What are supplementary pension funds in Italy?
Supplementary pension funds (previdenza complementare) are private pension plans that top up the state pension paid by INPS. Under Legislative Decree 252 of 2005, they are funded by contributions from the employee and the employer and by the employee’s TFR, the severance pay that accrues each year. Many are collective funds set up under a national collective agreement (CCNL), where joining can entitle the employee to an employer contribution.
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Schedule a strategy callAutomatic enrolment since July 2026
The 2026 Budget Law (Law 199 of 2025) changed the rules for private-sector employees hired for the first time from 1 July 2026, excluding domestic workers. They now join a fund automatically:
- at hiring, the employer must explain the applicable agreements, the automatic mechanism, the destination fund and the choices available;
- within 60 days, the employee can opt out and either keep the TFR with the employer or choose another fund;
- if they do nothing, they join the collective fund set by the applicable agreements, or the residual fund if there is none, with their whole TFR and the agreed contributions;
- the employer then notifies the fund and starts paying from the month after the 60 days, including amounts due since hiring.
The employer must keep the employee’s declaration and give them a copy.
Tax and contributions
Contributions from the employee and the employer are deductible from income up to €5,300 a year since 2026, up from €5,164.57. TFR paid into a fund does not count towards that limit. Employer contributions, other than TFR, carry a 10% solidarity contribution to INPS instead of ordinary social security contributions. When the pension is paid, the taxable part is taxed at 15%, reduced by 0.30 points for each year of membership after the fifteenth.
Supplementary pensions when TopSource runs your payroll
When TopSource runs your payroll in Italy, we give new hires the required information, track the 60-day period, pay contributions and TFR to the right fund and report them in the UniEmens and the CU.
Frequently asked questions
Is a supplementary pension compulsory in Italy?
No, but private-sector employees hired for the first time from 1 July 2026 join automatically unless they opt out within 60 days.
What happens to the TFR under automatic enrolment?
All of it goes to the fund, unless the employee opts out in time or the agreement lets them choose a smaller share within the same 60 days.
How much can be deducted for supplementary pension contributions?
Up to €5,300 a year from 2026, including employer contributions. TFR paid into a fund does not count towards the limit.
Related terms in Italy
- Comunicazione Obbligatoria (Italy)
- Libro Unico del Lavoro (Italy)
- Smart Working Agreement (Italy)
- ROL and Ex-Festività Permits (Italy)
- Patto di Non Concorrenza (Italy)
- Employee Categories (Italy)
- Mandatory Disability Hiring Quota (Italy)
- Cassa Integrazione (Italy)
- Decreto Flussi and Nulla Osta (Italy)
- Welfare Aziendale (Italy)
- F24 Payment Form (Italy)
- UniEmens (Italy)
- Certificazione Unica (Italy)
- Modello 770 (Italy)
- Busta Paga (Italy)
- Conguaglio Fiscale (Italy)
- Impatriate Tax Regime (Italy)
- IRAP (Italy)
- Cuneo Fiscale (Italy)