Courage but also budget is needed to relaunch pension funds

The popular sayings that you cannot have your cake and eat it at the same time, or that you cannot have your cake and eat it too, fit well with the government's intentions to incentivise, yes, the development of supplementary pensions (this is good news), but without additional burdens on the state. And yet, after the worsening changes to pension funds (fp) implemented with the 2007 financial law by the Prodi government (labour minister Cesare Damiano) and with the increase in taxation by Matteo Renzi's executive in 2015, there is a real need to increase adhesions and the development of the pension culture. As a reminder, it is useful to recall by points the changes to legislative decree no. 252/2005, which should have come into force on 1 January 2007 in its entirety, but was rendered monolithic and congealed for the sole purpose of 'cashing in' on fp. Let us see by points: 1) for no reason whatsoever, the 'guarantee fund for micro and small and medium-sized enterprises' is abolished, which was included in the law after an agreement with all the social partners, Confindustria in the lead (as many as 43; a record) and which would have made it possible to finance at the Euribor rate plus 1 percentage point, all the outflows of Tfr from companies to pension funds. In practice, since the Tfr is deferred remuneration but also and above all 'internal company circulating capital' used to finance the purchase of materials, warehousing, taxes, etc., 252/05 provided that every year the employer of SMEs would go to the bank to obtain a loan of the same amount as the Tfr outflow to the fp, with a duration of 10 years and 2 years of pre-amortisation. This provision was far-sighted because even then the large banks that had incorporated most of the territorial banks gave little credit to these SMEs; a situation that was further aggravated after the Lehman Brothers crisis of 2008 with the credit crunch and even more serious today following the latest aggregations; with this guarantee a new large credit market would be opened up to the benefit of the entire system.

Result: today, only less than 10 per cent of the more than 7.2 million workers in SMEs are registered for severance pay, as opposed to more than 70 per cent in medium-sized and large companies that can easily do without severance pay; a social injustice. 2) By modifying 252/05, the Damiano text arbitrarily divided companies into less than 50 employees and more than 50 employees; for the latter, if the worker chooses to leave the severance pay in the company, it must be paid to the Inps Treasury Fund, which rarely grants advances to the detriment of workers, and in the case of liquidation due to resignation of the worker, it is the employer who pays out, offsetting the severance pay with contributions to be paid. In 10 years, almost 100 billion have been subtracted from the real economy, of which the government makes a profession of faith by providing for the Italian strategic fund (700 million), which the Inps uses for current expenditure; and the serious thing is that for all of us, the severance pay fund is a liability, a debt to workers, while for the Prodi/Damiano law it is an income (asset) and therefore any change requires a mountain of money given that the annual flow from companies to the Inps Fund is worth 6.2 billion. 3) The Inps fund engages the system; In fact, if Law 252/05 provided for several semesters of silence of consent in order to increase the financial and social security culture of Italians and develop the pension funds, it was impossible to provide for a semester of silence of consent (the last one dates back to 2007 and, moreover, was only three months old) because (this is the reasoning of the RgS) if even only 10% of workers changed their minds and wanted to pay their severance pay into the pension funds, it would be necessary to provide coverage of at least 620 million a year to cover the 'lost revenue' to the Inps; an absurdity. But if development is to be without further cost to the state, how is it to be done? And so nothing has been done for 2024 either. To exacerbate the situation, Renzi thought of it by raising the tax on returns from 11% to 20% and maintaining, the only product in Europe, the taxation of annual fp with the harmful method of tax credit that Minister Pier Carlo Padoan did not change when he introduced the Pir (individual savings plans) to which he granted not to pay tax on returns, 'for life' and for amounts up to 1.5 million euro. A metalworker, if it goes well, sets aside the tenth part and is taxed by the tax authorities.

Now the government would like to: (a) re-launch the fp leaving, however, the maximum limit of contributions at the old 10 million lire of 1999; (b) without any change to taxation; (c) without reintroducing the guarantee fund for SMEs; (d) without eliminating the Inps Fund; (e) without half-years of silence of consent because it is too costly; (f) without modifying annuities as provided for by 252/05, seen by workers as an expropriation of their accumulated mount, even knowing that more than 96% redeem in capital, thwarting the primary objective of the fp. They would like pension funds to invest more in the real economy and in the aforementioned strategic fund. But the funds must first and foremost pay pensions and what if these investments do not yield? Who would pay the pensions? If the fp funds are to be developed by bringing the ratio of fp assets to GDP to at least the OECD average, courage is needed and putting your hand in your wallet by cancelling the ineffective Prodi Damiano set-up. Today, the ratio of fp assets to GDP is about 12% compared to over 70% of the OECD average and far from 100% in northern European countries. There is still a long way to go; all that is needed is for the government and also the social partners to believe in it. The demographic transition has already begun and is unstoppable; therefore less complaining and fear and more action so as not to find ourselves tomorrow as unprepared as we are today when the great demographic acceleration is over and already slowing down, and we are still without crèches.

* President Itinerari Previdenziali