ITALY – The Italian welfare ministry is to set up a committee of experts to regulate the changes to the second pillar brought by the pension reform.

A spokesman for the welfare minister, headed by Northern League Party member Roberto Maroni, told IPE that a committee of experts would establish in detail how pension schemes will be financed in the aftermath of the pension reform.

The reform, passed last July, has settled that the end-of-career indemnity, known as Tfr and generally paid as a lump sum, should be paid instead to pension schemes in order to boost the second pillar and reduce workers’ dependence on the state.

The committee will set the rules regarding Tfr payment. The cabinet and parliament will debate on the committee’s conclusions but the latter will only act in an advisory capacity, as the pension reform is one of the country’s “delegation laws”.

The welfare spokesman explained to IPE that once the parliament approved the law, which maps out the bulk of the reform, it also delegated the cabinet to develop the details within 18 months of approval.

This means the details of the pension reforms should be completely developed and ready for implementation by the end of 2005.

The spokesman declined to elaborate on the identities of the experts, but said the appointments will be made public in a matter of weeks.

Maroni was quoted by news agencies as saying the cabinet would debate on the Tfr rules in March and approved them by April, but the spokesman did not comment on the report.

It was also reported that the minister said the committee should deliberate on tax homogeneity and governance.

So far the government has already implemented one aspect of the pension reform which encourages public sector’s workers with 35 years of contribution and 57 of age, the requisites for retirement before the reform, to work longer.

Such employees can continue to work in return for a 32.7% tax-free bonus every month.

This aspect of the reform has been made operative in September. The ministry said that so far more than 31,000 bonus applications have been forwarded to the National Security Institute for the Public Sector, Inps.