Legislative Decree No. 124 of April 21 1993 introduced the concept of pension funds which could be established in addition to the national compulsory pension system.
Labour Ministry Decree No. 211 of January 14 1997 completed the long and rather complex legislative process which started with Legislative Decree No. 124 and continued with Law No. 335 of August 8 1995 (which introduced a major overall reform of the pension system) and with two recent Treasury Ministry Decrees setting forth the rules of conduct, accounting separation principles, operational limits, and criteria on investments to be followed by companies managing pension funds.
Decree 211, which completes the missing detail covering incorporation (application requirements, directors' and officers' qualifications) and pension fund by-laws, has been published in the Official Gazette and will enter into force on August 11 1997.
Pension fund activity can be carried out only with the authorization of the Ministry of Labour, to which the appropriate application must be submitted. Decree 211 sets forth in detail the application requirements and the procedure whereby applications are assessed and authorizations issued.
Ministry of Labour authorization will also be necessary for open-end pension funds established by Italian or EU authorized financial intermediaries such as banks, brokerage firms, insurance companies and by investment fund management companies. In this case a copy of the relevant application will have to be sent by the Ministry offices to the relevant supervisory authorities. The application must indicate, among other things, the name and general characteristics of the pension fund to be established and the names of persons in charge of the administration and management.
The by-laws and other documents of the company filing the application, and the by-laws of the pension fund to be established, must be attached to the application.
The by-laws of the fund must include:
- the name, which must include the words "open-end pension fund";
- the legal address;
- the duration, which must not be less than the minimum number of years requested, of entitlement to pension services;
- the general criteria for the investment of assets.
Once Ministry of Labour authorization is obtained, the financial intermediary will formally incorporate the fund through the resolution of its board of directors approving the by-laws and recognizing the contributions to the fund as separate and autonomous assets not applicable to any purposes other than those of the fund.