Knowledge about pensions in Italy is so low that even belonging to an occupational scheme is considered not worth it due to perceived high costs, researchers found.
Three-quarters of Italians in a survey under the age of 35 felt their knowledge about pensions was limited or non-existent.
A further 70% of Italians between 18 and 74 years old felt they were not sufficiently informed about their private pensions, State Street Global Advisors (SSGA) found after polling 1,367 people.
This 70% was proved emphatically right by the finding that the majority of those who did not belong to their employer’s occupational pension scheme said the reason was cost – despite, said SSGA, occupational pension fund fees costing less than a quarter of mutual funds and other pension products.
Antonio Iaquinta, head of institutional business in Italy at SSGA, said: “The message here is clear: more engagement is required throughout Italy, led by the government, to inform and educate the population about the benefits of investing in occupational pension funds.”
He added that the private sector also had a responsibility to be more “proactive and agile” with regard to its default funds’ asset allocation.
“At present, a high proportion of companies’ default funds have a significant allocation to government bonds, which have not yielded high returns for some time and are not expected to in the near term. Plans should consider increasing their portfolio’s diversification to improve risk-adjusted returns for members,” said Iaquinta.
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