ITALY - One half of the Italian workforce has decided on where to place their severance pay 'trattamento di fine rapporto' (TFR) but most of those have decided against using putting it into a pension fund.

A survey commissioned by the Italian weekly Economy suggests 72% of those who have already made a choice abiout the use of their TFR payments have opted to leave the money with the company.

In order to do so, they had to send a written statement to their employer to object to the "silent consent" provision or the money would have automatically moved into a pension fund.

Some market experts anticipated objection to using the TFR for retirement purposes because once put into a pension fund the money cannot be used for anything else. Until now, Italians have tended to use severance pay to go towards buying a house or a car.

Others had predicted the National Social Security Institute (INPS) is seen as a more reliable fund operator than pension funds. While companies with fewer than 50 employees - making up over one-third of Italian firms - get to keep the TFR, larger companies have to put the money in a newly-created fund managed by the INPS.

However, the Italian finance ministry has suggested figures for pension fund participation are not looking too bad.

The government had said 40% of the workforce would choose to use severance pay for their retirement provision by year-end. According to the Economy poll, 28% of those who have made a decision put the money in a pension fund yet 49% are still undecided what to do.

But time is running out as the deadline for a decision is July 1.

At least 48% of the 1,000 people interviewed said they did not feel they had enough information to make a decision.