ITALY - The welfare ministry is to produce a decree outlining a new role for the Regulatory Commission of Pension Funds (Covip), according to under-secretary for labour, health and welfare, Alberto Brambilla.

Brambilla told IPE that next year a decree to emphasise Covip’s “central role” in the supervision pension funds would be drafted and presented to parliament.

The pension reform that was passed in July redefined Covip’s responsibilities, enlarging them to the supervision and monitoring of insurance products, which had previously been the remit of insurance regulator Isvap.

Brambilla said the new decree would also make the reform easier to understand: “It will not be a super-expert matter, we want every worker to be able to understand.”

He added that since 2000 insurance products for old age provision have been officially part of the second pillar.

“But open and closed pension funds and insurance products were parts of two worlds, which were not on speaking terms with each other, and that made portability difficult,” Brambilla said.

Consequently, the government has consolidated the supervision of both pension funds and insurance products under one agency to end fragmentation and promote transparency as well as portability, he explained.

Both Covip and Isvap declined to comment.

Brambilla also commented on the pension reform in general, telling IPE that up to €5bn could be paid in pension funds once the more radical part of the pension reform is implemented.

“If the government schedule is implemented smoothly, from next year workers will be able to invest their end of career indemnity, called TFR, in pension funds,” Brambilla said. The yearly net value of TFR is €13bn.

“Workers close to pension age may decide to keep their TFR as it is payable at the end of their career, but If we count in younger workers we could look at €4-5bn and it is not a small sum,” he said.

The welfare ministry is also considering a further decree on fiscal matters such as incentives on pension contributions, he added.

The Italian financial market is regulated by a number of different agencies, including the anti-trust authorities, the central bank and the stock exchange commission.

A bill was presented to parliament last January to tidy up the system as a matter of urgency following the Parmalat and Cirio debacles, but it has still not been passed.

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