Beppe Scienza e la fregatura dei fondi pensione
(6:02)

Sounding surprised, the newspapers report that 2008 was a black year for pension funds, which lost almost a quarter of their value. I experienced a kind of déjà-vu and decided to ask Beppe Scienza to explain to this Blog precisely what happened.

"Dear Beppe,
Sooner or later, the chickens always come home to roost. As a matter of fact, it is now official that in 2008, the stock market-based pension funds watched as 24,5% of the money entrusted to them went up in smoke, an additional loss to those of 2007. Even generally speaking, the voluntary retirement provisions fared worse than did the company held Severance Payment Provisions (TFR).

So you can take pride in the fact that you gave the Italians some good advice when they were about to make that crucial choice. As a matter of fact, just two years ago, when I introduced my book entitled “La pensione tradita” (Betrayed Pensions), you told the people outright that they should rather leave their severance money in the company provisions.
Those that took your advice are now as happy as larks. They have not lost a single Euro and their benefits increase day by day. In fact, the TFR is the peak of security.
Those who were arguing against the TFR at the time were an incestuous bunch: government and opposition politicians, trade unions and employer associations, bankers’ allies, insurers and fund managers. They were backed by a bunch of economists, most of whom had some sort of conflicts of interest: Marcello Messori, Riccardo Cesari, Elsa Fornero, etc.
The financial journalists were quick to obey the orders they received, reiterating like parrots that people should hurry up and move their benefit provisions to the voluntary pension funds. I only remember two people who in all honesty defended the TFR, and thus the interests of the workers: Giuseppe Altamore of “Famiglia Cristiana” and Oscar Giannino of “Libero Mercato”.
But there is yet more bad news: one of the historical objectives of the trades union has always been to ensure “equal pay for equal work”. Well, the trade union federations suddenly agreed to accept a lower rate of pay for those workers who chose to keep their TFR. They refused to play ball and so they had to be punished by losing the so-called employer’s contribution, which is a double-edged sword in any event.
But the battle has not yet been won, because there are a number of waiting traps at every step. To find out more about these, feel free to visit my website at the Turin University’s Mathematics Department.
The banks, the Post Office itself and the financial consultants continue to sell the people life insurance policies, open pension funds and individual pension plans (pips). These are all further ways to lose money, even for those who kept their TFR.
As a matter of fact, the only way to ensure financial security for your old age is to stick to one simple rule. Saving money, definitely, but avoiding any kind of pension product. Furthermore, don’t reconsider leaving your severance benefits in the TFR. The advice given two years ago is still valid to this very day.
Until next time … and we hope that things will get better" Beppe Scienza