30 billion can come from pension funds and insurance companies to the real economy

'In this context,' Plattner concludes, 'we need an overall revision of the tax regime applicable to complementary pensions and life policies, inspired by the European Eet model (Exemption of Contributions - Exemption of Returns - Taxation of Benefits). A model that, unlike the current Italian set-up (Ett), incentivises pension savings and maximises their allocative effectiveness to the benefit of the national economy'.

Increasing the annual contribution deductibility limit. Today, the deductibility limit is EUR 5,164.57. A first incentive could be the deductibility of the entire contribution. Alternatively, there could be deductibility thresholds for members depending on their age or taxable income, favouring in particular young people and the self-employed. Or more favourable tax regimes during the first years of contributions, for those who join before the age of 30/35, increasing deductibility in the first 10-15 years of contributions.

Deductibility of contributed severance pay (Trf). Currently, severance pay (Trf) contributed to pension funds does not enjoy any tax benefit. An absolute or partial deductibility of the paid Trf could be envisaged, so as to provide an incentive for the conferral of the sums set aside. The aim is to make the Tfr in the pension fund a more attractive option for workers, offering concrete advantages and facilitating the process of joining a spare pension offered by the so-called second pension pillar.

Total tax exemption of returns from investments in listed SMEs. Today the exemption applies only to 10% of the assets of the supplementary pension form with the obligation to respect certain constraints in terms of investments in venture capital funds. The incentive should be an absolute tax exemption for all returns from investments in companies listed on Ftse Italia Mid Cap, Small Cap, Growth and Star, without any limitation with respect to assets.

Reduction of taxes on pension benefits for long-term membership. Taxes on benefits are reduced from 15% to 9% after 35 years of participation. Further rate reductions could be envisaged up to total exemption after 30 years. Same incentives also for lifecycle or target-date funds. In addition, members who maintain a default-managed strategy for at least 10 to 15 years could be provided with an annual tax credit applicable to future payouts.

Tax exemption for converting the pension position into an annuity. For those who convert the accumulated position into an annuity for life, a portion of the annuity paid out is tax exempt (a portion equal to 20-30% of the annual annuity) or a premium (a tax credit, with a benefit proportional to the length of contribution) or total exemption for a portion of the annuity could be envisaged for those who opt for an annuity with a guaranteed duration for a certain number of years (e.g. 20 years).

Incentives to involve the employer. Tax credit for companies that adopt auto-enrolment in pension funds, with the possibility for the employee to opt-out. A system already successfully adopted in several countries such as the UK. For example, a tax credit of 30 per cent of contributions for the first 3 years of membership and 20 per cent for the next 2 years with a ceiling of EUR 1,000 per employee in the first 5 years..

INSURANCE POLICIES

Tax deductions for premiums paid in life insurance policies that invest in listed SMEs. Today, premiums paid for Branch I and III life insurance policies do not benefit from significant tax relief, with the exception of the 19% deduction of up to EUR 530 per year for certain death or disability policies. A deduction up to an annual ceiling (e.g. EUR 10,000) could be introduced for premiums paid in life policies that invest at least a portion of their portfolio (e.g. 5% for Branch I or 20% for Branch III) in listed or quoted SMEs.

Tax exemption on returns of life insurance policies investing in listed SMEs. Life insurance policies with a financial component are subject to taxation on returns of 26 per cent, reduced to 12.5 per cent for investments in government bonds.

In order to incentivise the allocation of resources to SMEs, a subsidised rate (e.g. 12.5%) could be introduced on returns generated by investments in listed SMEs held for at least five years within a life insurance policy.

Tax exemption on capital gains for stable investments in listed SMEs. Today capital gains realised within life insurance policies are taxed at the time of redemption. In order to reward long-term holding, capital gains from investments in SMEs could be fully or partially exempt, provided that: the investment is held for at least 5 years (12.5%) or more than 10 years (5%) or more than 15 years (0%). The target SMEs are companies listed on Ftse Italia Mid Cap, Small Cap, Growth and Star.

Benefits for investors in life insurance policies with investments in listed SMEs. In order to make these pension and insurance instruments more attractive, the following could be envisaged: 1) greater tax relief on partial surrenders for those who maintain the investment in listed SMEs for at least 10 years; 2) the possibility of converting the policy into a life annuity with a lower tax rate if the policy has been active for more than 15/20 years.