In Ridley Scott's film "The Duellists" (1977), two Napoleonic officers challenge each other to a duel every time they happen to meet over the course of several years. This is what happens in our country when we deal with the subject of pensions that, in the budget maneuver for the current year, has created some problem to the majority and the government. But it will create others, with any majority, whenever it returns to the agenda.
Indexation to life expectancy and its suspension
The application of a provision essential for the budget law has been inserted surreptitiously (because, as we will see, there was no need for it) sustainability of the pension system, after the period in which it had been suspended ended at the end of 2024. This is the'biennial indexation of age and contribution requirements of the retirement of old age and seniority to the increase of thelife expectation, a measure introduced in 2010, revised in 2011 by the reform Fornero, applied without drama or protests with the related updates in 2013, 2016 and 2019, which tightened the requirements, respectively by three, four and five months.
Then, in 2019, Legislative Decree No. 4 blocked the mechanism at its current state (67 years of age for old age, 42 years and ten months for men, and one year less for women for early retirement). Therefore, subsequent updates, relating to 2021 and 2023, did not take place, while for the two-year period 2025-2026, there was no increase in life expectancy, partly due to the effects of the pandemic.
Demographic forecasts and the return of controversies
In 2027-2028, however, demographic forecasts predicted an increase that would have required a three-month adjustment to the eligibility requirements, a move that had sparked controversy among the "usual suspects" embedded in both camps. Although it wasn't necessary (because the procedure, once ISTAT has detected the deviation within the previous 12 months, requires only an interministerial decree), the government decided to intervene by law, spreading the three months over two years (1+2), but shouldering a total burden of €1,5 billion. This decision went against my grain, because when you're asking for more resources for healthcare or education, it's absurd to waste significant resources just to reduce the number of months a few tens of thousands of people working.
The clash over pension requirements
However, the "duelists" have made an appointment in view of the 2027 budget law, Another absurdity, given that the current law expires at the end of 2028 and bypasses the legislative session. In recent days, someone went looking through the report that the RGS publishes every year on pension and healthcare spending trends, realizing that even in the two-year period 2029-2030 the increase in life expectancy could trigger the mechanism of adjustment of a further quarter of age and contribution requirements, obviously if the forecasts confirmed by ISTAT are correct (which is almost certain since demography has now become an exact science) and if the procedures are started.
However, the CGIL has already made its voice heard by pointing out that the mechanism – with unchanged legislation – will not stop in 2030, but will continue, so much so that in 2040 the increase cumulative will reach one year and two months bringing the requirements of the old-age pension at 68 years and two months and those of the early treatment at 44 years of age. The bottom line is that these limits will be unattainable for millions of workers. It's the usual three-card monte that takes into account, to justify retirement, the years of work and insurance coverage and not the years in which the benefit is enjoyed which, according to the so-called breakdown, will be charged to the contributions of the contemporary assets of pensioners, whose contributions as workers were not deposited in the vault, but used to pay the pensions of previous generations.
Pensions and the Generation Gap: The Burden of Baby Boomers
It happens - we have said it many times - that in the next few years (as in previous decades) millions of workers belonging to large generations will show up to collect their pensions. birth, entered early and remained for a long time and uninterruptedly in the job market (especially men, who receive 66% of their early retirement pensions) and are therefore able to cross the coveted retirement threshold at an age that – given the lengthening life expectancy – allows them to collect their pension for an average period of 80% of their working life. This is at the expense of generations decimated by the declining birth rate, who entered the labor market late and unstable with lower average wages (OECD data) to the average amount of pensions.
Il mechanism for indexing retirement age to longevity – he recalled the Bank of Italy – was introduced to rebalance the relationship between working time and retirement across generations; it will help limit the growth in pension spending caused by the aging population in the coming years. It would be appropriate, then, for the CGIL, eager to point out the possible evolution of requirements of retirement from today to 2040, took into account the expenditure curve over the same period (calculated including the effects of the biennial adjustments).
Pension expenditure, GDP and the role of the contributory system
The incidence of spending on GDP in 2040 it would reach a peak of 17,3%, before decreasing and stabilising at around 13,7 in 2070. This trend – according to the Rgs – is mainly attributable to theincrease in the number of pensions compared to that of the occupied, induced by the demographic transition linked to the entry into retirement of the generations of baby boom, only partially offset by the increase in the minimum requirements for access to retirement and by the effect of the containment of pension amounts exerted by the gradual application of the contributory calculation system over the entire working life.
This effect will be more incisive starting from 2040 onwards: the relationship between pension expenditure and GDP it is expected decrease progressively with varying intensities, reaching 15,9% in 2050 and 14% 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 – repetita iuvant – both the progressive exit of the baby boom generations and the automatic adjustment of minimum retirement requirements based on life expectancy.
Early retirement: effective age and future prospects
Here it is worth highlighting another aspect. For those who will go, in ever greater numbers, to early retirement with the system entirely contributory 44 years of contributions will not be required in 2040 (which will be valid for access to early retirement for workers under the mixed regime): 64 years of age, 20 years of contributions and a pension equal to three times the social security benefit will be sufficient.
One last consideration: today until 2026 you retire early, regardless of age, asserting 42 years and 10 months of contributions (one year less for women). They are not few. But those who take advantage of it – for the reasons mentioned above – have an average age at commencement (as shown by the INPS Retirement Flows Observatory) equal, in 2025, to 61,4 years for men and 61,3 for women. In 2040 – the CGIL has calculated – it could take an extra year and two months, but life expectancy will increase by about 4 years and, despite the increased longevity, the resident population overall is intended to to reduce, rising from 59,6 million in 2020 to 56,4 million in 2040.
