As for 2018, a new law regarding pension benefits came into force in Italy. Now the age requirement for accessing retirement funds fixed in Italian legislation increased by five months. Under the new legislation, men shall retire at 66 years and seven months and women at 65 years and seven months. There are sources which mention about the increasing at 66 years and 11 months for all workers, regardless of sex, in 2019.
Generally, the retirement and pension policies are governed by the Constitution, legislation and administrative regulations. Italian people have long enjoyed generous benefits and early pension ages, but there have been a lot of changes in last years, and the sustainability of the pension was harshly affected by the economic crisis. The introduced reforms from the 1990s to 2000s brought a rise in private plans and company schemes, meaning that pension funds have been stimulated through tax advantages offered through reforms.
As Italy’s state pension is defined as a required pay-as-you-go (PAYG) first pillar system, the country’s pension system depends mainly on the public pension system. It is based on the payment of compulsory contributions to INPS (Italian National Pension Institute, supervised by the Ministry of Employment and Social Security) both by employees and employers. There are three types of pensions, directly provided by Italian National Pension Institute:
- Old age pension – an economic value paid to workers who have fulfilled both the age and minimum contribution requirement set by law;
- Seniority pension – a benefit based on a quota resulting from a calculation of the minimum pension age fixed by law to the minimum period of a contribution of 35 years. Being canceled in 2012, this pension was replaced by an advance pension;
- Advance pension – allows a person who is at least 63 years old to opt for early retirement and obtain a pension. This program applies to employees (included public employees) and self-employed workers insured by a special pension scheme (e.g. crafters, small traders and farmers). Those insured by the pension funds for professionals are excluded.
Some factors may determine the increase or decrease of the Italian state pension. This is due to an individual calculation, depending on the contributions that have been made to the state. As a rule, the minimum retirement age is 63 and nine months for women and 66 years for men. It is vital to mention that Italian Government has increased the tax rate to 20% on the annual assets revenue of the pension funds starting from 2014.
Then again, there is a law reward for employees who continue to work up to the age of 70 by delaying their retirement. Moreover, the law limits employers to fire people who have not reached retirement age and others who have chosen to continue to work.
As the Italian culture is one of the richest embodiments of European culture, a lot of retirees from all over the world intend to settle here. They have to drop into the nearest police headquarters and register their presence. Also, they need to show proof that they have funds to support necessary living requirements and apply for a residence permit, within eight days from the arrival in the country.
If you need help and assistance in more details about retirement and types of pension funds, please feel free to contact our office or online, any time you wish.