Supplementary pension reform, no mass without money

Some ideas are new, others have already been at the heart of the debate for years.In any case, all those suggested by experts to relaunch pension funds are valid and should at least be examined by Minister Giancarlo Giorgetti, who announced last week at the Savings Show the launch - as soon as possible - of the reform of supplementary pensions. The Economy Minister's declarations, on the one hand, have given a jolt to the entire sector, which has been waiting for new incentives with faint hope for years, but on the other, the Minister's remark that the reform will be at zero cost to the state coffers has cooled tempers. So there is no shortage of recipes, but sine pecunia ne cantatur missae: the Latin version of the eloquent medieval proverb 'without money you cannot sing mass'. And without resources it is not possible to think of a real relaunch of supplementary pensions.

However, small steps forward that could be taken without burdening the state are also welcome. Better little than nothing. And one could start by abandoning - as a default choice - the guaranteed lines, where since 2007 silent workers who do not explicitly indicate where to allocate their severance pay are directed. At the time, the aim was to protect pension fund members through the mechanism of silence of consent, but almost two decades later, the experience of guaranteed lines has not been satisfactory, thus contributing to increasing Italians' disaffection with pension funds.

Covip itself has repeatedly expressed itself in favour of overcoming this provision, to be replaced by the adoption, especially for younger workers, of life-cycle investment lines. This was recently reiterated by the president of the Supervisory Authority on Pension Funds, Francesca Balzani, during a parliamentary hearing on 10 April.

Pension funds with life-cycle options adapt the investment strategy to the life stage of the investor, gradually reducing the risk as retirement approaches, and are particularly suitable for those who want a simplified, guided approach to retirement savings management. This innovation would be of great importance especially if a new phase of automatic membership were to be introduced to apply to all workers and not only to newly recruited ones.

The OECD, in its Pensions Outlook 2024 published last December, pointed out that in the countries that show the best results in terms of pension fund returns, life-cycle investment lines, which employ a majority share of investment in equities for a large part of the working life of members, are typically more widespread. And, as the government hopes, a higher spread of equity investment would also allow more room for productive investment in domestic companies.