ITALY- Pension regulator Covip, Commissione di Vigilanza sui Fondi Pensione has given the go-ahead to the first government-backed pension scheme aimed at public employees, Fondo Scuola Espero.
Espero is targetting the 1.1 million school staff and teachers, which represents, according to Covip, 33.47% of public employees.
Covip also said it has granted authorisation for the fund within four weeks of application. The bill setting up the fund Espero, is known as ‘Decreto Legge 346” 2000.
The state is to pay 2.58 euros for each potential member of staff towards expenses for the start–up costs and the same amount is required of members as a joining- fee.
Public employees have been so far barred from schemes because their end of career indemnity, Trattamento di Fine Servizio, TFS, is not know to the law in the same way as other employee’s “Trattamento di Fine Lavoro” or TFR, the main component of the second pillar.
But employees hired by December 31 2000 who wish to join can have their TFS converted into a TFR. The state would pay 2% of it in the fund and would also give an “extra” 1.5% contribution, a consultant of the fund told IPE.
These employees would pay one per cent of their salary in the fund and the state as their employer would pay the same amount.
Workers hired from January 1 2001 get a ‘virtual’ TFR indemnity and are required to pay the whole indemnity in the fund, as well as the one per cent quota.
To secure a quick response, the state will pay an extra one per cent cash into the annual contributions for those who join straight away. The extra contribution would drop to 0.5 for those who join the next year.
The present provisional board consists of directors appointed by the ministry of education and from the most representative trade unions. As the fund reaches 30,000 members a new administrative board would be elected.
Recruitment is likely to start between September and October, the fund’s consultant told IPE.
Next year, the new board could put out a request for tenders to manage the resources gained from subscription fees and the state’s 2.58 euro-a-member contribution.
The TFR contributions and the extra 1.5% one will be managed by INPDAP, the Istituto Nazionale di Previdenza per i Dipendenti dell'Amministrazione Pubblica.
Espero was set up by the Agency for the Representation of the Public Administration, Aran, Agenzia per la Rappresentanza Negoziale delle Pubbliche Amministrazioni, and the most representative trade unions.