Italian national retirement system in the red

That ain’t good.

Italian Insight

After the controversial draconian measures introduced by the Monti Government, the Italian national retirement system (which is mainly State-run) was supposed to be safe and sound.

However, this year the National Institute managing the system is expected to report a 9 billion euros loss, after a similar loss already declared in 2012.

These are troubling numbers, since all the assets of the Institute amount to 15 billion euros.

Ironically, the Institute is in the red due to a string of Government decisions which were supposed to produce savings. To avoid the cost of having multiple public Entities managing the retirement system, the Institute was in fact compelled by law to incorporate many different pension funds. Such funds were often in the red since they were applying internal rules too favorable to the contributors and pensioners.

In particular, the incorporation of the pension fund reserved to public employees was a hard…

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