ITALY - The pensions regulator (Commissione di Vigilanza sui Fondi Pensione - COVIP) has issued directives for pension funds to adapt to the reformed welfare system to be introduced in January 2008.
The signing and publication of these directives marked a step forward in the long-awaited pensions reform which was postponed to 2008 by the government led by Silvio Berlusconi.
COVIP president Luigi Scimia signed the directives which were then published in the government gazette.
These regulations were set to support all pension funds, be they privately managed, open-ended funds or industry wide ‘closed-end’, in their adaptation to the reform.
The changes in the pensions structure will encourage workers to transfer their termination indemnity payment (Trattamento Fine Rapporto - TFR) to a pension fund. This payment was historically made by the employer into a TFR fund on the worker’s behalf.
The directives lay down conventions and rules for pension funds and should contribute to the smooth running of the sector. They instruct pension funds on investment, management and administration matters.
COVIP president Scimia said the regulation would lead to uniformity across all pension funds as well as increased transparency.
He reiterated his complaint that the growth of the complementary pension sector has been too slow.
“In the month before the reform, there has to be a strong information campaign for employees to be fully aware of the necessity of complementary pensions and make an informed choice,” he concluded.
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