Government introduces supplementary pension schemes
The Government has issued a decree, setting out the rules for introducing supplementary occupational pensions schemes for the first time in Italy, with the backing of the social partners.
The new decree, issued on 14 January, brings Italian pensions legislation more into line with the rest of the EU. Presenting the decision to the press, the Minister of Labour, Tiziano Treu said that "1997 will be the year in which a real supplementary social security system will begin to be set up in Italy.".
The new decree concerns the establishment of the administrative and controlling bodies of the pensions funds, and the necessary qualifications of their managers, while the methods of financing are left to negotiations between the social partners. The administrative bodies of funds set up by the social partners will be made up equally of representatives of workers and employers. The funds' resources will be entrusted to specialists for investment in the capital markets, and the prudent use of these resources could, as well as guaranteeing members' pensions, also contribute to economic development and employment growth. The funds' operations will be controlled by a special government-appointed Inspection Committee. There will be incentives for investment in pension schemes, and members will be able to benefit from tax inducements.
The introduction of occupational pensions funds was foreseen in the law reforming the pensions system passed by the Italian Parliament in June 1995, which outlined the rules to which the funds must adhere. Schemes, membership of which is voluntary, must be established by agreements between the social partners, or promoted by the trade association for the self-employed. "Open-ended" funds may also be established by banks, insurance agencies, investment companies or management companies of mutual investment funds, which workers can join if they are unable to benefit from collectively-agreed funds, or if they simply prefer this option.
The most important occupational schemes so far negotiated is Fonchim, which was established in the chemical and pharmaceutical sector as part of the national collective contract in December 1995. The social partners in the industry - FULC (Federazione Unitaria dei Lavoratori Chimici, Unitary Federation of Chemical Workers' Unions, which groups the sectoral union federations affiliated to the CGIL, CISL and UIL confederations) and Federchimici (the sectoral employers' federation affiliated to Confindustria, the General Confederation of Italian Industry) - believe that Fonchim can expect some 80,000 members, since a number of workers already benefit from company funds. At present, the initial goal of 30,000 members has been reached. Fonchim is financed by workers and employers, who each make a contribution equivalent to 1.06% of annual pay, and by the use of a part of the TFR severance pay (or end-of-service allowance) fund, with the amount depending on the length of service. The TFR is a statutory scheme, whereby a sum of money is earmarked monthly and recovered by workers when they leave the company.
The new metalworking collective agreement, which has recently been signed, provides for the establishment of an occupational pensions fund in that industry.
It should be noted that the new pensions decree ran into an obstacle in early March, when the Court of Auditors failed to accept it, owing to concerns about fund administration (and especially ensuring trade union participation). The Court has asked for changes to be made, thus delaying the implementation of the decree.