ITALY - The €143m Fondogommaplastica has issued a tender for the the management of the sector of the fund destined for workers' final indemnity payments.
The fund is searching for a manager to handle the sector that collects workers' Trattamento Fine Rapporto (TFR). These are the employees' final indemnity payments which historically were made by employers into TFR funds on the workers' behalf.
The pension reform, due to come into effect in January 2007, will force workers to transfer their TFR funds into pension funds. If they fail to chose a fund, their TFR will automatically be transferred into the pension fund covering the industry in which they work.
Italian pension funds have been creating various investment strategies, similar to life cycle funds, in an effort to reproduce the returns made by the TFR funds.
Therefore, management of the TFR sector will prove vital for the success of the pension fund in encouraging workers to transfer their TFR funds.
The Fondogommaplastica is an occupational pension fund for workers of the rubber and plastics industry. The size of the TFR sector of the fund was not revealed.
The closing date for applications is 19 December 2006, after which the administration will review the applications and draw up a shortlist of possible firms.
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