ITALY - The Association for the Development of pension funds, Mefop, whose major stake-holder is the finance ministry, has appointed a new president after Marcello Messori stepped down at the end of his term.

The ministry, owner of 60% of Mefop, has appointed Mauro Marè and a new board of directors. Marè is a consultant to the finance ministry and professor of finance at the Università degli Studi della Tuscia.

As Mefop's new president, he today opened a conference - "Pension funds and multi-compartment" - organised by Mefop and the BSI Gamma Foundation.

The conference focuses on the positive and negative aspects opened to pension funds offering diversified investment profiles, which would vary according to the members' age, risk- inclination and economic situation, the so called multi-compartment.

Marè welcomed the discussion on the multi-compartments strategy, saying: "It could not be more opportune, giving the probable approbation of the pension reform, in the next few days or months."

The reform, he explained, would strengthen the second pillar by demanding that workers pay their end-of-career indemnity, Tfr, into pension schemes. It would also enhance the debate on how money is managed, especially in view of the so-called silent-assent principle. This deals with workers who express no preference as to how to invest their Tfr.

Making a wider use of the multi-compartment, would give scheme members a higher degree of participation in the management of their own pension provisions, as they could chose among different investment solutions.

The Mefop president said it would also increase competition among pension funds: "This is a very important question.” But, he told delegates, there was a risk that pension funds would incur higher management costs.

The crucial ingredients for the success of multi-compartment strategy, he stressed, are clear and deep information to scheme members and transparency.

"Workers need to feel save, especially in the wake of scandals," he told IPE on the sidelines of the conference.

"In this country we need to foster a financial culture, we must learn to take risks or more simply be more informed about alternative forms of investments."

Marè said pension funds could face a potential dilemma when dealing with "silent assent funds".

"When money come in through the silent assent clause, what is a pension fund to do? Should there be a pre-defined formula elaborated by the regulator Covip or funds should make up very-low risk funds for silent assent funds?"

Marè said there have been suggestions to set up a public fund especially to manage money coming from workers who did not make a choice. He said the idea might be an "interesting" solution but added: " I personally see complications and on the matter and have heard a great deal of polemics."

The pension reform has been passed by the upper chamber of parliament and is currently at the last stage of discussion in the lower chamber of parliament.

He added: "Once the reform has been approved, the game passes to the ministry of finance, the ministry of labour and welfare, Covip, the unions, and hopefully Mefop to decide on regulations regarding the funds from silent assent."