Country Panel Presentation: Italy - Amazon S3 · Country Panel Presentation: Italy 2016 IGP...
Transcript of Country Panel Presentation: Italy - Amazon S3 · Country Panel Presentation: Italy 2016 IGP...
© International Group Program
Country Panel Presentation: Italy
2016 IGP Regional EMEA Seminar Windsor, May 24-26, 2016
Stefano Pochini - Life Department Sergio Tonero - Broker Sales Department
1
This presentation was exclusively prepared for the attendees of the 2016 IGP Regional EMEA Seminar. None of the contents of this presentation may be copied or disclosed to any other party or used for any other purpose than the one mentioned above without IGP's prior written permission.
© International Group Program
Key Topics
Background Information Pension Health Care
2
Benefit Scenario
Country and Company Info &
Background
© International Group Program
Background Information
• Key Numbers: 14,000 employees 3,000 agencies 6,000 sub-agencies 300 banking branches 17,8 bill Euro of premium (direct and via agency) serve more than 16 million corporate/retail clients
• (SOURCE: BALANCE 2015)
3
Company Info
© International Group Program
Background Information
4
Country Info
Population 2015 60,4 million
Labour force December 2015 25.5 million
Unemployment rate Avril 2015 12.4%
GDP 2015 (EUR) 1,537 Billion
Tax on pers. Income 11,6% of GPD
Inflation 2014 0,1%
GPD per capita 36,196 US$
Source: ISTAT/OCSE 2015
© International Group Program
Key Topics
Background Information Pension Health Care
5
Benefit Scenario
Summary of Social Security
Benefits
© International Group Program
Social Security in Italy
• Italy has always been known for the comprehensive nature of its social security system, in terms of benefits offered, and coverage of all population.
• Main benefits provided: retirement, survivors' and disability pension, sickness and medical care, worker's compensation.
• Employers contributions to social security reach about 30% of EE’s gross salary
• Employers need to provide an additional mandatory termination indemnity (TFR fund)
Generous benefits mainly financed by employers’ contributions.
6
© International Group Program
Public Pension System
• Pension expenditures as percentage of GDP is expected to grow when baby boomers will retire.
Source Dpef
%
7
© International Group Program
Diffusion of pension plan in Italy
• In 2014 the number of pension plans are 6.1 mln with an increase of 5,4%
• Registered contributors to the pension system in 2014 are 19.5% of the total labour force (25.6 mil)
• 73% of the registered pension plan that pay a contribution came from the private sector
(*) Source COVIP (2014)
8
© International Group Program
Registered in a private pension plan
(*) Source COVIP (2014)
Type of pension plan
Number registered
FP Negoziali 1.994.276
FP Aperti 1.055.716
PIP 2.445.984
FP Pre-existing 650.133
Total 6.132.636
- PIP (Integrative Pension Plan) is preferred compared to others (plus 14.6% in 2014)
9
© International Group Program
Economics plan of an Italian Family
• Looking at real investment choices, the first priorities are in: Real estate investment Financial investment
(government bond, private bond, etc)
• Protection does not appear a priority, Insurance (eg. death, accident, sickness) has a strong appeal in a private employee benefits plan
Protection
Pension saving
Other investment (financial saving or real estate)
(*) Source: “Gap protection in Italy” - Research conducted by ANIA
10
© International Group Program
Diffusion of medical and accident insurance
• 4.3 % of the total of resident families in Italy (around 1 mil vs 24 mil), declared that they have an insurance. In the last survey, in 2010, there were 1,2 million (5.5%).
• The most important reduction concerns families where the HOUSEHOLDER is an employee; decreasing from 6.5% in 2010 to 4.4% in 2012.
in the Italian Family
(*) Source ANIA (2014)
11
© International Group Program
Key Topics
Background Information Pension Health Care
12
Benefit Scenario
Summary of Pension System
© International Group Program
An overview of the Pension System
Public pension system
Compulsory and unfunded pay-as-you-go system
Managed by INPS
Supplementary pension in addition
to the public - Industry wide pension funds - Open ended pension funds - Pre-existing pension funds - Personal insurance policies (PIP) - Open ended pension funds (individual membership)
Voluntary pension
Traditional insurance plan
1° Pillar 2° Pillar 3° Pillar
13
© International Group Program
1st Pillar
• In the 90’s the system has been redesigned in order to restore its financial sustainability, taking into consideration demographic trends.
• Before 1995 pension benefits were calculated through an earnings-related formula.
• In 1995 a reform introduced a gradual shift to a defined contribution formula: workers with at least 18 years of contribution at the end of 1995 will
maintain the earnings-related method a pro-rata, mixed regime will be applied to workers with less than 18
years of contribution at the end of 1995 the contribution-based method applies entirely to employees hired after
January 1996
• Seniority pension provision had been tighten up
Background on public pension system
14
© International Group Program
1st Pillar
• In 2004 there was another important reform : they introduced incentives for postponing the retirement pension raising the retirement age: 60 years for men and 57 for women with 35
years of payments, or with 40 years of contributions establishment of the central record of active positions INPS they defined the rules for the development of supplementary pensions
Background on public pension system
15
© International Group Program
1st Pillar
• In 2011 there was the last important reform : It abolished the old-age pension - replaced by EARLY - you can retire
before “old-age” requirements on the condition that one has contributed for 41 years and 1 month (women) or 42 years and 1 month (men); with the contribution requirements increasing annually until 2050.
