Deadlines are getting longer and the government is slowing down the race for retirement. At the beginning of the year, some members of the executive brought up the issue of reorganizing the social security system again, and instead of accelerating the debate, they aimed to implement a structural intervention by the end of the legislative period, as is known. As Giorgia Meloni stated in his “beginning of the year” conference, “social security reform must be built in a balanced way: the best possible system, but the same for everyone”. The Prime Minister also reiterated that the issue of social security should be addressed together with social partners. The invitation was accepted by CISL, but the CGIL and UIL unions seem somewhat reluctant as, according to them, recent meetings have not produced concrete answers.
The aim will be an organic reform that rationalizes the various rules that differentiate, in many cases, especially early exits. On the pension front, “harmonizing the system is certainly not simple, especially when resources are scarce, as in the budget law in 2023. But our legislative aim is also to intelligently and carefully lay out what the intergenerational agreement is. Minister of Labor and Social Policies Marina Elvira Calderone said during the broadcast today: “The foundation of an efficient system” Beginning Open SkyTg24He added that there will be some interventions as early as 2024.
When asked whether we would move towards a quota of 41 for everyone, the minister said: “We will consider all interventions to protect those who have to leave work early because they work too much, and those who are still not working among young people to create their own social security positions, as well as the second pillar of pension, the additional pension.” “They also need to look at what changes would be made to make the column more efficient.”
Mock of altitude 103 in the penalized version
Leaving aside the good intentions in words and the announcements made during the election campaign, the reality is that the resources we have at our disposal are very few for now. We understand this from the government’s first concrete intervention in pensions: the re-imposition of the 103-person quota, this time with a penalized version. Early retirement, which is actually quota number 103, becomes even more objectionable in 2024. After the entry into force of the latest budget law, the conditions remain the same: being at least 62 years old and having paid premiums for at least 41 years. But new penalties are coming. Pension access windows will be extended to 7 months (was 3) for private employees and 9 months (was 6) for public employees. This means that if a private employee with 41 years of contributions applies for retirement at age 62, they won’t actually receive a check for 7 months, while a government employee will have to wait 9 months. An “innovation joke” that the unions fighting over these and other points of reform have not sufficiently digested. So much so that, according to Uil, we can now legitimately speak of “103 and ¾ quota”.
Additionally, the amount will be recalculated using the contribution margin method, which means it will be lower for all years you worked before 1996. And finally, a maximum ceiling of around 2,500 euros gross (four times that) will be set. Minimum pension) until you reach the age of 67. In short, it is a fact that quota number 103 has become a more punitive retirement advance system than last year.
Idea for a contribution method for everyone
Looking ahead, the clear intention of this organic reform is the general adoption of the contributory method applicable to all types of pensions before the old age limit. Regarding early retirement, we know that the upcoming reform will be inspired by the temporary measures included in the budget law approved by the Turkish Grand National Assembly at the end of December 2023, which connects all early retirement channels to the contribution method. The contribution calculation method relates contributions paid (and fictitiously capitalized at a growth rate dependent on the performance of the economy) to life expectancy at retirement. The aim is to standardize the rules as much as possible.
What about those who are already included in the bonus system? The reform also looks at full-contributory workers (i.e. those in business since January 1, 1996) and especially young people, to provide greater social security coverage. Following easier access to old-age pensions, the government aims to make additional pensions more attractive, primarily for people under 35: this option is currently deprived of new benefits due to scarcity of resources.
Matteo Salvini’s Union continues to insist on the adoption of the 41 quota, that is, the possibility of leaving the job with 41 years of salary, regardless of age. It is an option that has not been ignored for now and may be revisited when the table reopens with the social partners. In any case, even if approved, quota 41 will be necessarily linked to the contribution method. So what will happen in 2025? If there is no reform yet (or quota number 41, which the Union has been pushing for, is not accepted), the government will have to decide whether to approve quota number 103 in the current format for another twelve months or move to quota number 104. he had already glimpsed in early drafts of the current maneuver.
But the picture is bleak, first of all, because of the exorbitant spending on pensions. In the latest dossier of the government’s general accounting on social security, it is estimated that pension expenditures will constitute 17% of GDP in 2040, trending faster than the current trend. To date, the INPS 2024 budget shows that the institution will pay expenses of 310.7 billion for retirement benefits next year, an increase of 5.19% compared to 2023.
Who will leave their jobs in 2024 and how?
While we await the reform, which this government wants to complete by the end of the legislative assembly, the current exit tools remain in force, which will concern a very limited audience in 2024 due to the restrictions imposed. The numbers for the social bee and women’s option for the new year already seem clear: there are 14,700 new accesses predicted for 2024, with the social pension advance increasing the age threshold to 63 years and 5 months. and is also affected by the increase in age requirements through a special channel for female employees. However, with quota number 103, only 17 thousand outflows are foreseen, and this depends on the recalculation of the appropriation contribution and the ceiling of four times the minimum payment.
These very small numbers have been reached due to increasingly narrowing access requirements. Consider the case of the social bee. Introduced on an experimental basis in 2017 and subsequently expanded several times, it is a temporary, selective welfare institution available to workers who enter certain situations, leave work before the usual requirements, and receive “bridge” benefits until traditional thresholds are reached. Approximately 110 thousand people used this vehicle, with an average age of 64. It’s a similar story for the women’s option, which was created in 2004 and expanded year after year: 174,535 people signed up for this early exit channel between 2010 and January 1, 2023; This amounts to 16.3% of the total early retirement benefits paid to workers.
Increasingly stringent limits over the years have significantly reduced the number of people connected to these early retirement exit options and thus the burden on public accounts. Will it be enough to regulate accounts and reform pensions through a structural intervention by the end of the legislative period, as promised in the election campaign? Only one thing is certain: Time is running out.
Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
