Abstract
Italy, which is sometimes considered a laggard in terms of social and economic reforms, can boast a pension system that is, by and large, functioning sufficiently well in terms of ensuring an adequate purchasing power to retirees and a financially sustainable outlook in the long term, even when taking into account adverse demographic developments.
Highlights
In many countries, pension arrangements are still at the core of the policy debate
The adverse effects of pension rules on labour market participation rates are worrisome in view of the ageing process
While the economic conditions of the elderly have improved in relative terms and their incomes have largely been spared by the recent economic crisis, low-paid and fixed-term contract workers increasingly experience poverty, marginalisation and economic insecurity (OECD, 2019a)
Summary
Lessons From Italy: A Good Pension System Needs an Effective Broader Social Policy Framework. In the new NDC system, workers could choose to retire between 57 and 65 years of age, provided the pension benefit amounted at least to 1.5 times the ‘social pension’ (pensione sociale) and the number of contribution years was at least five. In 2005, the requirements for qualifying for an old-age pension were tightened This was done for all workers irrespective of whether they entered the labour market before or after 1995 (fully NDC), de facto eliminating the significant flexibility in choosing when to retire – one of the features of the NDC reform. Some flexibility with regards to retirement was reintroduced for fully NDC workers, up to a maximum of three years before the ‘normal’ old-age requirement (provided the benefit was at least 2.8 times the social pension). In 2019, the standard age for receiving an old-age pension was 67 years for everyone
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