PROJECT M
 

The Italian lesson

The point at which academic theory meets political reality could be seen in the tears in Elsa Fornero’s eyes. The IMF believes the reforms she implemented have made Italy’s pension system one of the world’s strongest

© Bransch

The Italian lesson

The point at which academic theory meets political reality could be seen in the tears in Elsa Fornero’s eyes. The IMF believes the reforms she implemented have made Italy’s pension system one of the world’s strongest

Fornero’s reforms

As of 1 January 2012, benefits accruing to all Italian workers are calculated using a DC formula. over the medium-to-long term, government pensions will be paid on a DB-DC blend.

Italy’s seniority pension was abolished. By crediting years worked against the retirement age, it enabled funded retirement as early as 56 after 40 years of contribution. no inducement to continue working existed, since by not claiming benefits from minimum retirement age, pension wealth was effectively lost. The retirement ages (now 66 for men, 62 for women) will be aligned over the next five years.

Comments