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Europe - Italy.
Government approves pension reform with two-year delay
The Prime Minister's cabinet approved a long-awaited reform of the pension system Nov. 24, 2005. The reform, which would launch a second pillar of private and occupational pension schemes, will go into effect Jan. 1, 2008, two years later than originally planned. However, the details of the program could change depending on the outcome of April's elections.
The reform aims to promote a supplementary pension using contributions companies currently hold on behalf of their workers in a fund (TFR). In particular, workers will be encouraged to transfer their TFR contributions out of the company to personal, privately managed pension funds or to a collectively managed fund.
The delay of the TFR reform means it will come into effect at the same time an overhaul of the state pension system modifies age and contribution conditions. Under the latter overhaul, the retirement age would be moved from 57 to 60 for workers who wanted to qualify for full state pensions.
January,
2006
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