Pension Reforms in Southern Europe: The Italian Experience

Abstract

The pension systems of Italy, Spain, Portugal, and Greece are organized according to the Bismarckian blueprint: ‘corporatist’ schemes of compulsory insurance covering different occupational groups, with different regulations. Historically, Italy pioneered developments by introducing compulsory pension insurance in 1919. Portugal and Greece followed suit in the mid-1930s, while in Spain fully fledged compulsory pension insurance arrived in 1947. Between the 1950s and 1980s, the pension systems in Southern Europe were significantly expanded in terms of coverage and improved in terms of benefits. This chapter discusses the trajectory of pension reform in Italy, the largest country in Southern Europe. It describes the main pension reforms of the first pillar; the efforts for promoting the development of a second, funded pillar; and recent developments under the administration of Silvio Berlusconi. The chapter also examines the gradual transformation of the ‘end-of-contract-payment’ (TFR) scheme.