TFR and supplementary pension schemes: the new rules in force from July (People are People, 3 august 2026 – Roberta De Felice e Giorgia Tosoni)

Roberta De Felice and Giorgia Tosoni, Labour Consultants at HR Capital Consulting STP Srl, have authored an in-depth analysis of the new legislation introduced by the Italian legislator to encourage the use of supplementary pension schemes in support of the public pension system, which has been under considerable strain for some time.

Law No. 199 of 30 December 2025 (2026 Budget Law) has significantly amended the regulation of supplementary pensions by reforming Legislative Decree No. 252/2005 through a series of measures aimed at promoting participation in complementary pension schemes.

Among the key innovations introduced by the reform is the automatic enrolment mechanism for newly hired employees in supplementary pension funds, featuring shorter deadlines and new procedures for choosing how severance pay (TFR) is allocated.

The reform also introduces the portability of employer contributions when transferring pension positions to an open pension fund or an Individual Pension Plan (PIP), expands the methods for receiving benefits upon retirement with more flexible options such as fixed-term annuities and freely determined withdrawals, introduces tax incentives designed to encourage long-term participation in pension funds, and raises the tax-exempt threshold for contributions paid into supplementary pension schemes.

The legislator’s objective is to strengthen the role of supplementary pensions as the second pillar supporting a public pension system that has been under strain for years, while encouraging access to pension funds, greater flexibility in benefits, and more favourable tax conditions for members.

In this context, particular attention should be paid to the operational changes applicable since 1 July regarding the allocation of severance pay (TFR), which introduce a differentiated regime depending on the type of employee.

The new sixty-day period for exercising one’s choice is a key element of the reform. Once this period expires, different rules apply depending on whether the employee is entering private-sector employment for the first time or has previously worked for other private-sector employers.

AUTOMATIC ENROLMENT AND FIRST-TIME EMPLOYEES

The main innovation concerns employees entering private-sector employment for the first time. Upon hiring, employees are automatically deemed enrolled in the supplementary pension fund identified under the collective agreements applied by the company, such as sector-specific pension funds or funds established through territorial or company-level agreements.

However, this mechanism does not prevent employees from opting out of automatic enrolment within sixty days of being hired. They may instead choose either: (i) to allocate their TFR to a different supplementary pension scheme, or (ii) to keep their TFR within the company, with a possible transfer to the Treasury Fund where the legal requirements are met.

In the absence of an explicit choice, automatic enrolment results in the full transfer of the employee’s severance pay (TFR) to the collective pension fund, as well as the payment of employer and employee contributions at the rates established by the collective agreement applicable to the employment relationship. Contributions will commence in the month following the expiry of the sixty-day period, with effect from the date of hire, in accordance with the procedures and deadlines established by the receiving pension fund.

Read the full version of the article published on People are People