ITALY - Pension fund watchdog, Covip, has described the first six months of 2007 as "crucial" in the growth of workplace savings.

Figures for 2006 show fewer than 100,000 people joined pension schemes in Italy, with a total at the end of December of 1.65m.

Best growth was enjoyed by Solidarieta Veneto, a regional fund for Venetian industries, at just over 10%.

The total number of funds has declined over the twelve months from 132 to 126, mostly in the ‘open' category, not related to a specific profession, industrial sector or employer.

But the government expects flows that could more than treble pension scheme membership this year.

These will come from the redistribution of severance pay from the accounts of larger employers into pension funds.

This money, held by companies and doled out to employees on redundancy, is estimated at €19bn a year of which one-third is expected to find its way - along with three million new members - into retirement schemes.

They need reinvigoration. A decade after the first such schemes began, they have accumulated collectively little more than €11bn. Two schemes, the metalworkers' plan with €2.9bn, and the chemical and pharmaceutical industry plan, with €1.5bn, account for more than one-third of all assets.

The fund for housewives, Fondo Famiglia, has struggled to attract more than 6,000 members after more than six years in operation.

"The first half of 2007 will be crucial for Italian pension plans," said Ambrogio Rinaldi, director of supervision and research at Covip, though he warned that not all pension funds would benefit from the diversion of the severance pay.

Rinaldi explained that contributors who wish to keep their portion of money from being transferred to a pension plan will, however, have to make an active decision to keep the money with the company or in state savings.

Meanwhile, the number of individual pension plans in Italy rose almost 17% last year to 948,000, with a 36.4% growth in assets to €4.55bn.