Supplementary Pension Schemes: Introduction of Automatic Enrolment and New TFR Rules from 1 July 2026

Edited by Marzio Scaglioni, Leila Rguibi, Silvia Capobianco

Effective 1 July 2026, a significant reform of Italy’s supplementary pension system and automatic enrolment mechanism will come into force under the 2026 Budget Law. The reform substantially changes the rules governing the allocation of severance pay (TFR) and participation in pension funds for private-sector employees.

Under the new framework, newly hired employees entering their first employment will have 60 days from the date of hire to make an explicit choice regarding the destination of their accrued TFR.

If no decision is made within this period, automatic enrolment in a supplementary pension scheme will apply. As a result, the employee’s future TFR accruals will be contributed to the pension fund, together with both the employer’s and the employees’ contributions at the minimum rates established by the applicable collective bargaining agreement.

An exception is provided for employees whose Gross Annual Salary (RAL) is lower than the annual amount of the social allowance (so-called assegno sociale). In such cases, employees may opt not to pay their own contribution to the supplementary pension scheme. Where this option is exercised, the employer will likewise not be required to make the corresponding employer contribution.

The reform applies to private sector employees hired from 1 July 2026, with certain exclusions (including public sector employees and domestic workers), and introduces different rules depending on whether the employee is in their first employment or has prior employment history. In particular, for the latter category, the operation of automatic enrolment also depends on any previous choices made in relation to supplementary pension schemes.

For the employee who is not a first-time hire (i.e., an individual who has already had previous employment relationships in the private sector before 1 July 2026), a distinction must be made between (i) individuals who declare that they are enrolled in a supplementary pension scheme funded, wholly or partially, through the allocation of TFR, and (ii) those who, at the time of hiring, declare that they do not have such a form of membership.

Where the employee is already enrolled in a supplementary pension scheme, the 60-day choice mechanism applies; failing this, automatic enrolment will take effect, unless the employee explicitly opts to join a different pension fund of their choice.

For employees who are not first-time hires and who declare that they have not previously joined a pension fund, wholly or partially, by the allocation of TFR, automatic enrolment does not apply and the TFR remains with the employer/INPS Treasury Fund.

With regard to the allocation of TFR, in the absence of an explicit choice, contributions are directed to the collective pension fund identified by the applicable collective bargaining agreements (including territorial or company-level agreements). Where no such fund exists, contributions are allocated to the residual fund (currently identified as the Cometa Fund).

Another key change concerns the timing: in the absence of a choice within the initial 60 days, contributions are due from the date of hiring, rather than from the expiry of the decision period.

The Ministry of Labour and Social Policies has published on its Supplementary Pension Portal (so-called Portale sulla Previdenza Complementare) a provisional version of the TFR Allocation Election Form (MODULO TFR3_draft), while Mefop (the Company for the Development of the Pension Fund Market) has prepared a template information notice for employers to use (informativa-aziendale-ai-lavoratori-neossunti).

Finally, contributions paid into pension funds will be invested in default investment lines characterized by different risk-return profiles, taking into account the investment horizon and the age of the member, with the removal of the traditional “guaranteed” compartment as the default option. Employees will retain the right to subsequently amend their investment choices.

The reform forms part of broader measures aimed at strengthening the role of supplementary pensions in Italy. However, full implementation will require the issuance of further implementation provisions, in particular from COVIP, as well as the introduction of the new TFR forms.