Pension spending in Italy, Europe’s fourth-biggest economy, rose in 2011, welfare agency INPS said.
The agency’s spending on pensions increased to 181.6 billion euros ($228.2 billion) from 177.4 billion euros in 2010, INPS said in its annual report released in Rome today. Prime Minister Mario Monti’s government approved last year an overhaul of the pension system as part of a 20 billion-euro austerity package to fight the sovereign debt crisis and put Italy’s debt on a downward trajectory.
Besides raising the pension age and penalizing early retirement, the reform based the system on contributions rather than salary level and ended inflation indexation for larger pensions. The overhaul means that younger workers will collect smaller pensions than their parents.
Pension spending last year amounted to 11.5 percent of gross domestic product, little changed from 2010, INPS said.
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