Italian Labourers Participation in Private Pension Plans: An Analysis of Closed Funds Targeting Specific Industries

In spite of the bleak outlook for Italian retirees’ financial security in their foreseeable future, at the end of 2007, according to data supplied by the Supervisory Authority over Pension Funds, only about 19.8% of Italian workers joined a private pension scheme. More worryingly, young labourers, whose public pension replacement rate will be severely penalized by the public pension system progressive downsizing, tend not to vest pension plans with some of their moneys.After shortly presenting an overview of the Italian pension system peculiarities, the paper focuses on the reasons for private pension schemes not being in strong demand. Closed pension funds, whose members are 42.7% of the people joining private pension schemes, furnish a reasonable source of public data in order to further investigate the issue. These plans membership is permitted only upon specific requirements fulfillment: Information regarding enrollment rates is thus significant of schemes popularity among workers because the number of potential members is known.Data concerning closed pension plans targeting specific industries are analyzed in order to relate funds’ ability to attract new members to financial performance, employers’ contribution, investing alternatives granted to members and communication strategy. Targeted populations characteristics, funds’ history and incentives provided by the legislative framework are also considered as control variables.This paper is currently reserved to Carefin sponsors and will be made public on SSRN after a short embargo. Please visit the CAREFIN website to learn more on how to get the paper.