La Social Security Itineraries Foundation, of which he is president Alberto Brambilla, presented in recent days the XIII Report on Italian social security systemThe study entitled ''Financial and demographic trends of pensions and assistance for the year 2024'' is as always valuable because – as written in the introduction – it represents today the only available tool capable of providing, in a single document, a overview of the complex social security system, in the broadest sense of the term, of our country and its financing, through a detailed analysis of the basic pension system managed by INPS and Privatized Funds, and of the assistance benefits provided by the public system.
For those who study this subject, the Itinerari Previdenziali report represents a cornucopia of data and information that allows for a sort of full immersion in a universe in which tens of millions of families and millions of businesses operate, draining the largest number of public resources, ever-increasing in line with the country's demographic processes and thus shaping its future. In this article, therefore, we limit ourselves to highlighting: some aspects knowingly running the risk of providing, if not a partial vision, then a limited representation of a subject that is always of great interest.
- A snapshot of the pension system
Pensions classified in a single category, "old age + seniority/early pensions/early retirement," total 11.833.992, including 6.927.582 "seniority, early pensions, or early retirement," of which 66% are for men and 34% for women, and 4.906.410 "old age" pensions, of which 39,1% are for men and 60,9% for women. Total gross annual expenditure for "old age + seniority, early pensions, and early retirement" amounts to €259,17 billion, with the majority currently spent on seniority, early pensions, and early retirement. Men receive 70% of the total seniority/early retirement/early retirement benefits, and women the remaining 30%. Of the total old-age benefits, 47% is paid to men and 53% to women. There are 853.540 disability pensions, of which 58,6% are paid to men and 41,4% to women. Survivors' pensions (reversibility benefits) total 4.155.645, almost all of which are paid to women (86,6%) and only 13,4% to men, who receive 9,0% of the total expenditure (€46.002,5 million).
These initial summary data clearly reveal the main characteristics of our pension system, prompting a rebuke of the many fake news stories circulating unchecked in the debate. First, it is worth noting the closeness of pension entitlements to the labor market of industrial and baby-boom societies, meaning that employment and economic trends, combined with pro-cyclical regulations, have led to a clear prevalence of early retirement benefits compared to the standard requirements for old-age retirement, especially for male workers, the strongest segment of the labor market. This finding is also confirmed in the case of social security disability pensions, which predominantly concern men, while in the case of survivors' benefits and survivor's benefits, the natural effects of women's longer life expectancies are evident.
INPS welfare payments, pensions, allowances, and benefits total 4.298.814 (884.807 social pensions and benefits and 3.414.007 disability pensions and benefits) for a total annual value of €25,404 billion (of which €5,106 billion for social pensions/benefits and €19,28 billion for disability benefits).
As of January 1, 2025, there were 1.974.269 pensions supplemented to the minimum (83,2% paid to women and 16,8% to men) with a total annual amount of €14.810,2 million, of which €9.208,5 million was the calculated portion and €5.601,8 million was the supplementary portion. These are divided into the following pension categories: 1.117.526 old-age and seniority/early pensions (86,7% for women and 13,3% for men), of which 93,4% are old-age and 6,6% are seniority; 180.079 social security disability pensions (57,5% for women and 42,5% for men); and 676.664 survivors' pensions (84,3% for women and 15,7% for men). As of January 1, 2025, there were 1.164.758 pensions with a social supplement (5,5% of all existing pensions). Of these, 408.744 were pensions with a supplement pursuant to art. 38 of Law 488/2001 (the so-called Berlusconi million), 47.798 with increases pursuant to Law no. 544/1988 (Articles 1 and 2), and 708.216 pensions that receive both increases. Pensions with social increases (which can also be supplemented to the minimum) are distributed among pension categories as follows: 11,0% old-age pensions, 1,2% disability pensions, 15,7% survivors' pensions, 42,4% social pensions/benefits, and 29,7% benefits for disabled civilians, with a clear predominance of welfare benefits. The total annual amount of social increases is €3.074,9 million.
These data are very important because they clarify a further misunderstanding that leads to the vast majority of pensioners being considered in extreme poverty by taking as a reference the number of pensions below €1000 per month, so much so that there are calls to identify this amount as the new guaranteed minimum. The data cited, however, reveal the number of cases in which there is a situation of genuine need, where the system intervenes with minimum supplements and social supplements. As can be seen, the numbers of assisted benefits are lower than those of pensions considered low (>€1000), as the individual or couple receives other income. Beware of confusing pensions and pensioners: the number of benefits up to one time the minimum (€598,61 per month in 2024) was approximately 7,596 million, but the pensioners affected were 2.264.759. - Pension calculation systems
2.1- pay regime
The benefits paid entirely under the retributive regime are now a closed group with an expenditure of €126.862,0 million, absorbing 36,7% of the total annual amount (€345.493,6 million) and will be exhausted over time, as this regime ceased on January 1, 2012, with the entry into force of the Monti-Fornero reform.
