Private pension development in Italy, 1993-2018

What is it about?

A latecomer to supplementary funded pension provision, Italy’s multi-pillarisation plan was launched in the 1990s under extremely adverse conditions. Supplementary schemes were expected to achieve universal coverage relying primarily on second pillar occupational pension funds. Twenty-five years after its launch, the comprehensive plan can hardly be called successful with respect to both coverage and the relative importance of second and third pillar institutions. Extreme variation in coverage rates between occupational categories and across economic sectors suggests, however, that these developments cannot be merely interpreted as a consequence of institutional resilience and path-dependent dynamics. The article applies an ‘actor-centred institutionalist’ framework to respond to three main questions. What explains the still limited coverage of supplementary pillars in Italy? What factors account for the prominent role played by third pillar pension schemes in contrast to policy-makers’ original intentions? Which factors allow us to understand the significant variation in coverage across both occupational categories and economic sectors?

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Why is it important?

The aricle shows that pensions arrangements in Italy should be re-designed by taking into account: i) the failure of the reform plan of the 1990s; ii) increased labour market flexibilisation; iii) regulatory changes in the public pension pillar. The trade unions should be particularly concerned about the need of such re-design.