Pensions, the still GDP eliminates the revaluation of contributions. Here is who will be penalized

With the note of 7 October from the Ministry of Labor, Istat announced that the average rate of gross domestic product of the last five years was equal to -0.000215 and, therefore, the revaluation coefficient of the contribution amounts is equal to 0.999785.

This is not the first time this has happened. In fact, the index of revaluation of the contribution amounts was negative also at the end of 2014, but then the Government intervened with the decree law 65/2015 (aimed at also incorporating the effects of the Constitutional Court ruling on the automatic revaluation of pensions) establishing that, in any case, the coefficient could not be less than one, except for recovery to be made on subsequent revaluations. During the first application (coefficient applied in 2015, on the contribution amounts accumulated at 31 December 2014, for pensions starting from 2016) there was no recovery on subsequent revaluations, due to express regulatory provisions.

Revaluations blocked

Istat specifies that the coefficient is less than unity, due to the negative trend in nominal GDP in the period considered. Therefore, for pensions with effect after 1 January 2022, the contributions accumulated up to 31 December 2020 will not be revalued, due to the sterilization to the unit. In the absence of further legislative interventions, the coefficient that will be announced at the end of 2022 will have to take into account the recovery of 0.0215%, currently frozen.

Who is not penalized

The use of the coefficient equal to 1 makes it possible not to penalize the contributions already revalued in previous years. In fact, in the absence of this forecast, the amounts set aside would suffer a reduction equal to the negative trend of the economy. In economic terms, if an amount of 100 thousand euros were to undergo the “devaluation”, as calculated by Istat, it would become 99,978.50 euros, with an annual gross loss on the pension equal to about one euro. For higher uprights, the loss would increase proportionally.

Contribution amount and coefficients

Please note that the contribution amount is equal to 33% of the salaries received by the employee, revalued annually according to the GDP index. The accumulated amount, at the end of the working career, becomes the contributory portion of the pension (so-called quota C) through the application of coefficients linked to the age possessed by the worker at the time of access to the benefit. These coefficients range from 4.186% (for retirements aged 57 or below) and 6.466% for policyholders aged 71 or over.

PREV Borsa Italiana, the commentary on today’s session (6 October 2021)
NEXT Pesaro, from Eden Viaggi Pesaro to the new tour operator ‘Creo’ – Chronicle