There Pension Fund Supervisory Commission (Covip) presented its “Annual Report” at the Chamber of Deputies, illustrating the state of the supervised sectors and the evolutionary prospects. The report highlights a significant increase in members to supplementary social security and returns obtained from pension funds in 2023.
Members are growing: young people are doing well, women are worse
At the end of 2023, the total number of members to supplementary pension has reached i 9.6 millionmarking an increase in +3.7% compared to the previous year. This figure represents 36.9% of the workforce in Italy. THE trading funds have seen an increase in membership +5.4%, reaching 3.9 million. A positive trend is also observed in open funds (+5.9%) and in Individual Pension Plans (PIP) (+1.7%).
Female participation, although still lower than male participation, has seen growth in market forms, with women which constitute the 42.6% of members to open funds and 46.6% to PIPs. An interesting fact is the increase inregistration of young people (up to 34 years), which goes from 17.6% in 2019 to 19.3% of 2023often thanks to the opening of social security positions by families for their children.
Increase in yield, up to 10.2% of trading funds: the data
After a terrible 2022, pension funds recovered strength in 2023, overcoming the revaluation of the severance pay left in the company. THE pension funds, depending on the performance of the markets, benefited from the positive dynamics of shares, bonds and government bonds. The equity sub-funds achieved average returns of 10.2% in trading funds, 11.3% in open-end funds and 11.5% in PIPs, although lower than the return of the MSCI world index, which grew by 22%.
The bond sectors also showed positive performances, with returns of 7.2% in negotiated funds and 4.4% in open-ended funds for mixed bonds. The severance pay, however, saw a revaluation of only 1.9% in 2023, a figure significantly lower than the previous year in which it was revalued by more than 8%.
The numbers of resources, contributions and performances
The total resources accumulated by pension funds at the end of 2023 are equal to 224.4 billion euros, with an increase of +9.1% compared to the previous year. Trading funds hold 30.2% of these assets, followed by PIPs (25.3%) and open-ended funds (14.5%). The contributions collected in 2023 amounted to 19.2 billion euros, up 5.2% compared to 2022.
Annual payments are mainly concentrated in the range between 1,000 and 3,000 euros, but a large portion of members (15.8%) make payments of less than 200 euros. There average contribution of active members is 2,810 euros, with differences between employed workers (2,900 euros) and self-employed workers (2,720 euros).
Future prospects: what Covip expects
The last chapter of the analysis of Covip refers to the challenges that the future will hold, made increasingly uncertain by global geopolitical conditions.
In fact, despite the solidity of the system, structural challenges persist which require interventions to improve the attractiveness and efficiency of supplementary pensions. Among Covip’s proposals is the remodulation of tax benefits and the transformation of deductible contributions into an initial contribution for new workers. Furthermore, in the annual report it is suggested to encourage the accumulation of resources through the transition to a performance taxation system based on the result achieved.
Finally, Covip underlines the importance offinancial and social security education to encourage more informed savings decisions and the expansion of pay-out options, including services that distribute the sums accumulated over a multi-year period.
