The assembly of delegates from the Association of Pension Fund Accountants and Accounting Experts chaired by Luigi Pagliuca approved the 2025 budget assessment and the 2026 budget estimate.
The year 2025 is influenced by the stability of good returns on securities assets and a good increase in member contributions; the recovery of market prices after the uncertainty arising from the “Liberation Day” due to the implementation of tariffs in the United States has seen a tendency to direct investments to the stock market, allowing the realization of an increase in the estimated income from investments that is expected to record a value of 1139 million by the end of the year, while investment costs will reach 36.4 million euros.
Geopolitical events, in a year marked by the implementation of the new US administration’s trade policy and a slowdown in economic growth, were reflected in the achievement of financial results. Inflation mitigation moving towards the target level of 2% in Europe and slightly above in the United States, allowed an improvement in positive real rates, although the impact on domestic demand, at least for Italy, did not help economic growth which is expected to contract to 0.4% in 2025.
The market recorded a brief phase of yield consolidation in April also following the implementation of trade policies by the United States, through an increase in customs tariffs.
The final budget submitted for approval by the assembly showed a positive result before adjustment items, recorded in the name of prudence, of €109.10 million and a positive net result of €25.57 million.
The adjustments, which affected the net result, were related to an increase in the devaluation of financial assets by 5 million which implied a settlement figure of 44 million and an increase in the devaluation of receivables from members by 3.4 million, bringing the devaluation of receivables recorded in current assets to a total of Euro 39.52 million.
The established budget does not take into account the positive changes resulting from the revaluation of previously larger fines and interest, which have been devalued in the past.
The set budget estimates highlight a slight contraction in contribution income of 2 million euros leading to an adjustment in contribution income to 333.55 million, compared with arrears that in October were just under 15% compared to the contribution assessment due. Expenditures on social security and welfare benefits reached 305.4 million euros with an increase of 3.6 million euros, while welfare benefits were confirmed based on the budgeted size, with a year-end estimate of 8.66 million euros.
Fiscal year 2026 estimates project proceeds before value adjustments of 97.67 million (net proceeds of 35.9 million).
This estimate is characterized by significant caution, evaluating a slight increase in member contributions, taking into account the minimum contribution adjustment due to inflation of 1.238%. Its contribution is estimated at 340.94 million referring to a population of active and retired members who continue their activities of 27,000 people. Expenditures on institutional services also increased due to the equalization effect of benefits from 1 January 2025 by 1.238%, an estimated cost of 305.02 million referring to an estimated 13,120 pensioners (with an increase of 573 services), with costs higher than the budget set at 9.67 million euros.
Gross income obtained from investments is estimated at 103.03 million, of which 23.98 million comes from fixed investments and 79.05 million from investments recorded in current assets, a decrease of 11.3 million compared to the established budget. Costs originating from investments recorded in working capital are estimated at 20.4 million, down 16 million euros compared to the established budget. The net proceeds obtained from investment financial management are estimated at 82.62 million euros compared to 77.61 million euros stated in the established budget. Invested securities assets include real estate funds, considering that as of October 31, 2025, recorded a positive financial return of 5.01% from the beginning of 2025; that mandated management, with invested assets at a market value of €1,255.3 million, demonstrated a return of +7.03% since the start of the year.
For 2025, the institution expects to achieve an increase in financial income with the established budget, a slight decrease compared to the final figure in the 2024 budget, with a slight decrease in returns on the bond component and the invested equity component.
The prudent credit appreciation policy towards members continues to be implemented in the adjustment of the 2025 forecast and the forecast results for 2026, which caused the institution to significantly devalue the contribution credit by 39.52 million in 2025 and 27.75 million in 2026. The institution continues actions aimed at regulating the contribution position, with the intensification of executive actions to be implemented in 2026, against irregular positions that can be claimed regarding contribution years up to 12/31/2021 which generated over 8,000 orders.
Despite the intensification of recovery procedures, which to date the current arrears are just under 15% of the contributions assessed in the current year, measures to reduce arrears originating from the last few years still have to be intensified, partly starting in 2022. This situation makes it necessary to continue the evaluation of a prudent and clear credit risk provisioning policy.
Credit write-offs for contributions and sanctions, which by the end of 2026 will total 333.5 million euros, are not included in the ongoing waiver of recovery for all debtors. This is an accounting item intended to hedge the risk of uncollectibility stemming from the consolidation of positions accumulated over many years, and also to remove from the technical balance sheet the influence that potentially uncollectible credits may have.
During the meeting, the committee approved the update to the ALM analysis which is valid for the three year period 2026-2028. The investment strategy analysis aims to strive to significantly accelerate the contraction process of the invested component in the real estate component which is estimated at 19.8% at the end of the 2028 period: as of 06/30/2025 the real estate component was at 27.8%. The real return target is set at 1.6% net, while the nominal target is set at 3.7% following expected inflation at the end of the three-year period (2.1%). The sustainability index improved, recording based on market value on 06/30/2025 a funding ratio of 115.5% (in the ALM prepared in 2024 it was at 93.3%) and the same expected value at the end of 2025. Growth in the funding ratio increased by 22.2% compared to the previous analysis.
The allocation of securities assets in the following year experienced an increase in positioning on the stock market to 34.0% (positioning 31.6% as of 30 June 2025); an increase in alternative investment classes of 15% overall (2% for liquid components and 13% for illiquid components compared to positioning on June 30 of 9.1%, respectively 2.1% for liquid components and 7.0% for illiquid components), positioning of 46.0% in the bond asset class (50.8% position on June 30), and a slight contraction in equity investment allocation to 2.5%. (position 3.2% as of 30 June 2025).
The agency also approved a new actuarial technical balance prepared based on data as of 12/31/2024, which validates the sustainability of social security funds for 50 years, as well as fulfilling the requirements required by law 335/1995 concerning financial balance in 30 years.
