Focus Paper no. 2 / 23 February 2016

Download PDFThe problem of “early leavers” and safeguards from the impact of the Fornero reform

 

In the wake of the Fornero reform of the pension system, a debate got under way on the possibility of exempting specific groups of workers impacted especially heavily by the changes from the more stringent pension eligibility requirements. These workers were “early leavers” (esodati) who had left work or had accepted/decided major changes in their work situations prior to retirement whom the reform would have forced to postpone receipt of pension benefits.

 

Since then, seven safeguard measures have been approved, involving about 10 per cent of the annual flow of new old age and seniority pensions in 2014 and 2015, generating total additional expenditure between 2013 and 2023 of €11.4 billion, about 13 per cent of the savings envisaged by the Fornero reform. The overall experience with the safeguard measures passed since 2012 has raised a number of issues, which are addressed in the Focus Paper.

 

An initial issue concerns the complexity of the legislation itself, which affects both the institutions called upon to implement the safeguards and the potential beneficiaries, who must understand it in order to submit applications. More important issues regard the policy sphere. The first safeguard measures could be seen as necessary refinements of a reform adopted, like the Fornero Act, as an urgent measure to deal with an economic emergency. The subsequent safeguard measures, which not only loosened the requirements to qualify for the exemptions for the initial categories of workers involved but also progressively included entirely new categories of early leavers, revealed uncertainties in defining those meriting protection and difficulties in gathering reliable information in order to delineate the groups of potential beneficiaries.

 

Over time, the various safeguard mechanisms have covered almost all expectations, gradually including even those who had taken decisions long before the Fornero reform and were waiting for pensions that would begin long after the reform took effect. In hindsight, rather than representing a tool for safeguarding workers facing economic hardship in the years between leaving work and receiving their first pension payment (early leavers proper), the safeguard measures appear to compensate for the inadequacy of passive labour policies or other welfare mechanisms, thereby making policy design and the priorities of public action less transparent.

 

Text of document (in Italian)