Canadian Retirement Savings Plans and Italian Pension Reform

Abstract

Canada has developed an extensive private pension system that accounts for more than half the government assisted resources available for retirement incomes. Private plans in Italy account for less than one percent of retirement resources, but it has recently provided pension reforms to encourage greater use of these plans. This paper examines these reforms in light of Canada's experience with its private savings plans. In general terms the Canadian plans available to firms and individuals are more integrated with one another than is allowed in Italy, and, as well, the private plans in Italy have less flexibility to address both pre-retirement cash needs and the ability to shift retirement assets between portfolio managers. There are also fewer post retirement options available in Italy. The greater choice and flexibility of Canadian plans are seen as attractive features to savers and further Italian reforms that provide these characteristics to retirement savings plans should lead to more rapid growth in Italian private plans.