Italian complementary pension funds have continued to cut down their allocation to fixed income, trimming it last year by 2.5 percentage points to €94.8bn, according to the annual report of the country’s pension regulator, Commissione Di Vigilanza Sui Fondi Pensione (COVIP).

Investments in government bonds decreased from 37.3% to 35.5% year-on-year in 2021 to €62.6bn. Allocations to Italian government bonds fell from 17.6% to 16.8%, growing however in terms of value to €29.6bn in 2021 from €28.5bn in 2020.

Italian complementary pension schemes have increased the total amount of investments in 2021 to €174.4bn from €161.7bn in 2020.

Other debt securities made up 18.2% of investments last year, while equities made up 22.6% – up from 19.6% in 2020. Additionally, 13.3% was invested in UCTIS, 2.7% in collective investment schemes, 1.2% in real estate collective investment schemes, 0.6% in real estate, 0.1% in real estate companies, 1.2% in insurance policies.

Investments in the Italian economy totalled €40bn last year, increasing from €38.6bn in 2020 but decreasing in percentage from 23.8% to 22.7% of the overall total, largely due to the decline in investments in Italian government bonds, the report stated.

Assets in complementary schemes grew by 7.8% to €213.2bn last year, equalling to 12% of the country’s GDP, according to COVIP. Contributions increased by 6.1% year-on-year in 2021 to €17.3bn. The average contribution of a member amounted to €2,790 last year, compared with €2,740 in 2020.

Aggregate returns, net of management costs and tax, were on average positive, COVIP said in the report.

Industry-wide pension funds (fondi negoziali) returned 4.9%, open pension funds (Fondi pensione aperti) 6.4%, and unit-linked individual pension plans provided by life insurers (PIPs) PIPs 11%. The severance pay schemes (Trattamento di Fine Rapporto) appreciated last year by 3.6%.

First pillar funds (casse di previdenza) held assets worth €100.7bn at the end of 2020, a 5% increase compared with 2019.

The number of members in complementary pension funds increased by 3.9% year-on-year in 2021 to 8.77 million. The number of members in industry-wide pension funds was 3.36 million last year, showing a growth rate of 5.8%, back to the levels prior to the outbreak of the COVID-19 pandemic, the regulator said in the report.

Open pension funds counted 1.69 million members in 2021 and the “new” PIPs 3.44 million, up 6.5% and 2.9%, respectively.

TFR funds paid a total of €7bn for supplementary forms of pensions in 2021, increasing by €422m compared with the previous year.

The number of pension schemes and PPIs has continued to decrease in 2021 to 349, including 33 Fondi negoziali, 40 open pension funds, 72 PIP and 204 pre-reform pension funds. In 2020 the number of complementary pension schemes and PPIs was 372, and 380 in 2019.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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