Is it possible in Italy, to choose between a 'closed' pension fund (created through a trade union agreement) and an 'open' one (created and managed directly by a bank, an insurance company or another money-manager)? This is a dilemma which many Italian employees and employers are facing. Now there is the first example of where the alternative of an open pension fund has been chosen.
The company is Jabil Circuit, based in Stezzano near Milan, which is the Italian operation of a US multinational, headquartered in Florida. Last August, Jabil bought the Hewlett Packard factory in Stezzano and in the process inherited 230 new employees. These employees used to benefit from the previous HP pension fund, invested through a life insurance policy with Assicurazioni Generali. According to Italian law, by continuing withthe existing pension fund, they would maintain some fiscal privileges making it possible to deduct pension fund contributions from gross income. But the workforce should have gone into Cometa, the 'closed' pension fund dedicated to the metallury and mechanical sector. The fact is Cometa is not a flexible scheme, as it does not allow different rates of contributions from different companies. Under Cometa, the employers' and employees' contributions are both 1% of the salary, plus 18% (100% only in the case of 'new' employees) of the TFR (trattamento di fine rapporto), the Italian leaving indemnity arrangement .
By contrast, the HP pension scheme's contribution rates were 1.35% from the employer, up to 5% from the employee and up to 100% of TFR for all employees. Jabil wanted to guarantee the same pension benefits, so they signed a deal with the local trade unions in order to invest all the contributions in an open pension fund, through a collective agreement. With the assistance of an adviser, Jabil selected the pension fund managed by SimCogef , the joint venture of Flemings, Banca Commerciale Italiana and Generali. More than 100 em-ployees agreed to enter the fund and most of them chose the two equity sections of the fund's four sections.
The national trade unions and some pension advisers comment that the Jabil strategy is illegal, because if an employee is in an industry where a closed pension fund has already been created, then there is an obligation to enter this fund, otherwise the fiscal privileges will be lost. But others disagree. The problem is that Cometa , like all the other Italian closed pension funds, is not operating yet, even so many months after their authorisation. The complexity and size of the schemes, combined with Italian burocracy, are slowing down their take-off. For example, last June Fonchim, dedicated to the chemical and pharmaceutical industry, completed the selection of the six investment companies which will manage its financial assets; but only at the end of last month did the investment agreements obtain the approval of Covip, the Italian pension funds supervisory authority. So Fonchim can start to invest its cash at last. With such delays, many companies - particularly small and medium sized ones - are thinking of following the Jabil route. Maria Teresa Cometto

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