THE ITALIAN PENSION SYSTEM - IV Report

2020

Main statistical tables: from 1a to 7a (special funds) and B29a, B29b-B30a, B30b Exhibits Appendix 1: Summary of the main revision and reform measures of the pension system from 1992 to 2019; retirement requirements under the current legislation Focus 1: Retirement requirements under the current legislation Focus 2: Pension indexation Focus 3: Evolution of contribution rates Focus 4: The contribution-based calculation system and the use of coefficients Focus 5: Historical series of paid out and current pensions Under Act n. 88/1989 and many other legal provisions, GIAS has to provide the following support measures listed below according to their economic relevance: 157 185 2012 Indexation Amount of benefits in December 2011 Growth Up to 1,406 euro +2.7% (100% ISTAT) From 1,406 to 1,924 euro +1.08% (40% ISTAT) From 1,924 to 2,405 euro +0.54% (20% ISTAT) From 2,405 to 2,886 euro +0.27% (10% ISTAT) Above 2,886 euro 0 2013 Indexation Amount of benefits in December 2012 Growth Up to 1,443 euro +3% (100% ISTAT) From 1,443 to 2,405 euro +1.2% (40% ISTAT) From 2,405 to 2,477 euro +0.6% (20% ISTAT) From 2,477 to 2,973 euro +0.3% (10% ISTAT) Above 2,973 euro 0 2014 Indexation Amount of benefits in December 2013 Growth Up to 1,487 euro +1.2% (100% ISTAT) From 1,487 to 1,982 euro +0.096 (8% ISTAT) From1,982 to 2,478 euro +0.048% (4% ISTAT) From 2,478 to 2,973 euro +0.024% (2% ISTAT) Above 2,973 euro 0 2015 Indexation Amount of benefits in December 2014 Provisional growth Final growth Up to 1,503 euro +0.30% (100% ISTAT) +0.20% (100% ISTAT) From 1,503 to 2,004 euro +0.285% (95% ISTAT) +0.190% (95% ISTAT) From 2,004 to 2,505 euro +0.225% (75% ISTAT) +0.015% (75% ISTAT) From 2,505 to 3,006 euro +0.0150% (50% ISTAT) +0.01% (50% ISTAT) Above 3,006 euro +0.135% (45% ISTAT) +0.09% (45% ISTAT)

Labour, 2003

In the last decade the Italian pension system underwent many changes. The process has started in 1992 with three major reform laws (passed in 1992, 1995 and 1997), supplemented by many other minor changes. Among the innovations introduced in the pay-as-you-go social security system, the most important one is the more explicit link between pensions and contributions, and pensions and life expectancy at retirement. The purpose of this paper is to provide an assessment of both the short-term and the long-term effects of the social security reforms on pension expenditure. Notwithstanding the slowdown in the growth rate of the pension expenditure/GDP ratio, the measures adopted so far will not be sufficient to eliminate the existing social security deficit in the next decades, particularly under the assumption of moderate economic performance and rapid population ageing. Reducing public pension expenditure requires the completion of the 1995 reform, a more rapid move towards a multi-pillar pension scheme, and the implementation of the much needed growth-enhancing structural reforms.

2015

TWe analyse the effects of the pension reform of 2011 on individuals’ retirement age, adequacy and distribution of the benefits for various categories of Italian workers. The main findings are an increase in the average retirement age, generally raising over time, coupled with a sizeable increase in average replacement rates. However, the most affected group is represented by women employees born in 1955 and retiring in the period 2012-2021, who face an average increase in retirement age of four years, while benefiting from an increase in the average replacement rate of thirteen percentage points.

2008

Ensuring adequate living standards to a growing number of elderly while restraining the growth of pension spending represents the main challenge for Italian pension policy. There is a need for an in-depth analysis of the economic conditions of the elderly which in order to target resources to the more needy groups. Using micro-data from the Bank of Italy Survey of

Labour, 1990

The study defines the role that supplementary funded pension plans could play in the Italian pension system. It also outlines the redistributive effects of pension benefits drawing on a survey of households' income. Finally it provides a brief assessment of the main problems of the Italian pension system.

Alternative pension schemes, particularly related to provisions on early retirement, might produce different effects on retirement behaviours, with important economic consequences. This paper presents new evidence on the effect of different seniority pension reforms, considering for the Italian case the evolution of an agent-based economy, with heterogeneous workers, whose retirement age depends on expected lifetime incomes. Using dynamic ageing, we examine behavioural changes along proposed pension reform path. Our model -properly calibrated to replicate the main Italian demographic and economic features and retirement dynamics -is used to estimate, under different policies, the age of retirement, total pension expenditures, pension benefits and the trend of inequality and poverty among pensioners. In general, we find a tendency to postpone the exit from labour market. In this case, pension expenditures grow faster, because savings, due to retirement postponement, are compensated by higher benefits. Precisely, we compare the current state of affairs (B) with the reform proposed by the Italian Welfare Minister (M) and with an anticipated start of the mixed regime, limited to seniority pensions (A). Under the scenario M we get slightly higher savings and minor redistributional effects; M increases more income concentration, but it mitigates poverty problems after 2008.

Advances in Complex Systems, 2004

Alternative pension schemes, particularly related to provisions on early retirement, might produce different effects on retirement behaviours, with important economic consequences. This paper presents new evidence on the effect of different seniority pension reforms, considering for the Italian case the evolution of an agent-based economy, with heterogeneous workers, whose retirement age depends on expected lifetime incomes. Using dynamic ageing, we examine behavioural changes along proposed pension reform path. Our model -properly calibrated to replicate the main Italian demographic and economic features and retirement dynamics -is used to estimate, under different policies, the age of retirement, total pension expenditures, pension benefits and the trend of inequality and poverty among pensioners. In general, we find a tendency to postpone the exit from labour market. In this case, pension expenditures grow faster, because savings, due to retirement postponement, are compensated by higher benefits. Precisely, we compare the current state of affairs (B) with the reform proposed by the Italian Welfare Minister (M) and with an anticipated start of the mixed regime, limited to seniority pensions (A). Under the scenario M we get slightly higher savings and minor redistributional effects; M increases more income concentration, but it mitigates poverty problems after 2008.

1999

Basic features of income provisions for the elderly in Italy. Public pension expenditure (including old-age benefits, disability and survivors' benefits plus an income maintenance provision for the very old) still absorbs a very large fraction of GDP so that Italy is second, among European Union countries, with a ratio of 17.6 per cent in 1994, surpassed only by the Netherlands, although it is below the European average in overall social protection expenditure (26,5 per cent, versus 28.4 per cent) 3. It follows that pensions represent by far the largest item in social protection expenditure (61.5 per cent, versus 48.4 per cent in France, 51.1 per cent in Germany and 51.6 in the UK).

Labour, 2003

SSRN Electronic Journal, 2001

Italy's pension system was reformed in August 1995. The new system has various desirable long-run properties and, overall, it represents an improvement over earlier systems. However, it fails to address two longstanding problems: extremely high contribution rates, and a lack of provisions for dealing with the substantial deterioration in demographic ratios expected over the next 30-40 years.