ITALY - The Italian pensions regulator, COVIP, is considering imposing a small levy on pension funds to raise additional revenue for its operating budget.
The Commissione di Vigilanza sui Fondi Pensione, COVIP, is in discussion with the Ministry of the Economy to set a fee on pension funds, most likely a proportion based on assets under management, said Bruno Mangiatordi, a COVIP commissioner.
COVIP has always had the statutory power to ask the Ministry of the Economy for the imposition of a fee upon pension funds. However, until now, COVIP’s financial situation did not require this fee to be imposed, Mangiatordi said.
But recent across the board budget cuts by the Italian government has meant that COVIP’s funding has been cut at the very time when the regulator is to be given new powers, Mangiatordi said.
“The fact is, we haven’t used the self-financing mechanism but we don’t have fresh money from the state,” he said. “Our overall budget amounts to e4.5m and we have a lot of needs that cannot be dealt with with such scarce resources. The government is reducing the resources available to all public agencies, and we are hit by that as well. On top of all that, we [have been] called to perform new functions and this is clearly in contrast with the present trend of reducing the flow of resources available.”
Pension funds support the move, provided that the fee is not too onerous.
“I think it’s a solution because COVIP will really increase its role as a market regulator, and it is important for COVIP to have enough resources to play its role,” said Luigi Ballanti, director of the Association for the Development of the Italian Pension Funds Market (MEFOP). “I don’t see a particular problem if it’s a small amount based on the assets under management.”
Fondenergia manager, Alessandro Stori, said they were aware that they might have to pay a fee to COVIP.
“When COVIP was established, it was a provision that sooner or later it would be financed partially through fees,” Stori said However, we are strongly determined to keep costs low.”
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