Italian Cabinet OKs Pension Reform Measure
The reform aims to ease the strain onItaly’s
public finances by encouraging workers to save money for
their old age and to invest the severance pay they receive
upon retirement in private pension funds, according to
media reports.Passed in a Cabinet meeting after
weeks of bickering, the reform plan still must be approved
in Parliament.
Foreign Minister Gianfranco Fini
told reporters that, if approved, the bill’s provisions
would come into effect in 2008. The measure should channel
around 14 billion euro ($16 billion) annually into
pension funds from obligatory severance funds managed by
employers.
At present around 7% of
worker’s compensation inItaly is kept in corporate
coffers until the person leaves the company
. The new legislation completes a reform approved in
2003 that will gradually increase Italians’ retirement
age from 2008 onwards.
Italy’s employers’ association, Confindustria, welcomed the move. “We give an overall positive judgment” of the reform, Director General Maurizio Beretta said after a meeting at Confindustria’s headquarters.
You Might Also Like:
Where Does the Securing a Strong Retirement Act Stand?
Retirement Reforms Included in Key House Committee Budget Language
More Retirement-Related Legislation Introduced
« Social Security, Pensions Leave Two-Thirds of Retirees in Good Shape