LUISS Open: Why is everyone badmouthing the Fornero reform?

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LUISS Open Riforma Fornero

Everyone is talking about it, but nobody is doing away with it. This is the destiny of the Fornero reform of pensions. Although unpopular with all political forces, five years after its approval, no government has been able to change the structural innovations the Fornero reform has introduced into our social security system, from raising the retirement age to abolishing old-age pensions.

The various measures that have been taken in this field, from the so-called Women's Option, EPA or Social EPA, on one hand have been useful in mitigating the serious consequences of the drastic increase in the retirement age to 66 years and 7 months for some categories of workers, while on the other they have certainly not revolutionized the structure of the reform itself. And the same considerations apply to the amendment, just approved in the Senate, to Budget Law 2018, with which the increase in the pensionable age to 67 years has been scrapped for heavy-duty jobs, as per the decree of the Ministry of Economy and Finance, published in the Italian Official Gazette no. 289 of 2017.

As in the case of the Women's Option and EPA, the revolutionary proclamations of the majority of political forces about the need to abolish the Fornero reform have also resulted in the adoption of measures which ultimately cause very limited exemptions from the framework of the reform itself. The old rule for adjusting the retirement age and the new election campaign But first things first. The decree in question, which raised to 67 years the retirement age previously set by the Fornero reform to 66 years and 7 months, was introduced to implement the principle of automatic adjustment of the retirement age to life expectancy.

This is a fundamental principle that ensures the preservation of a pension system, as it directly correlates social security benefits with life expectancy, and it had been introduced into our system several years before the approval of the Fornero reform. Its precedent is in fact art. 1 of Law no. 247 of 24 December 2007 (known as the Prodi-Damiano reform), which introduced the principle of calculating coefficients for transforming the contribution amount on the basis of life expectancy, which was subsequently taken over and modified by the Berlusconi Government with the articles. 22-ter, paragraph 2 of Legislative Decree No. 78 of 2009 (the so-called Sacconi rule) and no. 12 of Legislative Decree. No. 78 of 2010, which provided for the automatic adjustment of the retirement age to life expectancy in its final wording which was finally picked up by Article. 24, paragraph 13, of Legislative Decree. No. 201 of 2011 of the Fornero reform.

Thus, when life expectancy began to rise again by five months, after a year-long stop in which life expectancy had declined, and the Italian Ministry of Economy and Finance issued the decree to adjust retirement age accordingly, a scathing barrage was opened up by all political forces, including those who had voted in favor of the Fornero reform, as they immediately declared themselves opposed to raising the retirement age – even more so because the pre-election period was beginning.

Read the article on LUISS Open

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<p>An essay by Professor Michel Martone on the current Pensions Act</p>
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