New Italian government alters pension plans

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  • New Italian government alters pension plans

ITALY - Maurizio Sacconi, welfare minister of Italy's new right-wing government, has unveiled plans for the Italian pension system which may result in an open battle with the country's trade unions over the coming months.

Sacconi, who was appointed welfare minister in spring after premier Silvio Berlusconi's return to power, has proposed radical changes to plans previously implemented by the former centre-left government of Romano Prodi.

Proposals by the Prodi-led government were to phase in an increase in retirement ages and number of pensionable years held over several years from 57 now to 60 in 2010, and that plan will not be scrapped despite Sacconi describing it 'an onerous mistake' of the previous government.

Instead, Sacconi wants to start using the new 'coefficients' or ratios through which pensions will be calculated as a function of contributions, from as early as this autumn, rather than the 2010 date set by Prodi's government.

One of the tug-of-war issues he could have with Italian unions, however, will be the definition of 'fatiguing' jobs or manual labour employment which officials believe allow people to retire at an earlier age.

Prodi's government had established workers in a category of jobs identified as 'fatiguing' would be exempt by normal pension arrangements but Berlusconi's government aims to significantly narrow down the definition.

Another bone of contention could be the accumulation of a pension and additional work income. Italians are forbidden from collecting both a pensions income and additional income through employment under existing rules so Sacconi intends to abolish the ban as part of the upcoming budget law, to be approved this month.

Sacconi also said he will scrap the Prodi government's plan to create a 'SuperInps' - a state organisation overseeing the work of the Inps, Inail and Inpdap pension institutes - in favour of merging of the smaller institutes Ipsema, Ipost, Enam and Enpals.

He believes this move could save the government around €3.5bn and would help to fill the financing of phasing changes to an increase in the minimum retirement age and years of contribution needed.

Sacconi told Italian journalists yesterday "there is an issue of stabilising the pension bill" especially in the long term, as his government intends to keep spending flat compared to GDP.

According to the minister, the Italian government intends to give "much stronger impetus" to the private pensions market. He said intervention will be focused on tax, so the burden may be reduced on existing 'open' pension funds, and on making workers' choices between the private and public options more flexible over time.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email

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