ITALY - Government intervention prior to the introduction of the Berlusconi pension reforms in 2008 must have a long term view for sustainability of the system rather than give importance to making quick returns.
According to Tito Boeri, the director of the Fondazione Rodolfo Debenedetti, an Italian think tank, the only step prime minister Romano Prodi can take is to anticipate the 2008 reforms and mitigate any adverse effects they may have.
In an article on ‘Lavoce’, written in conjunction with political economy professor Agar Brugiavini, Boeri listed the interventions he suggests the government should make in this regard.
He stressed the need for the conversion coefficient to be updated on the basis of changing mortality rates. The director explained that due to an increase in longevity, pensions will have to be distributed over a longer number of years. Therefore the percentage people are given each year has to adapt to the changing demographics.
He also called for increments to be introduced within the coefficient conversion for employees who work beyond the age of 65. Boeri noted that the proposed reforms do not account for this group of people which in turn does not encourage to extend their working life.
Boeri suggested the introduction of actuarial reductions for those who retire before the age of 65. The think tank had already proposed this and he said had this been taken on board in 2004, the country would have already saved 0.2% of the GDP.
According to Boeir, there is need for a revision of the difference in treatment of male and female employees in the 2008 reform. However, he noted that if the actuarial reductions were intrduced, this would not be necessary.
By Angele Spiteri Paris
The secretary of state for work and pensions has told MPs clawback and avoidance measures could be imposed for the people responsible for driving Carillion over the cliff.
Occupational pension provision has continued to grow in value, but there remains large variance in incomes across the pensioner age group, according to latest government data.
Defined benefit (DB) schemes could have an aggregate surplus by 2021 under Pension Protection Fund (PPF) projections, its strategic plan for 2018 to 2021 reveals.
Investment consultants are failing to recommend products that outperform net of fees, the Competition and Markets Authority (CMA) has said as its investigation into the market continues.