The Italian government has drafted a new framework of rules to strengthen the independence and autonomy of the first pillar pension system (Casse di Previdenza) in terms of investments.
Federico Freni, the undersecretary of the Ministry of Economy and Finance, said that the regulation draft was ready and would be sent to the Ministry of Labour in the next few days.
The new framework, part of the budget law for 2023, will remove investment limits for the privatised Casse di Previdenza.
“There isn’t a political issue, and nothing has changed ,” he said, regarding the vision of the Minister of Economy and Finance on the Casse di Previdenza’s investments.
“On the contrary, the spirit of the budget law has remained [intact], strengthened by the fact that Casse di Previdenza are an essential element of the country’s system, above all from an investment perspective,” Fredi added.
The pension schemes have been waiting for an upgrade to their investment rules since 2011, when the government led by former prime minister Silvio Berlusconi drafted a decree on the matter.
The country’s association of private pension funds, Adepp, has spoken vigorously in the past in favour of reaffirming the autonomy of the first pillar pension funds, and at the same time improving the efficiency of supervision and control mechanisms.
“The rules that will come by June boost the autonomy and wisdom of the Casse (di Previdenza), so that they can dictate the rules on the financial transactions they intend to conduct.” Freni said at the annual event Stati Generali della Pre-Videnza dei Liberi Professionisti organised by AdEPP in April.
The budget law for 2023 foresees that by 30 June of this year the Ministries of Labour and Economy draw up a regulation on investments, conflicts of interest and depositary rules for the first pillar system, after consulting with the pension regulator COVIP, replacing a law decree dating back to 2011.
The rules will also address information for members, obligations relating to investment governance and risk management.
“This is an important step. Following the definition of the rules, the Casse di Previdenza will then have to adopt, within six months, specific internal regulations to be submitted for approval to the supervising ministries,” Francesca Balzani, acting president of COVIP, said yesterday introducing the annual report of the Italian pensions regulator.
Balzani explained that now the first pillar pension funds follow their own, diverse investment rules, but they can carry out a comprehensive review of internal regulations adopted so far on investments, levelling out differences.
Total assets under management of Casse di Previdenza reached €107.9bn at the end of 2021, the latest figures available according to COVIP, up by €7.2bn or 7.1% compared to 2020.
The pension funds invest €20.5bn in debt securities, €7.8bn in equities, €58.4bn in UCITS, €3.7bn in direct real estate, according to COVIP’s annual report.
Real estate investments amounted to €19.8bn in 2021, a 1.1 percentage points decrease compared to 2020.
Investments in the Italian economy, for example in real estate and securities issued by entities in Italy, including government bonds, amounted to €37bn in 2021, equivalent to 34.3% of total assets, down by 0.3 percentage points compared to 2020, the report added.
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