Italy's first so-called 'open end' pension funds have finally been grant-ed authorisation by the country's approval body, the Commisione di Vigilanza sui Fondi Pensione (CVFP).
Permission for 43 of the country's insurance companies and banks to begin operating private supplementary pension schemes was granted at the start of August, with a further 40 groups expected to receive the go- ahead before the end of the year.
The funds are expected to begin collecting subscriptions this month, with the only remaining hurdle being ap-proval from 'Consob' the Italian commission for financial market regulation, which still has to scrutinize each group's 'prospectus formativo'; the brochure explaining a fund's conditions to prospective clients.
The authorisation follows a series of delays in the approval process since applications for fund status were first submitted in August 1997. This has been blamed on a lack of staff and re-sources to supervise the reform implementation, but has also drawn accusations of bias on the part of the country's centre-left government towards the union who favoured 'closed-end' industry funds.
Italian open-end funds will only be available to self employed workers, with industry employees obliged to join the appropriate closed-endscheme, or wait five years before any transferal to the private sector can be made. Similarly, companies can only arrange for their workforce to be covered by a bank or insurance company, in the event that no other industry fund is available.
A spokesperson at the CVFP said contributions were expected to be at around the top rate of Italian tax deductibilty, or the lower amount between L5m or 6% of annual in-come. The spokesperson also explain-ed that the remaining 40 funds had not fulfilled the commission's regulatory criteria, and therefore the original plan to launch all the schemes sim-ultaneously, had been scrapped.
This month will also herald a great deal of activity in the closed end sector, with Fondenergia, the industry fund of the 50,000 employees of the state-owned ENI group of chemical and private oil companies announcing the appointment of investment managers to the fund's assets.
Full fund authorisation will also be granted to the Cometa industry scheme for automobile workers, giving it the same status as the three existing closed-end schemes; Fonchim (chemical workers), Quadri et Capit Fiat (managers at Fiat car group) and Fondenergia.
A further five schemes, Fondodentisti (dentists), Fundum (shopkeepers), Arco (paper and timber workers), Alifond (food sector) and Previcooper (self employed/managers) are still awaiting authorisation to switch from collection of preliminary subscriptions to scheme status, al-though these are expected to be granted shortly. Hugh Wheelan