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Trio of Italian pension funds in €1.8bn merger

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The three Italian pension schemes for employees of co-operatives are to merge, creating a single DC scheme with €1.8bn in assets and more than 117,000 members.

The merger was agreed upon by co-operatives associations Agci, Confcooperative, and Legacoop, and the three main Italian trade unions, Cgil, Cisl, and Uil.

The parties issued a joint press release praising the “historical” agreement. The merger between the three existing pension schemes – Cooperlavoro, Previcooper, and Filcoop – will create the fifth-largest pension scheme in Italy by members and the eighth-largest in terms of assets under management.

The statement said: “Trade unions and cooperatives […] are launching the most significant merger project between pension funds in Italy in the private sector.

“The economies of scale will allow for cost containment and will improve the dynamics of contract relationship with the entities that manage the assets, as well as the quantity and quality of the services offered and organisational arrangements, by consolidating the governance, in a context of stronger solidarity and improved industrial relationships.”

The objective of the merger, added the statement, was to combine efficiency and representation and to facilitate better results for members thanks to the larger size of the scheme.

The parties said that they will launch parallel initiatives to support membership growth.

Cooperlavoro, one of the three pension schemes to merge, has seen its membership grow significantly through automatic enrolment, which was introduced as part of recent negotiations on the collective labour contract for the sector.

Other Italian pension schemes such as Prevedi, the construction sector scheme, have implemented similar forms of automatic enrolment, where only employers contribute to members’ pensions.

Low second-pillar coverage in Italy is seen as a social emergency amid declining first-pillar pension adequacy. But second-pillar pension schemes are also seeking members to help grow assets and investment capacity, as they aim for better returns.   

The country’s pension regulator, COVIP, has often called for mergers between schemes, on the grounds that members would benefit from economies of scale.

However, so far there have been few such agreements. The parties involved often fail to agree on issues such as employee and employer representation on pension scheme boards.

Mergers between public transport sector pension schemes, such as Priamo and Eurofer, and aviation schemes Previvolo, Fondav, and Prevaer, have been repeatedly discussed, but no agreement has been reached so far. Schemes have cited specificity of member needs as a reason to preserve independence.

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