ROME: Italy is preparing to reform its pension system again to make it more flexible for those who want to leave work early, officials say, and the changes may include ending ahead of time a costly but underused 2018 plan that lowered the minimum retirement age.
With a steadily growing army of retirees, pensions in Italy are a national obsession and one of the most frequently debated topics on television talk shows.
Under the 2018 “quota 100” plan, people can draw a pension if they have paid in 38 years of contributions as long as they are 62 years old - the sum of the two figures giving the “100” of the plan’s name.
The plan was budgeted to cost almost 20 billion euros ($22.2 billion) over three years until 2021, when it is due to expire. But some in the government are pushing to drop it at the end of this year to save money.
With one of the world’s oldest populations, Italy spends more than 16 per cent of national output on pensions, more than any other developed country except Greece, data from the Organisation for Economic Cooperation and Development shows.
This makes it harder for Rome to reduce its debt, which is the second highest in the European Union and drains resources from other areas. For example, Italy is near the bottom of the OECD’s 35-nation league table for education spending.
“Instead of waiting for the natural end of quota 100 at the end of 2021, it would be better to have a replacement solution ready to come into force next January,” Treasury undersecretary Pier Paolo Baretta of the ruling Democratic Party said.
As things stand, when quota 100 expires, retirement rules are set to automatically revert to those imposed in a highly unpopular 2011 reform that raised the retirement age to 67.
The government wants to avoid this by introducing a new system that is less generous than quota 100 but less severe than the 2011 regime, imposed by former premier Mario Monti. — Reuters
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