Legal difficulties surrounding the participation of trade unions on the boards of planned Italian company pension plans mean the first contributions will not be paid until 1998.
The Corte dei Couti, a body which oversees the content of legislation, last month struck down a decree put forward by labour minister Tiziano Treu on the grounds that it is not strict enough requirements on the composition of the overseeing board.
Treu was trying to ease access to such boards for trade union officials but another decree issued by the finance ministry stipulates that members of the pensions boards cannot be connected to the contracting parties. This decree also had the effect of barring company personnel such as the finance director and pensions manager.
Plans can be set up under present rules but do not have a legislative framework to operate within and the ruling now places a number of union-employer agreements in limbo.
The labour ministry’s decree will probably be redrafted this year, but there is disagreement between unions and government over the finance ministry’s stricter interpretation.
Commentators have suggested that the delay fits in with government plans, allowing them to retain some tax revenue this year that they would have lost, while allowing the start of contributions to be better co-ordinated with plans for privatisation of state companies - the most significant being ENEL and TELECOM, respectively the state electricity and state telecoms companies. It is hoped that pension funds will be significant buyers of these shares.
Finally the regulatory body, the Commissione di Vigilanza, remains understaffed for the task of overseeing all applications for the set up of plans. However, as the system was meant to compensate for reductions in social security provision, it is believed that all such hurdles will be overcome in time for contributions to begin next year.
Formerly a left-wing Christian Democrat, now in the centre-left Olive-tree coalition, Treu served as legal adviser to the second largest union CISL. The nature of the plans remains unclear but CISL would prefer a large number of decentralised, regional plans which the looser structure would have favoured.
Piero Marchettini, managing partner of Adelaide Consulting, believes that Treu was right to encourage union participation in this way as this would have helped to ensure the successful adoption of the system.
He said: The decree of the ministry of finance was stricter. Only people with a high level of qualification and no connection with the contracting parties could be involved.
“But this prevents the creation of many plans because if the company is not able to put a finance director and a human resources director on the board it does not make any sense for them to create these funds.” The unions which have signed agreements to participate on the boards would also be more reluctant to participate.
Marchettini added: “The strategy of the government appears to be to approve the law this year to show that they are providing an alternative to the reduction in social security, but at the same time to have the first contributions paid next year.”