As of January 1, 2007, a new reform concerns 'supplementary pension funds' (legislative decree 252/05).
The reform involves all private employees.
As a consequence, no later than June 30, 2007, all employees having the right to severance indemnity (TFR-trattamento di fine rapporto), must decide whether to apply it towards a supplementary pension fund or leave it with the company. If an employee does not express any choice within the deadline, starting from the month of July 2007 it will automatically be applied to a supplementary pension fund.
This choice refers only to the future severance indemnity amounts, starting January 1, 2007.
The amounts accrued up to December 31, 2006 remain with the company in the same manner as before the reform of supplementary pension funds. Employees hired on or after January 1, 2007, must decide within six months how to apply the severance indemnity fund (the new regulation concerns all those who will be employed in the future and who will have six months to decide on the application of their severance indemnity fund).
The first choice, to leave the severance indemnity with the company, can be revised at any time; the second, to apply the severance indemnity to a pension fund, cannot be revised, and in this case the employee can never change its application.
Employees who decide to leave the severance indemnity fund with the company must communicate it explicitly, by filling out a special form given to the employees by the employer. If no choice is expressed, the principle of 'silent consent' is applied, and the severance indemnity fund will automatically be applied to a supplementary pension fund.
In any case, the choice to apply the severance indemnity to pension funds can be made by filling out the special form provided by the employer.
OPTING FOR A FUND
Workers who wish to apply their severance indemnity towards a supplementary fund and choose a specific pension fund must communicate the decision to the employer, filling out form TFR1 or TFR2.
The severance indemnity is applied to a supplementary pension fund even if the employee does not decide in an explicit way, that is, does not return the forms filled out to the employer. Both in case of explicit choice communicated to the employer, and in case of silence or no choice, the application of the severance indemnity to supplementary pension funds is irrevocable.
Labour unions are organizing meetings to inform workers about the choices and types of pension funds to which they can apply their severance indemnity, if they decide not to leave it with the company (special category funds or closed funds, open funds, individual pension plans). We have published a list on our website with the addresses and telephone numbers of the labour union offices which employees can contact in the event of doubt or uncertainty.
OPTION FOR THE COMPANY
Employees who decide to leave their severance indemnity with the company must communicate their decision to the employer, by compiling form TFR1 or TFR2. If no decision is communicated, the 'silent consent' provision is applied and the funds are applied to supplementary pension funds.
If the employee works in a company with fewer than 50 employees, the company will manage the severance indemnity fund.
If the employee works in a company with at least 50 employees, the severance indemnity funds will be paid every month to the Treasury Fund managed by INPS (NHSS).
In any case, the employee will be paid the severance indemnity on conclusion of employment, as in the past.
After eight years the employee can ask the company for a sum equal to 70% of the severance indemnity accumulated, for medical expenses or as first-time house buyer (for themselves or their children).
Companies with fewer than 50 employees that do not pay the severance indemnity to INPS, can foresee other causes of request for advances on severance indemnity. Companies with at least 50 employees, that therefore pay the severance indemnity to INPS, can foresee causes of request for severance indemnity advances only in the above cases (medical expenses or first-time house buyers for themselves or their children).
CATEGORIES OF EMPLOYEES NOT AFFECTED BY THE NEW SEVERANCE INDEMNITY REFORM
Workers employed in the categories listed above except, obviously, those who have no right to severance indemnity, continue to receive severance indemnity as per before the reform of the supplementary pension funds.