In January 2001, an agreement was signed establishing a supplementary occupational pension fund for school workers - the first such fund to be set up in the Italian public sector. The 1 million workers in schools (plus those in other linked educational sectors) will be able to join the fund on a voluntary basis.

On 24 January 2001, an agreement to establish a supplementary occupational pension fund for workers in the school sector was signed by the Aran public sector employers' bargaining agency, the school workers' trade unions affiliated to the Cgil, Cisl and Uil confederations and the autonomous unions Confsal/Snals, Cida-Anp and Gilda/Unams. The fund is the first to be established in the Italian public sector, which employs a total of 3.5 million workers. Supplementary pension schemes, which provide additional cover on top of the state system, have been developed in the private sector since the late 1990s (IT9806228F)

The agreement applies to all workers employed in state schools (about 1 million workers) and other related educational activities (such as private schools and vocational training institutes). For the latter groups, specific agreements on the issue will be necessary during the next renegotiation of their national collective agreements.

The accord provides for the establishment of a fund which workers may join on a voluntary basis. Those who decide to join will pay a contribution equal to 1% of their annual pay, with the employer (the public education authorities) matching this with a further 1%. The contributions must also be paid during sickness absence or maternity leave. Workers are free to make additional contributions, but this will not imply a matching employer's contribution.

The contributions will be collected in a fund regulated by statute and managed by a board of directors, made up of 18 members, half representing members of the fund and half representing the public administration. The members will elect their representatives on the basis of lists presented by trade union organisations or associations of workers. The fund will be managed by a finance company chosen by the board of directors. The board will give the company general guidelines on how to manage the fund, including indications regarding investments, rate of return and differentiated investment risks.

School workers employed on fixed-term contracts lasting over three months will also be able to adhere to the fund. This means that workers substituting for absent workers will be able to benefit from supplementary pensions.

The public education authorities have allocated ITL 100 billion (EUR 516,000) to launch the fund and to encourage workers to join. The authorities will thus make a pension contribution equal to 2% of the workers' annual pay for all those who join the fund during the first year of operation, falling to 1.5% during the second year and 1% thereafter (workers' contributions remain at 1% throughout).

The fund will provide both old-age and "seniority" pensions. Old-age pensions are payable when the worker reaches the statutory pensionable age, while seniority pensions are paid to workers who have not reached pensionable age but who has contributed to the fund for at least 15 years. In order to encourage older workers to adhere to the fund -ie those workers who will retire within the next 15 years - it has been decided that these workers may benefit from the seniority pension after only five years of contributions.

Workers may have their supplementary pension paid as a life annuity or a lump sum. In the event of death, workers' heirs will be the beneficiaries of their pension entitlement.

Lia Ghisani, the Cisl confederal secretary for the public sector, estimates that about 55%-60% of school workers with less than 18 years's service will join the fund. Cgil scuola declared in a press release that "the agreement is extremely important for all school workers and paves the way for the extension of supplementary pension funds to the rest of the public sector."