ITALY - Italy’s complementary occupational pension funds have strongly outperformed the TFR, the severance pay system, so far this year - according to the pensions regulator Covip.

However the president of Covip, Luigi Scimia, warned that the membership of complementary pension funds is still growing too slowly.

“There are conflicting signals in the light of the stalemate that at present characterises the progress of the pensions legislation,” he told a conference in Rome.

“On the one hand, in terms of new members, complementary pension funds still have difficulty in taking off. The growth in membership is still too modest.

“On the other hand, the returns achieved by the contractual and open pension have clearly surpassed the revaluation of the TFR.”

In the first nine months of 2005, the 43 contractual funds returned an average of 6% against the 2% return from TFR. The 92 open funds performed even better, with an overall return of 9%.

Since January 2003, contractual pension funds have returned 16% and open pension funds have returned 20%.

By the end of September 2005, membership of complementary pension funds, including the new personal pension funds or PIPS, totalled 2.9m, equivalent to 12% of the workforce.

Assets totalled €42bn, equivalent to 3% of GDP.

Membership of contractual and open pension funds now totals almost 1.5m, an increase of 2.8% compared with the end of 2004.

If the 500 pre-existing pension funds are included, the total membership of complementary pensions is 2.1m with assets of €40bn.