Italian pension funds are warning that allowing workers to transfer employers’ contributions could increase member costs and undermine long-term investment in the real economy.
Italy’s 2026 budget law, approved by parliament in December, allows workers to move employers’ contributions to open pension funds (fondi aperti) and private pension plans (PIPs), liberalising a system long dominated by industry-wide schemes.
According to Luca Ruggeri, director general of Fondo Gomma Plastica, the pension fund for workers in the rubber and plastics sector, portability exposes workers to the risk of signing contracts “at significantly higher costs” than those offered by industry-wide pension funds, known as ‘fondi negoziali’.
Ruggeri pointed to figures from pension regulator Covip on costs incurred during the accumulation phase.
Over five years, annual costs range from 0.38% to 1.62% for members of industry-wide pension funds, depending on the sub-fund, compared with 0.77% to 3.20% for open pension funds and 0.93% to 4.82% for PIPs.
Systemic risks
Maurizio Grifoni, president of Fondo Fon.Te, the pension fund for the commerce, tourism and services sector, warned in a LinkedIn post that, under the banner of “liberalisation”, the reform risks undermining the foundations of a pension system built on collective bargaining agreements.
Beyond costs, Grifoni identified three systemic risks: information asymmetry, “the end” of patient long-term investing, and the potential breakdown of the social contract.
Pension funds, which are non-profit by statute, cannot actively steer workers’ choices, while banks and insurers are well positioned to capitalise on capital flows, he said.
Pension funds are significant investors in private markets, supporting the domestic economy.
“Diverting these resources toward purely financial trading strategies would deprive long-term investments of oxygen,” Grifoni said.
Andrea Mariani, director of Fondo Pegaso, the pension fund for utilities workers, also warned that portability undermines long-term investment.
Encouraging competition between different forms of supplementary pensions makes it harder to invest in illiquid assets, particularly given negative returns at the early stages of deployment and the risk of outflows as individual positions are transferred, he said.
Ruggeri added that competition between industry-wide pension funds, banks and insurers is only “apparently on an equal footing”, in practice penalising occupational schemes.
Unfair competition
Portability could trigger a shift of members towards bank-run open-ended funds and insurance products. Economist Mario Seminerio said the main concern is that banks and insurers will be able to use “cross-subsidy” and “bundling” strategies.
Banks and insurers may offer service packages with a single headline cost that appears attractive, while pension product fees are kept nominally low and margins are recovered elsewhere, such as through mortgages or personal loans, Seminerio told IPE.
“Furthermore, I expect ambiguous forms of advertising, such as product comparisons, and other marketing gimmicks that have little or nothing to do with the performance of the pension product,” he added.
Seminerio argued that Italy should expand options for pension savings to be invested in passive, low-cost vehicles with higher long-term returns. “I am aware that the very strong resistance from active managers and distributors makes this aspiration a mirage,” he said.
