Occupational Pension Schemes

Voluntary participation¹

• Private and public sector employees as well as self-employed persons, liberal professionals, and members of a cooperative society, via ‘closed’ or ‘contractual’ pension funds (CPFs),set up through collective bargaining agreements, including those signed at the company level, implemented either as company pension funds by a single company or as industry-wide pension funds for a specific group of participants² or by regions and social partners for the workforce of a particular region/autonomous province.³
• ‘Open’ pension funds created by financial services companies for a generic group of participants, i.e. the self-employed, when membership is established on a collective basis.
• Incentivised enrolment to closed pension fundswith ‘silent consent’ mechanism.
• Special rules for public sector employees, depending on the legal basis of the employment relationship (collective labour law agreement or statute).⁴

General finances

• Fully funded schemes.
• Financed by contribution payments (of employer and employee), partial or complete transfer of TFR entitlement (as established by law or by collective agreements) and capital revenues.

Contributions rates

• Modalities and minimum contributions are defined by collective agreement, either as a fixed amount or, in the case of private sector employees, as a percentage of the remuneration or particular elements of remuneration (annual amount of the TFR benefit, corresponding to 6.91% of gross salary, or part of TFR); for self-employed persons and liberal professionals contribution is determined as percentage of taxable income; special rules for public sector employees and for particular categories.
• Contributions are usually shared between employer and employee, in particular if participation is based on collectively bargained agreement.

Incentivising strategies

• Contributions are not considered as income subject to mandatory insurance contributions, but the employer has to pay a solidarity contribution corresponding to 10% of the transferred resources, in favour of the statutory pension scheme.
• Tax incentives for insured person: contributions up to EUR 5,165 p.a. (excluding TFR transfers) are tax exempt; after 5 years of affiliation, an increased ceiling (EUR 7,747 p.a.) applies.
• Tax relief for employers related to TFR payments.

• The Pension Funds Supervisory Board COVIP (Commissione di vigilanza sui fondi pensione) supervises the investments and provides rules on information and transparency.
• Closed pension funds: assets managed through companies in the financial services sector (insurance companies, banks and asset management companies); with asset management companies; subscription or acquisition of shares of real estate companies, etc.

• Entitlement is tied to employee’s or worker’s pension entitlement under the corresponding statutory pension scheme, payments before reaching the retirement age are possible under specific conditions; at least 5 years of participation in occupational pension fund.

Pension payments

• Monthly life-long annuity or up to 50% of capital as one-time lump sum payment (exception: 100% lump sum payment in case of low amount).
• Depending on accumulated capital and retirement age.
• Lump sum anticipations possible for various defined purposes; of up to 75% (100% for public sector) of accumulated capital possible to cover extraordinary expenses under specific conditions (e.g. healthcare costs) after a minimum period of participation of 8 years.
• Freely chosen anticipation of up to 30% of accumulated capital (for private sector employees only).

Taxation and social security contributions

• Pension incomes are only partially taxable reflecting the tax paid by the pension fund on its investment returns during the accumulation phase.
• Income tax on 87.5% of the amount.
• No social security contributions.