The individual plans are the tools preferred by those who move to retirement provision.
The development of supplementary pension is going very slowly. At least in Italy. Past the period of silence-assent in 2007, the accession to the pension products have kept pace bland. If you continue this way, we want more than ten years for a substantial migration.
But there is one instrument that has experienced a growing success over the past year and a half: the Pip, shape complementary pension implemented through individual life insurance contracts, which provides a life annuity in relation to age of retirement. Within the universe of Pip can distinguish types of very different products. From company to company and from product to product may change the mode of disbursement of the final pension, performance related (for example, can be a hedge against the risk of disability, death or accident), the mechanism of the charges (ie cost , etc.). There are two types: separate management and unit linked.
Bills separately managed, typically insurance contracts, these policies are also traditional. “Managing separated” refers to the fact that the money of customers meeting in a fund that is managed separately from the activities of the insurance company (in other words, the lump sum paid by customers is placed in a “watertight compartment”). This type of contract consolidates the results. In other words, the gain achieved in one year are placed in safe and can not be affected by any losses in subsequent years. In many cases, moreover, this kind of plan provides a guaranteed minimum return. In general, therefore, the money of subscribers is maintained in a very prudent. Unit-linked policies, on the other hand, are defined as connected (linked) the development of investment funds (unit) present in the portfolio of internal insurance fund, which is managed directly by the company. The domestic insurance funds are different addresses for references to investor profile or markets where they invest. These types of plans, then, are directly linked to changes in the markets. Therefore present fewer guarantees but more opportunities to profit. Are suitable for subscribers who agree to a particular risk-return somewhat ‘more daring.
The preference of members towards Pip is demonstrated by the numbers. Accessions to the individual plans have registered an increase of 18.3% from January 2007 to 30 June 2009, compared to 3% of the funds and negotiating the 7.9% of open funds. In short, the overwhelming majority of new subscribers has chosen a Pip rather than a traditional pension fund. This, despite the individual plans have cost considerably higher.
“The reasons behind this trend are two,” says Renato Antonini, deputy director of products and markets Alleanza Assicurazioni. “First, for many workers access to Pip is much easier compared to the funds, for example to all those employees whose company does not accede to a negotiated pension fund, or self-employed persons.” Another aspect of fundamental importance is the advice. “The individual pension plans,” says Antonini, “ensure a level of information and attention to the customer not be detected in the money talks, not counting the lines guaranteed minimum return and innovative services such as lifecycle, ie the mechanism that automatically adjusts at the risk of the subscriber.
Flexibility, service and, at times, guaranteed performance, appear to be the reasons behind the increased costs. There is no doubt that the distribution network, through the branches, the advisers and promoters, play a decisive role in the choice of instrument (sometimes risking a conflict of interest). The preference towards Pip has on many occasions conveyed by intermediaries themselves, consistent with a market not yet ripe, as Luca Rinaldi, Head of Life Fondiaria-SAI. Not underestimate either the psychological aspect: the people need strong leadership in a complex and important as the security and is thus willing to pay a few euros more to have a good pension. In any case, Rinaldi continues, the field of social security is developing very slowly.
The migration, however, will inevitably accelerate, in fact, commented Henry Clement, head of complementary Assicurazioni Generali Italy, the security is an urgent integrativa for all workers. Information needs to be done and that people must understand why there is a need to integrate the public pension. Of course, Clement continues, all players will have their role. Meanwhile, the Ministry of Welfare is working on a re-opening (perhaps as early as 2010) to choose half of the stock market, again with the formula of silence-assent.
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