The ruling puts at risk the stability of the casse di previdenza’s accounts unless it significantly reduces benefits for younger members. Employees whose pensions are calculated with the old rules receive an income several times higher as those whose benefits follow the post-reform calculation method. At the same time, payouts to current pensioners are not covered by their past contributions.It is unclear whether the court’s ruling will result in parliamentary-level discussion to change the budget law, which still applies to current pensions. The 20 casse – despite being mandatory, first-pillar schemes – have managed as private entities since 1995 and make their own investment decisions. The state, however, reviews their accounts and can have a say in their management decisions if their financial positions are deemed to be at risk.In other news, it has emerged that Laborfonds, the €1.8bn second-pillar pension fund for employees in the northern Italian region of Trentino-South Tyrol, has left Assofondipensione, the country’s industry-wide pension fund association.In a letter to Assofondipensione, Laborfonds managing director Giorgio Valzolgher said he did not feel the association represented the interests of industry pensions funds adequately. He lamented the excessive pressure industry constituents – namely trade unions and employers’ associations – exerted on the association’s decisions as opposed to pension funds, which are its statutory constituents. Italy’s casse di previdenza must fulfil its members’ accrued right to earn a pension calculated using a contribution-based defined benefit (DB) formula, according to a ruling by Italy’s highest court of appeal, the Corte di Cassazione. As part of former labour minister Elsa Fornero’s public pension reform of 2011, first-pillar pension schemes for white-collar workers were required to switch to a notional defined contribution (NDC) calculation method and demonstrate their sustainability over a 50-year period.The prime minister Mario Monti’s government later introduced, through a budget law, a measure to have accrued pensions calculated with a mixed DB and defined contribution (DC) method. However, a member of the €2.35bn accountants’ cassa di previdenza, CNPR, successfully appealed to the court to have his pension calculated according to the old pure DB formula.
Italian roundup: Casse di Previdenza, Laborfonds, Assofondipensione
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