Assets under management (AUM) of Italian pension funds saw a marked increase at the end of the first half of this year to €214bn, compared with €205bn recorded at the end of December last year, on the back of positive returns, recovering from last year’s losses, according to figures published by pension regulator COVIP.

Just over half of the increase in terms of AUM in H1 is the result of better priced securities, but also due to contribution flows net of expenses, it added.

Net AUM of industry-wide pension funds (fondi pensione negoziali) grew by 5.4% at the end of June compared with last December, totalling €64.4bn. In open pension funds assets totalled €30.3bn at the end of the first half of this year, and €47.3bn in individual pension plans (PIPs), a 8% and 4.1% increase, respectively, compared with the amount recorded at end of the last year, COVIP said.

Italian pension schemes recorded overall positive returns in the first six months of 2023, but results were up particularly for those with higher exposure to equity investments, according to the regulator, with the recovery trend that continued after last year’s losses.

In industry-wide schemes, equity sub-funds recorded on average gains of 6% in the first six months of this year, 7.6% in open pension funds, and 7.2% in PIPs.

Linee bilanciate – sub-funds investing both in equities and in bonds – returned on average 3.4% in the industry wide pension funds, 4.8% in open pension funds, and 3.7% in PIPs.

Returns in bond sub-funds, and in sub-funds with the guarantee for members to receive the full amount of contributions paid, or a minimum return, returned less in the first six months of this year, on average 1-2%, the report said.

Over the long time, from 2013 to the first half of 2023, the compound annual average returns of equity sub-funds stood for all types of pension schemes in the range of 5% and 5.4%; for mixed bond and equity sub-funds returns averaged 2% for PIPs, 2.9% for industry-wide pension funds, and 3.2% for open pension funds.

Yields on sub-funds with guarantees and bond sub-funds, instead, were close to zero or just over zero. In the same period, the revaluation of the severance  pay – Trattamento di Fine Rapporto (TFR) –  was 2.3%.

Equity sub-funds and most of the mixed bonds and equity funds recorded higher returns than the TFR, according to COVIP.

During the first six months of 2023, contributions collected from industry-wide pension funds, open pension funds and PIPs amounted to €6.6bn, a 6.1% growth compared with the end of of 2022, the report added.

All pension schemes recorded an increase in terms of contributions, ranging from 7.7% industry-wide pension funds, to 6.5% in open pension funds, and 3.1% in PIPs.

The number of members went up by 2% at the end of June to reach 10.5 million, with industry-wide pension funds in particular recording a 3.2% increase to reach a total of 3.92 million members.

The construction sector recorded the largest increase in terms of members by 51,700 as a result of contributions paid by the employers.

The number of members in the pension fund for workers in the public sector grew by 18,800 through the so-called tacit consent (silenzio assenso) platform for new hires, which steers the TFR automatically into a pension fund.

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