ITALY - Plans by the Italian government's to cut employer pension contributions may lead to a shortfall of EUR41bn in the state pension system, says the state pension body, the INPS (Istituto Nazionale della Previdenza Sociale).
According to a report in the Corriere della Sera newspaper, Silvio Berlusconi’s government plans to slash employer contributions by up to 5% for new recruits.
The rationale behind the move, which is fiercely opposed by trade unions, is to take account of severance pay contributions going into pension funds, according to one industry commentator.
“At the moment these are included on a company's balance sheet. The employee is going to get more put into his pension fund anyway so cutting the amount put in by the employer for new employees will encourage firms to hire the unemployed and give something back to them for moving severance pay off their balance sheets.”
By Madhu Kalia
This week's top stories include ITS' management buyout from Mercer, and The Pensions Regulator launching a probe into single-employer defined contribution schemes' default funds.
People retiring in the UK will on average outlive their pension savings by 10 years, according to research by the World Economic Forum (WEF).
Steps to improve auto-enrolment are uncontroversial and obvious, but the government is dawdling on introducing the necessary changes, argues Jack Jones.
Professional trustees will be expected to apply for accreditation as part of a framework intended to be launched on 1 July by the Professional Trustee Standards Working Group (PTSWG).