The Italian pension system really has two main pillars and at least in theory a third private pillar:

  1. Public pension system, consisting of a compulsory pay-as-you-go scheme;
  2. Pension Funds (groups and individual) based on the defined contribution scheme with specific rules (also fiscal)
  3. Supplementary pension schemes but without specific rules (also fiscal) – for instance private life insurance policies.

First pillar:

Public pension amount is determined by a contributions-based scheme. The main types are retirement pension and old age pension; for both the eligibility requirements differ.

Second pillar:

Consisting of pension funds to which workers enroll collectively, but also as individuals, depending on the funds, and by voluntary membership, based on the defined contribution scheme. Financial management is assigned to institutional managers. There is a specific supervisory authority (COVIP). Three main types:

  • Occupational pension funds, destined to a specific group of people, regulated by collective agreement.
  • Open pension funds, offered by banks, insurance companies, SGRs and SIMs. No limitations to specific categories of workers, hence membership is not restricted to a specific group. These funds are also open to individuals.
  • Individual supplementary pension schemes (PIP) through insurance policies offered only by life insurance companies.

Specific rules concern the second pillar, including significant tax breaks.

Third pillar:

Supplementary pension schemes (groups and individual) but there are no specific rules or tax breaks; for example, private life insurance policies. So, at the moment, it is not so developed.