ITALY - The Italian labour ministry will unveil plans to restructure the national pension institute INPS (Istituto Nazionale di Previdenza Sociale) before the end of the year, minister Cesare Damiano has announced.
These reforms will include a review of the current set up for 'FondInps', the fund which will ultimately manage severance payments which Italian private sector workers decided to hold with their firms rather than shifting them to private pension funds.
This requirement to place severance payments either with a firm or in a pension was introduced in October with the introduction of the TFR (trattamento di fine rapporto) reform.
The minister said the structure of FondInps has been agreed and it would only take a final green light from the Finance Ministry to kick-start the operations, so managers of FondInps should be named shortly.
It is understood the government's focus on the restructuring of INPS, which are part of Italy's 2007 budget, would be on separating the pensions from assurance business. The plans were announced last July after a struggle between the government and Italy's three main unions, CGIL, CISL and UIL.
On the representation side, initial proposals included in the earlier draft budget involved the abolition of central, regional and provincial INPS committees - which are strongholds of the unions - in an effort to reduce costs. However, composite action of the unions now means these elements will not be completely eliminated.
The ministers' comments came as he presented, together with INPS's executives, the institute's accounts which showed in 2006 the fight against ‘concealed labour' contributed to a 4.3% increase to €5.04bn in inflows to the institute's coffers. In this first part of the year, around 175,000 concealed workers were found.
Thanks to strong effort put into tackling concealed work, the institute found 130,000 firms did not pay any tax or assurance for their employees between 2003 and 2006. In the same period, INPS also collected contributions for an additional 300,000 workers, equating to just shy of €12bn of contributions. Including inflows and outflows, the institutes's annual turnover is of more than €400bn.
INPS's president Paolo Sassi said the body's performance was in line with expectations, adding despite the continue newsflow on the theme of pensions this year, there had not been a significant increase in the number of people who claim a pension. According to the latest data from INPS, the institute provides one pension for ever one citizen in the country.