Reform to Italy's closed pensions hits trouble
ITALY - The pensions reform package to the closed pensions market in Italy has run into trouble and is unlikely to be passed, warns Roberto Casanova at Milan-based financial consultants IAMA Consulting. Were the package passed, IAMA predicts assets under management in the closed pension fund industry will grow from €3.6bn to €39.5bn by 2005.
Casanova says the reform package, which seeks to redefine contributions rates, open up asset management possibilities and amend the retirement age among other things, was approved by parliament but is being blocked by the government which is coming under pressure from the country’s unions and employer associations.
“As usual it has turned into a political issue. We were hoping the bill would move smoothly through parliament and become law in the next fifteen months or so, but fears about its impact on retirement age and tax revenue mean that the government has blocked it. We can’t see it going through now in its current form,” he explains.
IAMA’s predicts that assets under management will still reach €22.5bn by 2005 even if the reforms are not passed.
In contrast, the open pension fund market for the self-employed is gathering momentum, with annual growth for 2001 in excess of 150%, says Casanova. “These funds are more private in structure and therefore not influenced by the unions. The closed fund reforms were intended to stimulate the closed fund market in the same way. But things have stalled for the time being.”