ITALY - The International Monetary Fund (IMF) has said reforms to increase private pension saving are essential in Italy.
As part of its staff report, the IMF also noted that a large number of self-employed Italian workers remained without private pension coverage.
It said a measure establishing a second pillar pension scheme for private sector workers had been approved in November 2005, but that its implementation had been delayed until 2008 and further modifications could take place before then.
The reform, which would allow workers to redirect their firm-based severance payment fund contributions towards privately-managed retirement schemes, had been delayed by debate about fiscal costs and market concerns, said the IMF.
With regards to fiscal costs, the government was expected to compensate firms for the loss of low-cost financing they would suffer from the diversion of severance fund contributions.
Furthermore, the extent to which the provisions established a level playing field among prospective private pension plan providers was also a concern, it explained.
By Lisa Haines
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