Italy considers newborn pension fund and retirement flexibility

Italian government officials and social security leaders are discussing several proposals to ensure the long-term sustainability of the national pension system. A central initiative involves creating a “third pillar” pension fund designed for newborns. This “savings piggy bank” would be initiated with a small contribution from the State, followed by voluntary contributions from family members and eventually the beneficiary once they enter the workforce. This model, inspired by systems in Germany, aims to leverage compound interest over several decades to bolster future retirement incomes.

In addition to the newborn fund, Labor Undersecretary Claudio Durigon has proposed increasing flexibility for workers to retire at age 64, provided they transition to an entirely contributory calculation system.

Giovanni Liverani, President of Ania (the insurance association), has expressed support for these measures, noting that the insurance sector is ready to participate. He emphasized the importance of competition between public institutions like INPS and private pension funds to ensure higher returns and management efficiency. The proposals are being evaluated for potential inclusion in the upcoming budget law.