Keywords: Pension Adequacy; NDC Schemes; Social Security; Welfare; Italy.
Actuarial neutrality is the raison d'être of NDC pension schemes, a version of which was implemented in Italy in the mid '90s. Albeit desirable, actuarial fairness is not generally regarded as one of the main objectives of social security systems; rather, poverty protection and income maintenance are. The first part of this article is concerned with providing an understanding of what pension adequacy is and what its main indicators are. The second paragraph illustrates how Italian pensioners fare in comparison to their European counterparts in terms of pension adequacy, both today and according to projection exercises. The third and final section offers a brief description of the main features of NDC schemes; it examines the possible interactions with some aspects of the Italian labour market and discusses the effectiveness of the automatic adjustment of pensionable age to changes in life expectancy as a tool to face adequacy challenges in the future.