The Social Security in Italy Project Communicate October 2006.
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Transcript of The Social Security in Italy Project Communicate October 2006.
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The Social Security in Italy
Project Communicate October 2006
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LawSocial Security “1st pillar”
Basic pension is covered by D.L. 503/1992 and L. 335/1995
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Financial structure
Pay as you go
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Social security contribution
Total percentage: 32,70%Of which:For employers 23,81%For employees 8,89%
Of which:For social security benefitsFor assistance benefits
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The Income Tax on the annual salary
From 0 to 26.000 23%
From 26.001 to 33.500 33%
From 33.501 to 100.000 39%
Over 100.001 43%
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The impact Income Tax on the annual salary:
EXAMPLE: ANNUAL SALARY 40.000 (23% TILL 26.000 = 5.980 + FROM 26.001 TO 33.500 (33%)=2.475 + FROM 33.501 TO 40.000 (39%)=2.535 Total=10.990 (average 27,47%)
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Typology of Benefits
Life annuities
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Form of pension provided for
1. OLD AGEF 60 – M 65
2. SENIORITYAGE F and M 57 years old (from 01/01/08 60 years old) and 35 contribution years (years of job);Or, 39 contribution years (from 01/01/08 40 contribution years)
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Form of pension provided for
3. SURVIVORS’BENEFITS
4. DISABILITY
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The substitution rate
The ratio between pension and the last salary is 80%
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Pension adjustment
Indexation to inflation or cost of living
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State Pension expenditure
13,5% of GDP in 2001 it will rise to 15,7% in 2040 if no further reforms
are taken
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SUPPLEMENTARY FUNDS (2nd Pillar)
THE 98,3% OF THE ITALIAN BANKS (2004) HAVE SUPPLEMENTARY
FUNDS ARRANGEMENTS
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SUPPLEMENTARY FUNDS ARE:
OPTIONAL
COMPANY FUNDS
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TIPOLOGY OF FUNDS
PENSION FUNDS
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SOURCES OF SUPPLEMENTARY FUNDS
COLLECTIVE AGREEMENTS (NATIONAL LEVEL & COMPANY LEVEL)
COMPANY REGULATIONS
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FINANCIAL SYSTEM
DEFINED CONTRIBUTION
FUNDED
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FINANCIAL SYSTEM
CONTRIBUTION:
TOTAL PERCENTAGE 4% FOR THE EMPLOYERS 2% FOR THE EMPLOYEES 2%
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FORM OF PENSION PROVIDED FOR
OLD AGE:1. AGE
2. CONTRIBUTION
3. DISABILITY
4. SURVIVOR’S BENEFITS
5. ILLNESS
6. LABOUR ACCIDENTS
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BENEFITS
MIXED WHEN YOU RETIREDEXEMPTION OF CONTRIBUTIONS AND TAXATION OF INCOMES AND BENEFITS (2% Employer 2% Employee)In case of TERMINATION of the EMPLOYMENT RELATIONSHIP the WORKER can REDEEM HIS PENSION ENTITLEMENT or transfer HIS position TO ANOTHER FUND
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MAIN PROVIDERS
Fund asset management is entrusted to qualified financial intermediares:
savings, management companies, banks, stock brockerage
companies and insurance companies
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Federazione
Autonoma
Bancari
Italiani
International & Projects Department
“Communicate Project”
October 2006