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Supplementary pension provision

Pepe's (Covip) proposal: a birth bonus for young people

Second Pillar, Covip President: Strengthen staff also for possible new competences. Yes to a Dispute Arbitrator. "Our all-round supervision of the funds is useful".

by Marco Rogari

Mario Pepe, presidente della Covip (la Commissione di vigilanza sui fondi pensione)

4' min read

4' min read

'A pension bonus at birth' in piggy bank format, which also looks at the education of young people and not only at their pension protection. The proposal comes from Mario Pepe, the newly-appointed president of Covip (the supervisory commission on pension funds), who says he is fully prepared for the challenge of strengthening complementary pensions. Pepe rejects the opposition's criticism of his appointment and hopes for 'a strengthening of the Authority's staff' also in view of a possible enlargement of its competences. The Covip chairman then calls for a truly all-round supervisory role for pension funds, considers the creation of 'an Arbitrator for disputes on social security matters' to be useful, and states that the proposal to activate a public guarantee for pension fund investments to support the growth of SMEs should be carefully assessed.

President, you took office in April. What is your idea of Covip for the coming years?

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The aim is to strengthen the institution. Over the years the legislator has entrusted Covip with new tasks, but the Authority's staffing levels have not been increased. I have a hard-working patrol of collaborators who, despite the reduced number of staff, manage to meet their commitments and deadlines. My first commitment will be to ask the government for more funds: the staff must be strengthened, and salaries must be brought into line with those of the staff of the other authorities, because I believe that Covip must grow and also broaden its competences to other fields.

But in this case wouldn't a different organisation of the Authority be needed?

The Authority has two important commitments. The first is to supervise pension funds, and on this side we are autonomous and we decide. And, not surprisingly, the funds are doing well. One of my ideas is to create a support structure to help small funds. Covip's second commitment is to supervise pension funds, but in this case our role is less incisive because supervision of the funds is fragmented and Covip's control is limited.

Do you think that a different type of supervision is necessary for the banks?

If Covip were also entrusted with comprehensive supervision for pension funds, we would be able to do the same positive work that we are doing with pension funds.

For funds and funds remains the knot of disputes...

We need to increase the confidence of investors and households in supplementary pensions. With this in mind, the establishment of an Arbitrator for pension disputes can be welcomed.

His appointment has been the focus of criticism from the opposition and beyond. What do you reply?

I would simply like to be able to work and achieve a number of goals even if some have already doomed me since the beginning of my term. I would simply respond with a fable from Phaedrus: 'superior stabat lupus'.

Minister Giorgetti said that strengthening supplementary pensions is a priority. What is the way forward?

Giving more strength to the so-called second pillar is definitely a priority. We have to think about what Italy will be like in 25 years. Italy will be different in numbers and in the composition of families. The demographic transition will also affect social security balances. For this reason, it would be useful to have a social security bonus at birth that can be fed by tax-deductible contributions paid by family members, even if they are not 'close', and that can be used when they reach the age of majority.

A sort of welfare piggy bank?

This would be a social security piggy bank for two purposes: strictly social security and education, for cultural enhancement. In the context of a new 'Marshall Plan' to boost the birth rate, a social security bonus at birth could be included. Upon reaching the age of 18, the bonus should also be able to be used for education, e.g. to pay for studies at a prestigious university.

Are you in favour of a new phase of silent consent for severance pay?

We have to remember that especially for SMEs the severance pay translates into a large chunk of liquidity to get by. If we take the Tfr away from companies, we have to give them something else. There are various initiatives on the table; there is the idea that, in my opinion, needs to be explored further of a public guarantee to encourage pension fund investments in SMEs.

The share of resources allocated by pension funds to investments on the domestic front remains low. Why do you think so?

Today, the share of pension funds' resources allocated to the real economy is indeed low. First of all, we need to make a long-term investment for SMEs. We need to study a guarantee mechanism. I find the proposal to activate a public guarantee for pension funds' investments to support the growth and capitalisation of micro, small and medium-sized enterprises very interesting.

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