The Italian pension funds association – Assofondipensione – is urging parliament and the government to take action to strengthen the second pillar pension system through a new kind of ‘silent consent’ mechanism that would help divert an increasing amount of severance payments towards pension schemes.
The association is calling for the introduction of “a new semester of silent consent” to divert severance payments (Trattamento di Fine Rapporto, TFR) towards pension schemes if workers don’t actively choose to do so, to boost membership in second pillar pension schemes that, as data of pension regulator Covip show, benefits workers.
Assofondipensione is taking a stance on the matter as parliament is currently discussing the possibility of introducing a six-months long ‘silent consent’ period next year by amending the budget law for 2025.
During the six-months period workers would be asked to choose whether to leave their severance pay in companies and, if they don’t disclose their choice, severance payments will be diverted automatically to complementary forms of pensions, without the possibility to overturn the decision, according to reports.
Under current rules, the choice of new employees to reroute severance payments to pension funds is irrevocable, while the choice to leave severance pay in a company can be changed at any time.
Tiziana Nisisi, member of parliament (MP) for the far-right party The League (La Lega), has proposed an amendment to the 2025 budget law to introduce a ‘silent consent’ period starting on 1 April and ending on 30 September 2025.
Walter Rizzetto, MP of prime minister Georgia Meloni’s right-wing party Brothers of Italy (Fratelli D’Italia), has proposed to start the six-months ‘silent consent’ period on 1 January 2025, according to newspaper Corriere della Sera.
The Italian parliament will approve the budget law for next year by the end of 2024.
The review of the ‘silent consent’ rule has to make the mechanism more effective, according to Assofondipensione.
Only €7.84bn, out of a total €31.29bn of total severance payments, were parked last year in pension schemes, while €17.31bn was left by employees in companies, according to Covip figures.
Assofondipensione believes that strengthening the second pillar pension system should become one of the main economic policy goals for the government, president Giovanni Maggi said.
The association is calling for replacement of the the default option foreseen under the current ‘silent consent’ mechanism, from the heavily bond-invested ‘Garantito’ sub-funds to life cycle strategies, a change also backed by Covip, and to give members the option to withdraw capital upon retirement instead of life annuities.
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