Third Report on the Italian pension system - Financial and demographic trends of the pension and welfare system in 2014
The Report on The Italian pension system. Financial and demographic trends of the pension and welfare system is the ideal follow up of the reports published by the Pension Expenditure Evaluation Unit (Nusvap), established under Act n. 335/95 (The Dini Reform) and dissolved in June 2012. Each year, Nusvap sent a report to the Minister of Labour, who then submitted it to Parliament. The last report was published by this unit in 2010; the III Report follows the ones related to the pension system in 2012 and 2013; it provides an overview of the situation in 2014, with medium and long term projections. The aim is to provide the Government and the istitutions with highly relevant information in Italian and English that has no longer be available since Nusvap ceased to exist.
The III Report relies on the data of pension funds' accounts to illustrate the trends of pension expenditure, contribution revenues and balances of the Italian compulsory public and private pension schemes. The Report uses some indicators to describe and evaluate the trends of all compulsory pension funds, that is the public schemes integrated into INPS, the public pension institution in Italy, and the privatized schemes for professionals set up under L.D n. 509/1994 and L.D. n.103/1996.
All these schems are analysed in terms of their contribution revenues and benefit expenditure and of their main variables: number of active members, number of pensioners, average contributions, average benefits; these parameters determine their current and medium/long terms balances.
The Report provides the projections of the compulsory pension system also in terms of its total expenditure/GDP ratio in 2014 and in the short, medium and long term and of its financial sustainability and adequancy of benefits.
In addition to the themes investigated by Nuvasp, the Report analyses the trends of the Welfare Benefit Scheme (GIAS) and of the Temporary Benefit Scheme (GPT) for the income support measures financed by enterprises and by general taxes so as to finalize the evaluation of the overall pension and welfare expenditure; it calculates the substitution rates of the system with projections for different career paths and economic scenarios; it provides a detailed picture of different types of pension and welfare benefits with their geographical distribution and an insight in the privatized schemes. Finally, the Report gives a qualitative and quantitative review of the complementary and supplementary welfare benefit system and of the main amendments and proposed changes to the regulatory framework in 2012/2014.