The Government is considering a new proposal as part of the 2025 pension reform: to allocate part of the severance pay (severance pay) to pension funds. This measure aims to offer greater pension security, especially for young workers. In this article, we’ll explore the details of this proposal and the other upcoming news for the pension system
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Severance pay in pension funds from 2025: What does the Proposal provide
Among the changes under discussion for the 2025 pension reform, the proposal to allocate 25% of severance pay to pension funds stands out. The idea, promoted by the League, is to allow workers to allocate part of their severance pay to a pension fund, in order to increase their future pension benefit. This measure is particularly aimed at young people under 35, who have often paid less contributions and could benefit from a supplementary pension
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The Undersecretary of Labor, Claudio Durigon, emphasized the importance of this proposal as a tool to guarantee stronger social security coverage for young workers, in addition to the compulsory pension.
How Paying Severance Pay into Pension Funds Would Work
If approved, the proposal to allocate part of the severance pay to pension funds will work automatically. Workers who opt for this solution will see 25% of their severance pay allocated directly to the pension fund, with the aim of increasing their pension allowance. This measure could be accompanied by the possibility of accumulating compulsory pension contributions with those of supplementary pension provision, allowing, in some cases, the retirement age to be brought forward by three years
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Other News from the Pension Reform 2025
In addition to the severance pay proposal, the Government is considering other measures for the 2025 pension reform. Among these, the confirmation of Quota 103 with reduced amounts and a weakened version of the Women’s Option. In addition, several proposals are being evaluated relating to the Quota 41 pension, even if the introduction of a Quota 41 for everyone seems less and less likely
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With the limited resources available for 2025, the Government may have to make difficult choices, reducing options for early retirement and focusing on other fiscal priorities such as cutting the tax wedge and reducing personal income tax.
The proposal to allocate part of severance pay to pension funds from 2025 represents one of the possible solutions to strengthen the pension security of workers, especially the youngest. However, its approval and implementation will depend on the outcome of the ongoing discussions on the 2025 pension reform. As more details emerge, we’ll keep you updated on
final decisions.
