CGIL: Early retirement at 64 would shift the cost onto workers

CGIL has renewed its opposition to a proposal that would let people retire at 64 by using their severance pay, calling the idea “wrong and, when tested against the numbers, downright crazy.”

The union says the plan would not genuinely increase flexibility in Italy’s pension system. Instead, workers who wanted to leave employment earlier would pay the price through a lower pension for the rest of their lives. Some would also have to use their own severance pay to reach the required threshold, CGIL said in its Collettiva newsletter.

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A proposal already put forward last year that CGIL considers wrong and, when tested against the numbers, downright crazy.

“This is yet another wrong proposal that tries to present as a new opportunity something financed entirely by female and male workers,” said Lara Ghiglione, CGIL’s confederal secretary. She added that severance pay belongs to workers as deferred wages, not to the government or the public purse as a source for financing pension reform.

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This is yet another wrong proposal that tries to present as a new opportunity something financed entirely by female and male workers.

CGIL said that in 2022, workers seeking retirement at 64 needed a pension worth at least 2.8 times the social allowance, or 1,310.68 euros a month. By 2026, the ordinary threshold had risen to three times the social allowance, or 1,638.72 euros. In the union’s example, a worker earning 30,000 euros a year with 30 years of contributions would receive an estimated 1,110 euros a month at 64, well below the 2026 threshold. Even after adding estimated severance pay, the total would remain insufficient, CGIL warned.

The proposal could also require a full recalculation under the contributory system. CGIL simulations showed that a worker with 40 years of contributions and annual pay of 35,000 euros would receive about 1,726 euros monthly under the mixed system, compared with about 1,543 euros after recalculation, a loss of more than 182 euros, or 10.6%. The gap would rise to 261 euros a month for annual pay of 50,000 euros and more than 365 euros for pay of 70,000 euros.

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Severance pay belongs to female and male workers and is deferred wages. It is not government resources or public resources with which to finance pension reform.