It abolished the quota mechanism Flexible retirement : the age for the old age pension is a minimum
requirement, each employee can choose to work until 70 years old or when to retire, applying a quota ratio of the capital accumulated with the contribution method.
Background on public pension system
16
© International Group Program
1st Pillar
• In 2011 in that same reform : RAISING THE RETIREMENT AGE
‐ For all workers' pensions will be calculated with the contribution-based system, even for those who would have to make use only of the pay system
• Starting from 01/01/2012 OFFICIALS - men and women - the limit is raised to 66 years PRIVATE SECTOR 66 years for men and 62 for women, that will gradually
rise to 66 years in 2018 SELF-EMPLOYED 66 years for men and 63 and six months for women, that
will gradually rise to 66 years in 2018
• FROM 2021, the requirement is 67 years old for everyone.
Background on public pension system
17
© International Group Program
1st Pillar
• For workers and self-employed men, the retirement age ( subject to adjustment to the increase in life expectancy ) is fixed, as of 1 January 2012, at 66 years
• For employees of the public sector retirement age ( subject to adjustment to the increase in life expectancy ) is fixed, as of 1 January 2012, at 66 years
• The retirement age for female employees of the private sector and self-employed workers will gradually increase, as of 1 January 2012. In 2018 it will be the same as male workers.
Background on public pension system
The current situation: when you retire
18
© International Group Program
1st Pillar Background on public pension system
Worker with pay method
It is the system linked to the salaries of the last years of employment (10 years for employees and 15 for the self-employed). It was valid until 31 December 1995 for those who had at least 18 years of contributions.
THEY WILL RECEIVE AT THE TIME OF RETIREMENT ABOUT 70% OF
THEIR LAST REMUNERATION
Worker contribution method
It is the system linked to all the contributions paid
The current situation: estimation of the pension amount
THEY WILL RECEIVE AT THE TIME OF RETIREMENT ABOUT 50% OF
THEIR LAST REMUNERATION
19
© International Group Program
2nd Pillar
• Fondi pensione negoziali (industry-wide pension funds): occupational plans; independent legal entities (trustee based); membership is only open to employees fulfilling conditions set in the collective
agreements.
• Fondi pensione aperti (open pension funds): established by banks, insurance companies, investment firms and asset management
companies; offer both occupational and personal plans; no independent legal status; assets are required to be separated with respect to
those of the financial company promoting them.
• Fondi pensione preesistenti (pre-existing pension funds): introduced prior to the 1993 legislation; structured as defined contribution and/or defined benefit schemes. All existing DB
plans were closed to new members while many of them have been converted into DC schemes.
Type of Pension Plan
20
© International Group Program
2nd Pillar
• PIPs (personal insurance products) based on life insurance contracts: offered by insurance companies; only individual membership; plans’ assets are required to be separated with respect to those of the
insurance company managing PIPs.
Type of Pension Plan
21
© International Group Program
2nd Pillar Type of Pension Plan
You can join a supplementary pension individually or collectively
Employees
Self-employed and freelancers
Working members of cooperatives and any other category
22
© International Group Program
2nd Pillar
• In 2005 there was an important reform, introduced effective as of 01/01/2007: an additional way of financing, through the use of the future provisions
of the TFR (*) compensatory measures for businesses new tax regime assimilation of the supplementary pension schemes
(*) TFR - Trattamento di Fine Rapporto - is a statutory termination indemnity provided to all employees, the annual amount is equal to the annual salary divided 13.5
Supplementary pension in addition to the public
23
© International Group Program
2nd Pillar Contribution: choice for TFR
The supplementary pension schemes are funded through:
contributions payable
by the worker
contributions payable by employer
(if provided by a possible
agreement between the parties)
conferral of TFR’s provision
also in tacit form (new)
24
© International Group Program
2nd Pillar Supplementary pension system in addition to the public
The rules for workers employees
TFR’S PROVISION the employee has
six months to decide what to do:
1) Waiver of security and leaves the TFR in the company
2) Choose the form of security to target TFR
3) Tacit implies TFR passes to the FPC, or the FPA, or INPS.
25
© International Group Program
2nd Pillar
• When the employees leave the company, they receive a benefit amount equal to the annual accruals revaluated each year, established by the law at rate of 75% of the cost of living increase plus 1,5% fixed
• Company with at least 50 employees pay the TFR annual accruals to social security (INPS), that takes the commitments to pay the benefit to employees
• In this case the benefit is taxed at the average rate applied to the employee’s income during the five years preceding termination
1) TFR recorded by the company
26
© International Group Program
2nd Pillar
• The amount of TFR paid will be considered as contribution in the form of pension chosen by the worker: industry-wide pension funds; open pension fund; personal insurance plan.
