International corporations with operations in Italy are being pushed to rethink their occupational pension strategies as structural reforms under the 2026 budget law reshape the country’s second pillar system.
The budget law introduces automatic enrolment in Italy from 1 July and makes employers’ contributions portable, marking a significant shift for companies operating in the Italian market.
“Multinational companies will be affected by these changes. They must implement mandatory training [on supplementary pensions] for new employees and for all newly hired employees, depending on whether the new employee comes from another company and is already enrolled in the pension fund, or not,” said Claudio Pinna, head of Aon wealth consulting in Italy.
The introduction of employers’ contributions portability is expected to open the market further to banks and insurance companies, which are likely to target employees with offers to transfer contributions into their own pension products.
“Companies will find themselves managing contribution flows not only directly to a single fund but to multiple pension schemes with the related administrative hurdles,” Pinna said.
The budget law also tightens rules on severance pay (TFR). Companies that have grown over time to more than 50 employees are required to pay severance pay into the treasury fund (Fondo di Tesoreria) of the Istituto Nazionale Previdenza Sociale (INPS), a move that Pinna said will negatively affect corporate cash flow.
From 2032, the obligation to pay the share of severance pay not allocated to supplementary pensions into the treasury fund will be extended to companies with at least 40 employees.
Reshaping the second pillar
Beyond corporate implications, the budget law represents a broader reshaping of Italy’s occupational pension landscape. It scraps early retirement rules seen as a strain on public finances and raises the retirement age, encouraging longer working lives.
Mandatory training, automatic enrolment and a shorter 60-day opt-out period – compared with the six-month window applied when auto-enrolment was first introduced in 2007 under the silent-consent mechanism – significantly change the framework for supplementary pensions.
Compared with earlier reforms, the measures could meaningfully increase pension fund participation, Pinna said.
Under the new rules, employees who have been enrolled in a pension fund for at least two years will be able to transfer their membership to private pension plans (PIP) or open pension funds (fondi pensione aperti), while retaining the employer contribution set out in collective bargaining agreements – a right that did not previously exist.
Industry-wide pension funds have voiced strong opposition, arguing that the change exposes them to intensified competition from banks and insurers, while potentially leaving workers facing higher costs and less transparent governance structures, with negative implications for long-term investment and returns.
Assofondipensione, the Italian pension funds association, is lobbying for the portability rule to be postponed through amendments to the so-called ‘Milleproroghe’ legislative decree.
Stefano Pavesi, general director of Laborfonds, the pension fund for employees in Italy’s Trentino-Alto Adige/Südtirol region, said the reform would, over the medium to long term, significantly increase membership and assets under management in open pension funds and PIPs, to the detriment of industry-wide pension funds (fondi negoziali).
