A recent Report broadcast on 21 May has caused a series of doubts and perplexities among workers on the risks and usefulness of the same supplementary pension, risking in fact encouraging "do-it-yourself" or favoring the maintenance of the severance indemnities in the company.
We therefore deem it appropriate to clarify some points, in order to be able to correctly inform the workers, also in relation to the latest contractual achievements of the Energy CCNL and Chemical-pharmaceutical:
1. The riskiness of the financial investment
There is no doubt that a financial investment presents risks, but these risks must always be related to the period of permanence in the fund; in the medium term, all experts agree that even an investment in shares has a very low level of risk and that all historical series, including periods of stock market crash, demonstrate a final return higher than inflation and the yield on bonds. To be concrete and examining the situation of FONCHIM and the other contractual funds, in the period 2000-2005, despite the decrease in the stock market index in 2001 and 2002 of 25% on an annual basis, the cumulative return up to December 2005 of the funds balanced (70% bonds and 30% shares) is well above the revaluation of the severance pay in the company.
Furthermore, it should be emphasized that the behavior of financial managers in contractual pension funds is very different from the financial market of mutual investment funds; the control mechanisms imposed by legislation and by management agreements have in fact led to a strong reduction in volatility.
2. Conflict of Interest
The transmission correctly identified the serious conflicts of interest of financial managers, as demonstrated by the cases of Cirio, Argentine bonds, and Parmalat.
However, it has not been highlighted that these conflicts of interest in the system of contractual pension funds are substantially annulled by the legislation and by the strict control of the pension funds on the managers. It is no coincidence that at the time of the Parmalat crack, no shares or obligations of the company were present in the portfolio of contractual pension funds, as demonstrated by an audit carried out by COVIP.
3) Contractual pension funds, banks and insurance companies
The transmission “mixed” contractual pension funds with banks and insurance companies; it is an incorrect operation that does a good service to banks and insurance companies, who resent our presence and who want to deal with workers one by one, obviously in the name of market freedom, and not have associations that collectively represent them as interlocutors tens hundreds of thousands.
Contractual pension funds represent the only real obstacle to the overwhelming market power of banks and insurance companies, forcing them to lower management costs, reduce and eliminate conflicts of interest, make their management transparent and formalize less and less self-referential "governance" .
4) The costs of the contractual pension funds
Also in this case the transmission highlighted the high costs of open Pension Funds (not to mention the FIP insurance products) and the impact on the final benefits; unfortunately, however, nothing has been said about the very low costs of contractual pension funds, which today are on average below 0.50% but which in the future will be even lower
We therefore deem it appropriate to clarify some points, in order to be able to correctly inform the workers, also in relation to the latest contractual achievements of the Energy CCNL and Chemical-pharmaceutical:
1. The riskiness of the financial investment
There is no doubt that a financial investment presents risks, but these risks must always be related to the period of permanence in the fund; in the medium term, all experts agree that even an investment in shares has a very low level of risk and that all historical series, including periods of stock market crash, demonstrate a final return higher than inflation and the yield on bonds. To be concrete and examining the situation of FONCHIM and the other contractual funds, in the period 2000-2005, despite the decrease in the stock market index in 2001 and 2002 of 25% on an annual basis, the cumulative return up to December 2005 of the funds balanced (70% bonds and 30% shares) is well above the revaluation of the severance pay in the company.
Furthermore, it should be emphasized that the behavior of financial managers in contractual pension funds is very different from the financial market of mutual investment funds; the control mechanisms imposed by legislation and by management agreements have in fact led to a strong reduction in volatility.
2. Conflict of Interest
The transmission correctly identified the serious conflicts of interest of financial managers, as demonstrated by the cases of Cirio, Argentine bonds, and Parmalat.
However, it has not been highlighted that these conflicts of interest in the system of contractual pension funds are substantially annulled by the legislation and by the strict control of the pension funds on the managers. It is no coincidence that at the time of the Parmalat crack, no shares or obligations of the company were present in the portfolio of contractual pension funds, as demonstrated by an audit carried out by COVIP.
3) Contractual pension funds, banks and insurance companies
The transmission “mixed” contractual pension funds with banks and insurance companies; it is an incorrect operation that does a good service to banks and insurance companies, who resent our presence and who want to deal with workers one by one, obviously in the name of market freedom, and not have associations that collectively represent them as interlocutors tens hundreds of thousands.
Contractual pension funds represent the only real obstacle to the overwhelming market power of banks and insurance companies, forcing them to lower management costs, reduce and eliminate conflicts of interest, make their management transparent and formalize less and less self-referential "governance" .
4) The costs of the contractual pension funds
Also in this case the transmission highlighted the high costs of open Pension Funds (not to mention the FIP insurance products) and the impact on the final benefits; unfortunately, however, nothing has been said about the very low costs of contractual pension funds, which today are on average below 0.50% but which in the future will be even lower
