The Social Security in Italy Project Communicate October 2006.

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The Social Security in Italy Project Communicate October 2006

Transcript of The Social Security in Italy Project Communicate October 2006.

Page 1: The Social Security in Italy Project Communicate October 2006.

The Social Security in Italy

Project Communicate October 2006

Page 2: The Social Security in Italy Project Communicate October 2006.

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