• When the employees leave the company, they receive a benefit that is equivalent to all contribution paid, revalued by the management of its assets.
• In respect with the law the employees can ask an anticipation in special case (illness, etc)
2) TFR paid as a contribution to a pension plan
27
© International Group Program
2nd Pillar
• The TFR’s provision shall be paid by the employer to the supplementary pension scheme: to the industry-wide pension funds or to open pension fund; or as last case scenario, to INPS fund,
3) The employee is silent (tacit approval)
28
© International Group Program
2nd Pillar
• When it is due… 1) If there is a national collective
bargaining agreement which provides for a contribution paid by the company (so provide by almost all the national collective bargaining agreements)
2) If the employee pays in to the industry-wide pension funds its voluntary contribution and/or their TFR
• Upon the occurrence of both of these conditions snaps the obligation for the company
Contributions payable by employer
The rules
for the
employer
29
© International Group Program
2nd Pillar
• All workers can freely determine the amount of the contributions at their own expense.
• In the case of individual membership there is no minimum or maximum sizes.
• In the case of collective membership the minimum amount of contributions (Company / Employee) can be fixed by contract or company agreement.
• In any case it may be a fixed amount or a percentage of income.
Contributions payable by worker
30
© International Group Program
2nd Pillar Fiscal advantages
Final withholding tax of 15% - reduced from 0.30 per year in excess of 15% with the maximum reduction of 6% (minimum rate 9% after 35 years of presence)
The yearly contribution of the worker and the possible contribution of the employer are tax deductible from income up to a total of € 5,164.57
The rules
for workers
employees
15% or 23% of tax rate according to the reason behind the request of anticipation or refund (for example health expenses, unemployment, etc … )
31
© International Group Program
2nd Pillar Fiscal advantages
If the contribution is paid by the employer to the fund in favor of the employee and the solidarity contribution paid to INPS, it is deductible from the income
The company only pays solidarity surcharge of 10% on their contributions to the employee
The rules
for the
employer
Deduction of an amount equal to 4% or 6% (for companies with less than 50 employees) of the amount set aside in the TFR for forms of supplementary pensions
32
© International Group Program
Key Topics
Background Information Pension Health Care
33
Benefit Scenario
Summary of Health Care
System
© International Group Program
Overview of Healthcare System
Social Security System
Reason to reform
• Large number of users
• High level of coverages
• The financial impact
The change taken on 1980s • New way of management
• Defined level of service
34
© International Group Program
Healthcare System Reorganisation
Current structure functions
Decentralisation process 1998
Regional Authorities 1992
35
© International Group Program
Healthcare System Regional Authorities
• Quality in terms of local health units and hospitals
• Legislation, management and planning
• Ensure health care to immigrants (1999)
• Essential levels of health care (2001)
Increasing autonomy
Treatment and rehabilitation
Responsibility and planning in preventive activities
36
© International Group Program
Healthcare System Decentralization process
Central: ministry of health
Local: more than 200 local health units
Regional: legislation, management and planning
37
© International Group Program
Healthcare System Public and private spending in E.U.
Public spending % of GDP Private spending % of GDP
Source: The European House – Ambrosetti on OECD Health data 2015
38
© International Group Program
Healthcare System Organisational Structure
Essential levels of health care
Hospital care Local care Community care
39
© International Group Program
% Out of pocket per typology
% Out of pocket spending details
Diagnostics 3,8% Laboratories 4,4%
Visits 15,4%
Dental care 23%
Gynecological care
Source: The European House – Ambrosetti on ISTAT data 2015
Dental care
Diet care
Dermatologic care Ophtalmic care Orthopedic care
Drugs 53,4%
Healthcare System Out of pocket spending focus
40
© International Group Program
Healthcare Delivery System
Different levels and services
hospital care
secondary &
tertiary care
primary h.care &
pharma. service
• general practitioners • capitation basis payment
• list of drugs covered • small co-payment
• public structure
41
© International Group Program
Healthcare System Forecast
Future challenges, new dynamics and the pressure on the welfare system
Ageing of the population and the increase of the involvement of the public structure
Technological development and higher costs
Pressure on the healthcare budget due to the economic crisis
Potential re-emerge of infective illnesses previously destroyed
42
© International Group Program
Thank you for your attention! Key Topics We Discussed:
Background Information Pension Health Care
43
Benefit Scenario
Summary of Health Care
System
Summary of Pension System
Summary of Social Security
Benefits
Country and Company Info &
Background
© International Group Program
www.unipolsai.com
Contact Info
Stefano Pochini
Life Department
0039/ 0554792645 [email protected]
Sergio Tonero
Broker Sales Department
0039/ 0251815195 [email protected]
www.unipolsai.com
UNIPOLSAI ASS.NI SPA UNIPOLSAI ASS.NI SPA