Chapter VII: Old-age Chapter VII: Old-age
Applicable statutory basisLaw No. 155 of 23 April 1981.
Law No. 297 of 29 May 1982.
Law No. 638 of 11 November 1983.
Law No. 140 of 15 April 1985.
Law No. 88 of 9 March 1989.
Statutory Order No. 503 of 30 December 1992.
Law No. 335 of 8 August, 1995.
Law No. 449 of 27 December 1997.
Basic principlesInsurance system. Benefits depend on the contributions.
Field of applicationCompulsory insurance for all salaried workers in the private sector. There is a special scheme managed by the INPS for farmers, tenants farmers and ????, self-employed craftsmen and merchants /retailers.
Exemptions from compulsory insurance for insignificant employmentNone.
Conditions18 years of contributions up to 31 December 1998. Progressive increase of one year every two years for up to 20 years (on 1 January 2001).
New system: 5 years of contributions (since 1 January 1996).
40 years of insurance and contributions.
Men: 63 years (64 years after 1 July 1998).
Women: 58 years (59 years after 1 July 1998).
Progressive rise of retirement age of one year every 18 months up to 65 years for men and 60 years for women.
New system: age 57-65 years. The amount of the benefit varies according to age.
"Seniority" pension: At the age of 54 and after 35 years of contributions, or after 36 years of contributions regardless of age (after 2008, at the age of 57 with 35 years of contributions or after 40 years of contributions regardless of age).
Pensions awarded to workers whose companies are in economic difficulties: early retirement is possible at the latest 5 years before normal retiring age.
Deferment possible until a maximum of 65 years of age for salaried workers who have reached the normal age of retirement, but who are not entitled to a full pension (40 years of contributions).
Salaried workers who are entitled to a full pension (40 years of contributions) can also choose to defer their retirement up to 65 years of age.
BenefitsE-VII-10-IT
Reference earnings and length of insurance.
E-VII-11-IT
Up to LIT 64,126,000 (ECU 33,020) (ceiling): 2 % x n x S.
LIT 64,126,000 – LIT 82,287,580 (ECU 43,917) = (ceiling x 1.33): 1.6 % x n x S.
LIT 82,287,580 – LIT 106,449,160 (ECU 54,813) = (ceiling x 1.66): 1.35 % x n x S.
LIT 106,449,160 – LIT 121,839,400 (ECU 62,738) = (ceiling x 1.90): 1.1% x n x S.
More than LIT 121,839,400 (ECU 62,738): 0.9% x n x S.
n = number of years of insurance (max.: 40).
S = reference earnings (see below "3. Reference earnings or calculation basis.").
New system: For each contribution year a conventional contribution of 33% of the earnings is applied. Contribution amounts are adjusted yearly, according to the average increase of the GDP within the last five years. The pension amount is calculated by multiplying contribution amounts by an actuarial coefficient which varies according to age (min. age is 57 years, max. age is 65 years). There is no longer a minimum pension.
S = reference earnings.
For those who on 31 December 1992 had worked 15 years or more: average of salaries during the last 10 years with ceiling.
For those who on 31 December 1992 had worked less than 15 years: average earnings over a variable period between the last 10 years and the entire period worked, with ceiling.
For those hired between 31 December 1992 and 31 December 1995: average of the earnings for the entire period of work, with ceiling.
Annual salary ceiling: LIT 64,126,000 (ECU 33,020). The part of the salary exceeding the ceiling is taken into account according to the percentages indicated above under "Calculation method or pension formula."
The reference earnings are adjusted according to the consumer price index, increased by 1% for every year of work.
New system: ceiling of LIT 132,000,000 (ECU 67,970). Amount adjusted according to the consumer price index.
Total consideration for periods of illness, maternity, military service, unemployment and mobility.
No supplements.
No supplements.
Supplements:
Beneficiaries of a minimum pension:
Between the ages of 60 and 65 years and with annual income less than LIT 9,460,000 (ECU 4,871) if single or LIT 16,053,000 (ECU 8,266) if married: annual supplement of LIT 390,000 (ECU 201).
Over 65 years of age and with annual income less than LIT 10,110,100 (ECU 4,977) if single or LIT 16,703,700 (ECU 7,506) if married: annual supplement of LIT 1,040,000 (ECU 536).
Annual amount of minimum pension: LIT 9,070,000 = ECU 4,670. The old-age pension is brought up to the amount of the minimum pension if the annual taxable income of the pensioner is less than 2 times the minimum pension.
None.
Pension granted to workers in enterprises having economic difficulties: the missing contribution years up to the normal retirement age are calculated as if they were covered by contributions.
Salaried workers having reached the normal retirement age but not yet entitled to the full pension: annual increase in the pension of 3 % or 3.5 % according to age.
Salaried workers entitled to full pension (40 years of contributions): possiblility of obtaining pension supplements for these periods of work.
AdjustmentAs of 1 January 1995, annual adjustment based on the development of the cost of living according to the following modalities:
for the pension category up to twice the minimum pension: 100 % adjustment
for the pension category between twice and three times the minimum pension: 90% adjustment
for pension category exceeding three times the minimum pension: 75% adjustment.
Partial pensionNone.
Accumulation with earningsTotal accumulation possible for the minimum pension.
No accumulation for the portion of the pension exceeding the minimum pension.
As of 1 January 1994, it is possible to combine the pension with income from self-employed activities. The share of the pension which may be combined with these earnings is equal to the amount of the minimum pension plus 50 % of the amount in excess.
TaxationBenefits are fully liable to taxation.
Exemption for the portion of income corresponding to contributions to the social security system.
Taxation depends on the total annual income of the individual or of the family. Annual tax exemption ceiling:
Single person:
LIT 9,100,000 (ECU 4,686).
Married couple without children:
LIT 14,202,983 (ECU 7,313).
Married couple with one child:
LIT 15,145,480 (ECU 7,799).
Married couple with two children:
LIT 15,658,687 (ECU 8,063).
Social security contributions from pensionNone.