Abstract

Till now, the building of a reserve fund for the public pension system has appeared precluded in Italy, due to the difficult public finance situation. However, resources could be found in several ways. Two possible sources are a wage component called TFR (peculiar to Italy) and the sums pension funds transfer to the insurance companies that issue the annuities in favor of the retired. This would not require to modify the size and ways currently workers benefit from the TFR, nor it would mine the development of private pension funds, rather favoring it. The envisaged reserve fund would allow to finance a substantial part of the public pension expenditure increase expected till 2033. Some resources could also be used to make future pensions more adequate, as they will drop sharply due to the notional defined contribution system introduced in 1995.