Pensions, the picture is bleak: spending is rising, what will happen in 2024?

Inflation and early exits drive retirement spending. It is currently at 16.1% of gross domestic product (GDP) and will reach 16.2% by the end of next year, according to the forecast in the economic and financial document (Def). One point more than recorded in 2018.

Def points out that, with the effect of the recession, pension expenditures increased (at least in proportion to the wealth produced) in the three-year period of 2008-2010, but continued to grow in the following years.

Starting in 2013, “the ratio between pension expenditures and GDP is 15.2 percent in 2018 for about five years, if a more favorable growth trend and the gradual process of raising minimum requirements for access to retirement continues,” the document says. But Covid is causing the GDP to collapse and so the percentage goes up to 2020 and then falls again thanks to the recovery in the gross domestic product in the following years.

According to Def, “this trend is also strongly conditioned by the implementation of social security reforms (i.e. Quota 100) that place a heavy burden on the budget,” while “projections ignore the effects of significantly more indexation. Benefits attributable to the substantial increase in the forecasted inflation rate recorded in section 2023”.

To these effects should be added those resulting from Quota 102, which in any case are “significantly more controlled” than those produced by Quota 100. However, the result isn’t very encouraging: From 2018 to date, retirement spending has depleted almost a percentage point. GDP in absolute terms, an increase of about 50 billion. It’s certainly not good news for a country that has been at the top of the OECD rankings for years in social security spending, which is certainly high relative to the wealth it produces.

41. Quota postponed, 103. Quota extension almost certain

In this context, it’s hard to imagine a more generous pension reform than the one currently in place. So the scenario is this: The measure or Quota 41, which the league has been working on for years, will be postponed to a (re)determined date. The hypothesis of leaving work early regardless of age with a contribution margin of 41 years Def. “You can’t make 41 quotas with a few billions, it’s clear,” said Riccardo Molinari, party parliamentary group leader, on Radio 24. How can we approach this goal, which is the same plain tax rhetoric”. At this point, the most likely hypothesis is that Quota 103 will be approved for another year. We’ll see.

Source: Today IT

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