2.2. mixed regime
The mixed regime is divided into two sub-regimes: a) the mixed regime of the Dini reform which, with 2.438.654 (277.311 more than in 2024) pensions from the FPLD and self-employed schemes, is growing while the retributive ones are obviously numerically decreasing, accounts for 11,53% of the total, with an average age of 68 years (66,8 years for men and 69,2 for women) relatively young, made up of the last baby boomers who did not have 18 years of contributory seniority as of 1.1.1996, but who as of 1.1.2024 have reached the seniority requirements for early retirement or have taken advantage of the numerous advances (Early Pension, Quotas 100, 102, 103, early retirement, Women's Option, etc.) and safeguards put in place in the last decade, this group is destined to grow in the coming years. b) the mixed regime of the Monti-Fornero reform with 1.339.574 IVS pensions from the FPLD and self-employed schemes (6,3% of total pensions) with an average age of 68,9 years (69,2 for men and 68,3 for women), slightly higher than the mixed Dini regime, is always composed of baby boomers, the older ones with many years of contributory seniority in the pure retributive regime, who already had 18 years of contributory seniority on 1.1.1996, perhaps also thanks to the redemption of their degree, with periods of work exceeding the minimum seniority requirements, if anything, retained in employment after 1.1.2012 (entry into force of the Monti-Fornero reform) to fill gaps in work or economically motivated to continue working; Indeed, their average pension amounts, at €2.083,81 per month (€2.273,71 per month for men and €1.659,46 per month for women), are the highest among the schemes covered, primarily in the private sector (€2.364,84 per month on average); this group is expected to decline in the coming years.
2.3. pure contributory regime
As of January 1, 2025, 954.747 IVS pensions (IVS) were paid under the pure contributory regime (just 4,5% of total pensions). These pensions, in addition to the FPLD schemes for private and self-employed workers, also include 616.979 pensions from the separate scheme established on January 1, 1996. Approximately 84% of these pensions are supplementary old-age pensions (517.459 second pensions), with average monthly amounts of €324,39, whose beneficiaries have an average age of 76,7 years (pensioners born on average in 1948). In fact, for the old-age category of the separate scheme, these are supplementary pensions obtainable after reaching the legal old-age age (67) for contributions credited for consultancy or collaboration, but not sufficient to establish an independent right to a pension, alongside the contributions paid into the scheme in which the recipient is a primary pensioner. Instead, the lower average ages of the disability and survivors' categories in the employee and self-employed schemes, averaging 51-52, suggest that they are young people who entered the workforce after January 1, 1996, and who became disabled or died while working, thus having relatively young survivors. It's important to take these clarifications seriously so as not to fall into the trap of considering these second pensions for older workers as if they were the benefits that young workers governed by the contributory calculation will receive upon retirement. - Actual average ages at retirement age. Another insidious one urban legendA common misconception now exists regarding the belief that in Italy, especially after the Fornero reform, retirement is only possible at a venerable age based on the length of time spent working and contributing, without taking into account the years in which one remains in retirement as a dependent (according to the pay-as-you-go financing system) on subsequent generations. Thanks to the combined effects of rising birth rates, early access to employment, and job continuity, baby boomers have been and still are able to reach retirement age from young/old, drawing on long histories of pension coverage and being able to count on an increase in life expectancy (on average, these cohorts remain retired for a period equal to 80% of the length of their working life). In this regard, according to the RGS, the growth in the ratio between pension expenditure and GDP will accelerate to reach 17,1 percent in 2040. This trend is mainly attributable to the increase in the number of pensioners relative to the number of employed people, driven by the demographic transition linked to the retirement of the baby boom generations, only partially offset by the increase in minimum retirement eligibility requirements and the effect of the containment of pension amounts exerted by the gradual application of the contributory calculation system over the entire working life. From 2040 onwards, the ratio between pension expenditure and GDP is expected to progressively decrease with varying degrees, reaching 15,9 percent in 2050 and 14,0 percent in 2070. The rapid reduction in the ratio between pension expenditure and GDP in the final phase of the forecast period is determined by the widespread application of the contributory calculation which is accompanied by the stabilization, and subsequent reversal of the trend, of the ratio between the number of pensions and the number of employed people. This trend is affected both by the progressive exit of the baby boom generations and by the automatic adjustment of minimum retirement requirements based on life expectancy. According to Itinerari previdenziali, in 2024, also due to the effects of all early retirement exit channels, statistically classified in the "seniority/early and early retirement" pension category, the effective average age at commencement dropped to 61,5 years for men (it was 61,8 in 2021, 61,6 in 2022, 61,5 in 2023) and increased to 61,3 years for women (it was 61,3 in 2021, 61,1 in 2022, and 61,2 in 2023); on average for men and women, the effective age for early retirement remained stable at 61,4 years (it was 61,6 in 2021 and 61,4 in the three-year period 2022-2024). Since early pensions are higher in amount (in terms of number, they were lower than old-age pensions in the last year), the average ages at which they start are more important. However, considering the total old-age pension (seniority/early retirement with early retirement and old-age pension), the effective average retirement age in 2024 was 65,1 years. In calculating this gender-weighted average age, the age of men, at 64,7 years (60,0% of the total for both genders), weighs more heavily than the average age of women, at 65,8 years (40,0% of the total for both genders). The latter average female age has undergone a gradual increase in age requirements, which began more significantly in 2014. If we then consider, together with the average effective retirement age for old age and seniority/early retirement, also the retirement age for social security disability, i.e. the average effective age of all exits for direct social security retirement, in 2024 the average effective age drops to 63,5 years for men and 64,5 years for women, with a weighted average for the two genders of 63,8 years. Finally, analyzing the weighted average of the effective ages at the start of all pension categories, including survivor's pensions and welfare benefits, in 2024 the effective average age is 67,4 years; for men the effective average age is 64,3 years and for women, who have a greater presence in survivor's pensions and welfare benefits, the average age is 70,1 years.
