ITALY – The outlook for a funded pension system in Italy has been set back following a delay to the approval of the reform of the so-called Tfr system.
The reform aimed to put the Tfr, an end-of-career indemnity, into pension funds. It has been estimated that this would boost the funded system by billions of euros.
The government’s press service AGI has reported that only three cabinet ministers, from the Northern League, backed the reform - which means that the measure will have to go back to parliament. Prime Minister Silvio Berlusconi did not vote.
Dow Jones Newswires quoted Labour Minister Roberto Maroni as saying that the government has decided to send the proposal back to parliament. It quoted him saying the move was "damaging, unjustified and counterproductive".
And it also had him saying that "strong pressure from Italy's economic and financial" circles was the reason the cabinet could not approve it.
The reform was first discussed when Berlusconi assumed power in 2001.
Asset manager association Assogestioni reckons Tfr funds, which are currently kept by firms and paid out as lump sums when staff leave, are worth more than €10bn per annum.