Italy may let insurers manage pension assets

ITALY – A Senate committee has refused to make a decision on a controversial amendment of the Pension Bill which would permit open pension funds to appoint insurance companies as managers.

The labour committee has passed on the amendment - which means the pro-insurance amendment could be presented to the whole senate for discussion shortly.

Under current rules, open pension funds are not permitted to use appoint insurers as managers. Insurers have been able to offer individual pension plans since 2000.

It pension funds opted for insurers, “they would lose their identity as funds and turn into clients of a company,” Marcello Messori, president of Mefop, the society for the development of pension funds, told the Italian press.

A civil servant told IPE that the first amendment could highlight a conflict of interest, as Fininvest, headed by prime minister Silvio Berlusconi’s daughter, has a 35.5% stake in the insurance company Mediolanum SpA.

But by failing the amendment, the civil servant continued, the committee were not showing political dissent, but rather they used a well-known technical device.

The committee may also introduce a second amendment expected to make it easier for consumers to compare costs and members to switch funds, which is not currently allowed.

The second amendment, which was approved by the committee, also attempts to enhance transparency - requiring asset managers to disclose management costs and keep clients informed.

Both the amendments are expected to be introduced this week to the upper chamber of parliament.

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