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Italy: Executive pension/life insurance benefits to increase in 2020

Health and Benefits
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September 3, 2019

NCA terms are renewed through December 31, 2023; main changes are effective January 1, 2020. Employers should budget for increased costs.

Employer action code: Act

The terms of the new national collective agreement (NCA) for executives in industry have been renewed through December 31, 2023. Executives covered by the NCA will benefit from increases in the life insurance coverage amount and in the pensionable salary ceiling under the defined contribution PREVINDAI fund, and from entitlement to a minimum employer contribution from the start of employment.

Key details

The main changes are effective January 1, 2020, unless otherwise noted.

Life insurance coverage: Life insurance coverage: Insured ordinary death benefits will increase from €150,000 to €200,000 for single executives and from €220,000 to €300,000 for executives with families. The increase will naturally cause employer-paid premiums for life insurance to rise. (Executives must be covered by group life from their date of appointment as an executive).

Maximum pensionable salary: The covered pay ceiling for employer and employee contributions to the PREVINDAI pension fund will increase from €150,000 to €180,000 per year. The 4.0% contribution rate for both employers and employees is unchanged. That portion of (total) contributions in excess of the tax-deductible limit (€5,164.57) is subject to personal income tax, so employees will be paying more in taxes. The government has no evident plans to increase the limit on deductible contributions.

Eligibility: Effective January 1, 2022, all dirigenti contributing at the minimum employee contribution rate will be entitled to a minimum employer contribution of €4,800. Currently this minimum employer contribution applies only after six years as dirigenti.

Insured ordinary death benefits will increase from €150,000 to €200,000 for single executives and from €220,000 to €300,000 for executives with families.

A working group has been formed to examine the possibility of adding insurance coverage for long-term disability, likely on a voluntary basis, but no immediate action is expected.


Employer implications

Employers subject to the NCA will need to budget for the increased cost of benefits (i.e., life insurance premiums and pension contributions) and review the changes with their life insurance provider. The cost increases are fairly significant, but it's worth noting that the level of life insurance was last increased a decade ago, in 2010; the pensionable salary ceiling under the PREVINDAI fund was last changed in 2007.

Contacts

Andrea Scaffidi
Rome

Beatrice Elena Stroppa
Milan

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