The chemical and private oil companies in the state-owned ENI group are setting up the Fondenergia for their employees, as a funded pension scheme to provide an additional pension to the state benefit. The fund has applied to the authorities for authorisation and has been told that it can start collecting contributions.

By the middle of last year, the fund had reached the minimum number of 'associates' required to go ahead with the formation. There are 46,000 potential members, but ENI says that in the absence of full details as to the exact proportions that will be contributed the extent of ultimate membership cannot be gauged, and of course, employees who said they would join can withdraw before the start.

The proportion of the initial subscription fee paid by the employee will amount to around one quarter, with the balance being contributed by the company. In addition there will be the contribution to the leaving service indemnity - the TFR - that is being paid through the pension fund. This contribution will vary depending on the group company the employee is with.

After two years, the the employees' contributions and those of the employer will become equal and amount to 1.32% of salary for energy workers and 1.07% for the private oil companies in the group.

The fund is being administered by a six-member management committee, half coming from the group and half from the employees' representatives. Its role is to bring the fund into being. It will then be replaced by supervisory boards, elected by both sides. One of these will be the delegates assembly made up of 40 members, again elected 50/50. The administrative council will comprise between 12 and 16 members on a joint representation basis. The board of auditors, will be of four auditors, again from both sides.

The collection of contributions, including the cash to fund current expenses, will be entrusted to a depositary bank, with the administration being passed out to a service provider. The assets will be managed by an outside approved money manager. All these service providers will be chosen as a result of open competition organised as a tender.

At least twice a year, members will be given a statement of the value of their own contributions in their personal pension account together with those of the employer and the TFR contribution, to which the interest earned is added on.

The pension is payable at the state pension date, provide the member has at least 10 years association with the fund. The pension is provided by an insurance company. Up to 50% of the benefits can be taken as a lump sum.

The contributions accrued can be transferred to another complementary pension fund if the employee changes job and there is a fund in the industry, or is promoted to being an executive. On death before retirement, the value of the account is paid to the dependants.

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