Pensions, Inps: 3 more months to leave work with increased life expectancy (but government decides)

ISTAT data confirm preliminary estimates of a recovery in life expectancy at age 65 to a level of 21.2 years. This value is consistent with the forecast of a three-month increase in the requirements for old age and early retirement pensions from 2027. This was stated by Inps representatives at a hearing on demographic transition. For the increase, a decree of the Ministry of the Economy is needed by 2025. 'There is therefore a time margin for intervention,' they say, 'should the legislator decide, as has happened in the past, to sterilise increases in the requirements.

Public spending on pensions will reach 15.3% of GDP in 2025 at 289.35 billion. In the year the number of pensions is at 76.4 per cent of the employed. This was stated by representatives of the Inps in a hearing on demographic transition, explaining that expenditure in relation to GDP will still grow to 17.1% in 2040.Thereafter, the ratio of pension expenditure to GDP is expected to gradually decrease to 16% in 2050 and 14.1% in 2060, 'remaining rather stable for the following decade'.

"The pension system still needs to be monitored over the next 30 years. However, there is no reason to believe that it will not be able to guarantee the benefits for which it is intended'. This was stated in the memorandum presented today by the INPS at a hearing in Parliament on demographic transition. 'We must in any case be vigilant,' it reads, 'and implement adequate public policies to alleviate the impact of the current demographic transition on the future of pensions. The equilibrium of the pension system based on a pure pay-as-you-go financing system is ensured not only by the containment of pension expenditure, but also by the adequate level of workers' contribution income'. "After thirty years of reforms aimed at containing pension spending," it reads, "it is necessary to work on increasing the contribution base by increasing the number of contributors on the one hand, and by ensuring adequate wages/income for contributors on the other.

'In order to ensure the continuation of the balance,' explain the Inps representatives, 'it is necessary to aim to feed the flow of contributions, thus turning our attention to companies and, in particular, to workers, in order to increase their numbers and improve the continuity of employment positions. Similarly, it is possible to intervene on the output side without intervening further on raising the requirements for retirement'. On the income side, according to Inps, 'it is fundamental to incentivise the participation of women and young people in the labour market, two categories that historically record rather low participation rates, intervening to close the gender gap and encourage their greater inclusion'. In particular, Inps points out that women are on average strongly impacted by the birth of a child on their annual wages with a -16% in the year immediately following the event but also on the probability of exiting the labour market in the year of birth (+18%) (the so-called child penalty). It is necessary to strengthen, he explains, the measures introduced over the years to improve the reconciliation of family life and work. As far as financial outlays are concerned, the INPS believes 'that a slight increase in the effective retirement age, in the form of a mere option, meets the twofold objective of meeting the personal needs of workers who have significant contribution years and favouring the intergenerational transfer of skills'.