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Italian opposition sticks by Dini reform

ITALY- The left-wing coalition would not change the Dini pension reform of 1995 if it won the next general election in 2006, a top official at the left-wing Democratici di Sinistra party said.

“Italy is not a country with a pension reform problem: the reform has been done,” said Livia Turco, welfare expert for the DS, which is a member of the Ulivo opposition coalition.

Turco called the Dini reform “a revolution that few appreciate”. She told IPE in an interview that the positive effects of the mid-1990s reform, which the current government is trying to change, were being underestimated.

The left-wing coalition would not only rely on the Dini reform that abolished the defined benefit system and introduced a contributory regime, but is also poised to introduce a welfare programme.

The programme envisages the creation of a solidarity fund to help out workers with irregular employment who could retire in thirty years with very low pensions.

Turco explained that today workers who often change jobs are required to “redeem” the accrued contributions, if they want them to be added to their pension provisions. The DS party, she said, has suggested a one-fits-all system to hedge the risk of “starvation pensions”.

“With only one insurance model for every worker, there is the certainty that no matter how people decide to work, they are entitled in the end to a pension that includes the contributions accrued during their working life,” she said.

But older workers are also a target of the welfare programme, she explained.

“Italy has the lowest rate of employment of workers between 55 and 65 in Europe. This is not due to an unwillingness to work, but to many companies forcing workers into retirement,” Turco said.

Workers in their fifties who want to keep their jobs beyond the pension age, currently 57 years of age and 35 years of contributions, would be helped with training programmes.

The intended pension reform of the governing right-wing coalition also proposed to induce workers to stay employed longer with the payment of a 30% extra tax-free.

Turco, who in 1996 was appointed minister for solidarity and social affairs in the Prodi government, also criticised the increase of the pension age, one of the pivots of the reform due to be discussed in the lower chamber of Parliament on July 19.

The left –wing coalition would not raise the pension age, she said, but would concentrate on the second pillar.

“We are all for investing the Tfr (an indemnity paid at the end of a worker’s career) in pension funds, but workers should be given more certainty that these funds would really protect their savings,” she said.

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