ITALY – New subscribers to Italian occupational pension funds have risen a “mere” 0.6% in 2003, according to research consultancy Prometeia.

“New subscribers have continued to arrive slowly since the end of 2001, indicating a relatively low level of interest in these products by employees,” the Bologna-based company said. “The annual rate of new members was 3.7% in 2002 and a mere 0.6% in 2003.”

The consultancy puts the occupational pension fund market at 3.9 billion euros as at June 2003, up from 3.3 billion euros in 2002. In 2000 the sector was valued at 1.2 billion euros. At the end of the first six months of 2003, occupational funds had just over one million members, it added.

The comments come in a Prometeia report assessing the outlook for the Italian institutional market.

As at December 2002 the overall value of the Italian institutional market was around 100.89 billion euros, with a total of over 800 investors. The report says the market is fragmentary - with 89 banking foundations, 20 social security agencies and 693 pension funds, 554 of which were set up before reform.

Four new funds - Priamo, Fopadiva, Edilpre, Fondo Poste – were authorized to trade in 2003 while three funds lost authorization after failing to reach the required numbers of members.

As at June 2003, 39 of the 44 funds created had reached operational status, with 29 making investments by allocating financial resources. “Seven are active in the selection of managers and in policy decisions for the allocation of resources,” the report said

“The scale of new members - a negative 0.3% between December and June - is an alarming result, given the potential number of payers into occupational funds, just under 12 million.”

Contributions in the first quarter were “quite modest” at around 700 million euros – though this was up on the previous two quarters. The number of authorized funds was up two to 93.

Meanwhile, the prospects for growth in the open funds market are attracting investors, the report says, with 58 savings companies and 44 banking groups involved. “The market is very fragmented with some funds not reaching a hundred members.”

The number of members of open funds stood at just over 350,000 while collective subscriptions increased to 12.6% of the total. Open funds totalled 1.4 billion euros, up 38.5% on the end of 2002.