Italy introduces automatic enrollment in supplementary pensions for new private‑sector hires

Effective 1 July 2026, Italy's 2026 Budget Law (Law no. 199/2025) reforms the supplementary pension system for private‑sector employees. New hires are automatically enrolled in a collective pension fund, with their accrued severance pay (TFR) and employer‑employee contributions allocated to the fund unless the employee opts out within 60 days.

If the employee does not act, the default fund is the one covering the majority of workers in the company; if no collective agreement exists, the residual fund defined by the Ministry is used. Workers who are not on their first contract must inform the new employer of their chosen fund within the same 60‑day window; keeping the TFR with the employer is allowed only when the previous fund balance has been fully redeemed. The rule applies solely to new private‑sector hires; public‑sector staff and domestic workers are exempt. A tax exemption on contributions applies to low‑income earners. The reform aims to increase retirement savings in a country facing an ageing population and limited future public pension benefits.