Cassa Forense, the first pillar pension scheme for lawyers in Italy, will switch to a defined contribution (DC) offering from 1 January 2025, following a review aimed at putting the scheme on a more sustainable financial footing as members’ age and pension payouts increase.
The scheme will introduce a “pro rata” DC calculation system for pension benefits from January, president Valter Militi said.
The first pillar scheme will apply a “mixed system” to calculate the pension benefits of current members, which means that one part of the benefits are calculated through a DC mechanism, based on wages received in the last years of work, up until 31 December 2024, and another part will be calculated based on the DC mechanism, for the period of work after 2024, the president added in a statement.
Lawyers becoming members of Cassa Forense from 1 January 2025 will be entitled to a so-called “single contributory old-age pension”, calculated only according to the DC mechanism, Militi said.
Those enrolled under DC plans are entitled to pensions at the age of 70 with at least five years of contributions paid, and at the age of 65 with at least 35 years of contributions paid, and an amount of benefits that is at least equal to the minimum salary in force for the year, the scheme said.
The Justice Ministry, the Ministry of Labour and Social Policies and the Ministry of Economy and Finance, which supervise Cassa Forense, have finally approved the plan after first rejecting it.
The ministries demanded an immediate transition to pro-rata DC for everyone, split between members and non-members when the new rules would enter into force.
Cassa Forense, instead, proposed to split members into three groups, including those who had accrued 18 years of contributions that remained under the defined benefit (DB) system at the start of the new DC plan, those with less than 18 years of contributions that remained under a mixed DB/DC system, and new members enrolling under the DC system.
This disagreement delayed the DC switch.
Cassa Forense is now switching to DC plans as the number of those entitled to benefits has increased to 30,986, and expenses for pensions went up 11% year-on-year in 2023 to €1bn, it said.
Contributions change
The scheme is also increasing the amount of contributions from 15% to 16% of the net salary in 2025, to 17% in 2026 and to 18% starting from 2027. The income ceiling for 2025 is equal to €130,000, and beyond that sum a 3% contribution continues to apply, it added.
The minimum contribution in 2025 will be €2,750, and the minimum supplementary contribution will be €350. In 2024, the minimum contribution was set at €3,355 and the minimum supplementary contribution was €850.
Members under the age of 35 will pay half of the minimum and supplementary contributions for the first six years of membership. For members who keep working after reaching retirement age, the contribution rate increases to 12% of the net income, and the scheme is reintroducing three-year pension supplements taking into account half of the contributions paid to determine their amount, it added.
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