What’s this story about lower pensions for those who live longer?

The goal is clear: to equalize the retirement benefits of categories of workers who today have a different life expectancy depending on their job and place of work. In other words: distribute pension checks according to the criterion of equality and “adjust” them to the life expectancy of employees. Therefore, the provision of lower pensions to workers who, due to their work and region of residence, have a longer life expectancy than those who are less fortunate, those who live longer. INPS study recently summarized ReporterIt may also come to the Meloni government’s table within the scope of the social security reform, which has been worked on for months. But let’s go in order, try to clarify.

According to the investigation proposed by the National Institute of Social Security, this would help correct a type of injustice in the social security system: essentially, the payment of pensions would be less fair and benefits would be less, without taking into account that the less wealthy have shorter life expectancy. richest. To understand this, it is enough to take a look at the life expectancy of Italians, divided by region or occupational category: there are people who have reached the retirement age of 67 and still have decades of life ahead of them, while others will receive a pension instead of this pension. you get a few tens of monthly payments.

Monthly pension checks do not take life expectancy into account at all: the conversion coefficient (the value that contributes to the calculation of the pension by the contribution method) is essentially the same for everyone. Leaving aside the fate of each individual, it is true that the profession, the health status of the region in which one lives, and the genetic predisposition of the individual are not the same for everyone. According to INPS, we can intervene precisely at the point where the probability calculation is based on well-known data.

The Social Security Institution later explains that the decrease in life expectancy following the increase in Covid-related death rates means that the income of those who leave working life in 2023 may increase. INPS reminded that with the inter-ministerial decree dated December 2021, the contribution coefficients to be used in calculating the contribution quota for the 2023-2024 two-year period were redetermined every two years. At age 67, the coefficient is 5,723 compared to 5,575 in the 2021-2022 two-year period, which is also higher than in the 2016-18 three-year period (5,700). As stated, conversion coefficients are values ​​that contribute to the calculation of the pension and vary from the age of 57 to 71, depending on the age of the worker when he receives social security benefit. It is clear that the conversion coefficients will be higher as the employee gets older. For those leaving at the age of 57 in 2023, the coefficient is 4.270 (in the 2021-2022 it was 4.186), for those leaving at the age of 71 it is 6.655 (in the two-year period 2021-2022 it was 6.466).

Not only that, because the differences between occupations and income classes should also be taken into account. Both affect life expectancy. From the INPS database, as reported by Corriere della SeraAccordingly, it turns out that a retiree registered to the workers’ fund, whether a worker or an employee, expects to receive a pension for an average of 17.6 years. However, a retired former manager registered with Inpdai management will receive an average of 19.7 years of pension. In the case of income, the differences are even more pronounced. According to available data, a retiree in the lowest income group will receive an average of 16 years of pension, and a former pilot in the highest income group will receive an average of 20.9 years of pension. The average life expectancy of the former is almost 5 years shorter.

There is another factor that affects life expectancy and therefore the monthly pension payments a person will receive: the region of residence. INPS gives some examples. While men living in Marche and Umbria have an average life expectancy of 18.3 years after retirement at age 67, the longest-living women are in Trentino-Alto Adige, with an average life expectancy after retirement of 21.6 years. However, for men and women living in Campania and Sicily, life expectancy after retirement drops to 17 and 17.1 years respectively. These data vary from region to region depending on the retiree’s income. The average life expectancy after retirement for men from high-income groups living in Marche and Umbria is 19.4 years. The same goes for women in Trentino-Alto Adige: Those with high incomes have a life expectancy after retirement of up to 22.5 years. However, a low-income Sicilian woman receives an average of 18.8 years of pension.

So the data shows that increasing life expectancy worsens the impact on retirement benefits. For this reason, unions want the coefficients (which are updated every two years) to be prevented from being adjusted for life expectancy. Trying to separate benefits by residence, employment, or even gender (women live longer than men on average) is not easy. But some fixes, such as the one suggested by INPS, could make the current system less unfair.

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Source: Today IT