CIDA, the union representing managers in Italy’s private and public sectors, has started legal action against Istituto Nazionale di Previdenza Sociale (INPS), the main entity of the country’s public retirement system, and the Ministry of Economy and Finance for blocking the process of fully adjusting pensions to inflation, as members lose purchasing power.

“We have filed five lawsuits in five ordinary courts, and two in two courts of accounts, for a total of seven [so-called] pilot cases. We filed them in the last few days and expect the first hearing to be scheduled shortly,” CIDA’s director Teresa Lavagna told IPE.

The ultimate goal of the legal action launched by the association is to bring the cases before the Constitutional Court to check the legitimacy, and potentially repeal, the measures taken by the government, she added.

CIDA is taking legal action against measures taken by the cabinet through the budget law for 2023, approved by parliament in 2022.

According to the budget law, the automatic mechanism to increase pensions in line with inflation applies for the period 2023-24 in full to pension payments equal to or less than four times the minimum payment by INPS, meaning a total of around €2,000.

The minimum benefit for this year is €563.74 per month, according to a circular sent out by INPS in April. This means that pensions will increase by 7.3%, according to the Ministry of Labour and Social Policies.

The mechanism applies to the extent of 85% of the inflation increase for pension payments totalling equal to or less than five times the minimum payment by INPS, meaning a 6.2% increase, according to the labour ministry.

The increase in the level of pensions according to inflation decreases to 53% for benefits higher than five times the INPS’s minimum payment.

CIDA has sent a warning to INPS on behalf of seven of its members, following the normal legal procedure, asking it not to implement the process to block the full adjustment of pensions to inflation, as members have lost purchasing power with high inflation rate.

“INPS had 55 days to reply, but we know that INPS can’t reply because it is applying a state law, and we also go against the Ministry of Economy and Finance that has issued the law,” Lavagna added.

A spokesperson for INPS said the institution was not aware of any legal action. INPS did not reply to a further request for comment on whether it had received CIDA’s warning, and on its response to the legal proceedings. The Ministry of Economy and Finance did not reply to a request for comment either.

CIDA has now started talks with MPs and members of the government to try to include full pension adjustments to inflation in the next budget law.

“Pensions are losing a lot [of purchasing power], a loss that pensioners won’t recover [in their lifetime], even if the block applies to only one year,” Lavagna said.

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