How the Fornero Law Changed Pensions: A Comprehensive Overview

The Controversial Fornero Law: A Comprehensive Overview

When we talk about the Fornero law, which reformed pensions in 2011, it is often met with disapproval, even to this day being referred to as “tears and blood”.
But do you really know what changes were made by that reform? It’s been almost 13 years; perhaps some may not remember, while others may have never known.

Considering the lasting effects of the Fornero reform, both negative and positive as it has contributed to ensuring sustainability to the pension system, it is important to recap what has changed since then.

Reasons Behind the Fornero Reform

The pension reforms introduced by the Fornero law in 2011 were driven by the need to ensure sustainability to the pension system during a period when public finances were in a dire state.

Italy was in the midst of a sovereign debt crisis, with the spread reaching 575 points.
The Budget Law decided to tackle pension costs by introducing stricter rules both for access and calculation.
This reform has saved 22 billion euros between 2011 and 2020 and will continue to reduce costs until 2045.

Provisions of the Fornero Law

The Fornero law (Article 24 of D.L.
201/2011) implemented a comprehensive revision of the pension system.
It started with the redefinition of retirement requirements.
Before “Fornero”, retirement age requirements were as follows:

– Old-age pension at 65 for men, 61 for female public employees, and 60 for those in the private sector, all with 20 years of contributions;

– Seniority pension relied on the Quota system, with most workers qualifying for Quota 96, at least 60 years of age and 35 years of contributions.

The Fornero law intervened on both fronts.
Currently, due to life expectancy adjustments (resulting in a 12-month increase in retirement age overall), the old-age pension requires reaching 67 years for both genders, while for seniority pension (now early retirement), one needs at least 42 years and 10 months of contributions, 1 year less for women.

Pension Calculation

Today, the contributory system is used to calculate pensions, which is more penalizing than the previous retributive system.
However, it wasn’t the Fornero law that introduced this system but the Dini law in 1995.
The Monti government’s reform extended this system to those previously excluded, namely individuals who had 18 years of contributions by December 31, 1995.

Regarding pension adjustments based on cost of living, the Fornero reform initially froze adjustments for pensions exceeding 3 times the minimum benefit until 2017.
However, Constitutional Court ruling No.
70 of 2015 declared the repeated freeze unconstitutional.