Supplementary pensions

What it is

Supplementary pension provision is a voluntary form of retirement savings alongside the public pension. An individual account is created for each member in the chosen pension fund: the contributions paid are invested in the financial markets and generate returns. On retirement you receive an annuity or, in part, the accumulated capital.

Private-sector employees must decide whether to allocate their TFR (severance pay) to a supplementary pension or leave it with the company within 6 months of being hired for the first time or changing jobs. When the contract provides for contractual membership, the worker is automatically enrolled in the reference fund and the employer pays the contribution set by collective agreements.

Why it pays

Those in the contribution-based system will get a public pension calculated on contributions paid over their whole working life, usually lower than their last salary: a supplementary pension helps reduce this gap. In addition:

• contributions paid are deductible from income within the limits set by law;
• returns are taxed at a favourable rate;
• final benefits are taxed at reduced rates, which get lower the longer you have been a member;
• you can get advances for medical expenses, buying or renovating your first home and other needs;
• those who meet the requirements can use RITA (temporary early supplementary annuity) to leave work earlier.

How to join

Before joining any supplementary pension scheme, read carefully:

• the key information for members, which shows the costs;
• the information note, with the fund’s features;
• the articles of association or regulations.

For closed (negotiated) pension funds, you join at the company’s HR office, the fund’s office, the offices of the trade unions that signed the agreement or the patronati appointed by the fund. For public employees hired on a permanent contract by 31 December 2000, joining a negotiated fund turns their TFS into TFR.

If you are deciding whether to join or want to compare several funds, our advisers can help you understand what suits you best.

The information on this page is general and the rules change often: to check your situation and the current requirements, speak to our staff.