Italy: regions on ‘front line’ of pension reform

ITALY- Regions must prepare to be on ‘the front line’ to face the consequences of pensioner poverty brought about by welfare reforms, says one of the architects of the pension fund for the semi-autonomous region of Trentino-Alto Adige.

Gianfranco Cerea, was speaking at a conference organised by the European Institute of Public Administration in Milan, as the technician behind the region-wide pension structure of the semi-autonomous region of Trentino-South Tyrol.

Cerea argued that the wave of pension reforms started in the country in the Nineties had reduced state pensions and some categories of ‘weak workers’ would be impoverished. These workers would turn to the regions for support.

“The regions will have to increase their social expense in an scarce-resources environment,” Cerea said told delegates of other regions in the centre-north part of the country, Confindustria and trade unions.

Italian workers tend to be “confused by the uncertainties on pension laws” but regions could turn themselves in promoters of the second pillar, encouraging its development and awareness among workers.

Cerea, a professor at the economy faculty of the University of Trento, spoke of the possibility to set up region-wide pension funds in Italy, following the example of Trentino which has actively helped the organisation of a pension system through the Regional Centre For Complementary Pensions Ltd, Centrum PensPlan SpA.

Trentino has since 2001 a territorial pension system covering employees with the 245 million euros Laborfonds, and self-employed workers with the 28 million euros PensPlans Plurifonds, both funds are independent of the region.

Cerea said that a regional administrative body, ‘regione’, would be the ideal agents in the promotion of territorial pension funds because they would take ‘the worker’s not on the fund’s side’.

“Workers cannot be left alone with a decision like pensions. It is a no-going back matter,” the professor stressed.

Cerea also tackled the issue of mobility, which he said could “explode” with the new pension reform. There are thousands of workers who have changed their jobs in the last year and a half but are still waiting for the transferral of their pension savings.

Regional funds could help ease this problem, as workers are 10 times more likely to leave a company rather than leave their region of origin.

A regional pension fund system would also have a role against discrimination and could efficiently address the issue of flexible minimum pension rate, which Cerea said, can dramatically change from region to region.

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