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Unleashing The Power Of The Perfect Storm

The black year for the financial markets caused double-digit losses for the returns of Italian pension funds. Even pension managers have had very few assets in which to take refuge despite the diversification in the real economy, which however is recent and above all the benefits can be seen in the long term since these are illiquid assets. The fact is that looking at 2022 the contractual pension funds, as emerges from the survey of MF-Milano Finanza which collected the returns of the category sectors, the performances went into the red (the average is -8.7%). The same trend in open pension funds where the average result stood at -10.4% (Fida data). Given the difficult market conditions and the inflation boom, it was impossible to keep up with the revaluation of the severance pay, the classic comparison between the performance of the capital invested in pension funds and the liquidation that remains in the company (the alternative to enrollment in pension funds which takes place precisely by paying the liquidation).

The severance indemnity won hands down by achieving a yield of +8.2% in 2022, based on provisional inflation data, thanks to the record price increases of 2022: in fact, it appreciates by a fixed 1.5% per year plus 75% of the Istat inflation index (the one acquired for 2022 is 8.1%). Moreover, the return on severance pay has a lighter taxation than pension funds: the rate is 17% compared to 20% for the latter. «After the announcements of the ECB in mid-December, the curtain has fallen on the annus horribilis of finance. It is simplistic to liquidate 2022 of the financial perfect storm by dwelling on the pre-Christmas episodes: similar attention should be paid to the opposite dynamic which in these days heralds a 2023 of recovery to the most optimistic ones “, says Paolo Stefan, director of Solidarietà Veneto, the negotiating fund of the region Veneto.

Of course, returns must be judged over the period of pension provision which is long-term, and a figure like that of 2022 is a serious blow especially for those who are close to retirement and have less room to recover. While for those who are at the beginning of their career and are considering whether or not to join the supplementary pension scheme, the discounts allow you to enter at lower prices. And good news arrives precisely on the membership front, despite the inflation that threatens the ability to save: «Interesting signs are arriving from the local area: in the worst financial years, the number of new members registered with Solidarietà Veneto is the highest ever, except than in 2007 silent assent: 60% are thirty-year-olds whose attention is directed more to the outlook than to the 2022 performance», underlines Stefan. From the Covip data at the end of September it emerges that the total enrollments in pension funds in Italy are 10.1 million, an increase of 410 thousand units (+4.2%) from the end of 2021. (all rights reserved)

France and the UK (calmly) Raise The Age

More than ten years after the Fornero reform which since the beginning of 2012 had abruptly raised the retirement age from just over 60 to 66 (now 67), France and Germany are also following Italy’s example. In reality, Paris has already been trying unsuccessfully to reform pensions for years, given the weight on the public accounts of social security costs in the presence of a trend towards demographic aging, considering that France has one of the lowest retirement ages among industrialized countries. Now President Emmanuel Macron is trying again and is preparing for a controversial pension reform. The executive is aiming for a progressive increase in the age for retirement from the current 62 to 64 against the 65 initially budgeted. But the reform will only take effect from 2030. In the United Kingdom the bar is 66 years old. The country has already planned increases up to 68 years by 2046, but now the government wants to bring the increase forward to 2030-32. In Europe, only Italy, Greece and Denmark have a retirement age of 67 (old age), all the others earlier.

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