The amendment to the budget presented by Fratelli d’Italia, which establishes the establishment of a welfare fund for young people, is inspired by a measure present in the budget law currently being approved in Germany. If, according to the scheme proposed in Italy, it would be the parents who pay contributions on a voluntary basis, the coalition agreement between CDU/CSU and SPD provides that the State pays ten euros a month for each child aged 6 to 18 years into an individual private share portfolio.
From next year, to limit spending, the so-called early pension will however only be paid to those who will turn 6 in 2026. Year after year, age groups will be added until all Germans aged 6 to 18 have had access to the measure. The provision is hidden in the 1,026 pages of the so-called “adjustment proposal”, i.e. the definitive changes proposed to the finance law for next year. Chapter 6002 allocates 50 million euros to the German Pension Board for the so-called “early start pension”. This figure is indeed sufficient for a cohort, but no more. The coalition had in fact calculated the funds needed to extend the benefit to the entire audience at over one billion euros per year and therefore decided to introduce the funding gradually, starting from the class of 2020.
The parents will have to take care of the investment account or insurance, following the model of what already happens in Israel. To start the “individually funded, privately managed retirement savings account,” as it is defined in the bill, parents will have to open an account or insurance policy for their children in order to then apply for benefits. If the parents do not act, the children will in any case be automatically assigned a standard position. Subsequently, the government will draw up a list specifying the requirements that must be respected by the chosen financial instruments. On some key points, such as the waiver of guarantees on invested capital or minimum interest rates, a definitive agreement has not yet been reached. It is expected that third parties, such as parents or grandparents, will be able to contribute directly to the investment, which would make obsolete the current principle according to which private contributions would only be possible “from the age of 18”. Withdrawals from the investment would be blocked until retirement and any profits would be tax-free until that date.
However, before the approval of the text, the coalition intends to close the pension reform issue, contested by the youth wing of the CDU, which complains about having postponed the reduction of one point in the percentage of salary on which the allowance is calculated. The interventions on complementary pensions that ‘GroKò is carrying out follow in the wake of the projects already drawn up by the previous ‘traffic light coalition to provide an alternative to the current ‘Riester-Rentè’ supplementary plan. Chancellery Scholz had in fact studied the introduction of a so-called pension savings account, i.e. a state-certified share portfolio in which, for example, money could be set aside for retirement.