Pension funds, what will be the fate of the 4 million members of the guaranteed lines?

More than two months after its launch in the Council of Ministers (it was on 17 October), the Manovra finally arrived in the parliamentary chambers and, after its approval in the Senate, it is ready for the final vote in the Chamber of Deputies expected by Tuesday 30 December. It has been a long gestation characterised by more than 5,700 proposed changes, and related amendments, and by close discussions between the political forces of the majority. A troubled process to arrive at a final text where, among the large number of regulatory interventions envisaged, there is a package of measures aimed at strengthening complementary pension scheme membership.

For several years now, every effort has been made to convince young people entering the world of work to use their severance pay to build up a supplementary pension, a second social security cheque that can offset the loss of income from the state pension. But so far not many have done so. The take-up of pension funds in Italy is still relatively low. According to the latest Covip data, around 9.95 million Italians are enrolled in a form of supplementary pension, representing 38.3% of the total workforce.

Now the government is trying to give a new push to the so-called spare pension, in order to provide workers with the opportunity to have a more dignified pension and, at the same time, relieve the pressure on the public system, which in the future will have to cope with an ageing population and the rising costs of public insurance.

A first small impetus was given with the increase of the tax deductibility ceiling for voluntary contributions paid to pension funds from the now anachronistic EUR 5164.57 to EUR 5300 per year. Greater flexibility in the use of pension savings has also been envisaged, with a number of clarifications with respect to the 'annuity for life' and the new option of the 'defined term annuity'. In the first case, if a premature death occurs, the remaining part of the accumulated capital remains in the fund. With the second option, one can now choose to withdraw everything within a certain time frame, but not less than 5 years.

In order to encourage young people to join pension funds, from next July there will be a tacit conferral of severance pay (silence of consent) for newly hired employees to supplementary pension funds. There will be 60 days to change one's mind. And there is the obligation for pension funds to invest the contributions of the silent ones with the life cycle mechanism, which automatically adjusts the investment profile - from aggressive to prudent - according to the age and working life horizon of each member. Until now, the rule provided for the vesting of silents in theguaranteed lines of pension funds, which have deeply disappointed expectations. Now it will be necessary to wait for the Covip instructions to understand what will happen to the guaranteed lines and, above all, to the 3.9 million Italians who are lying in these sub-funds, 30% of whom are under 40.