Occupational Pension Schemes within the European Project for the Savings and Investment Union: Regulatory Implications

By Sabrina Darbali and Alessio Mauro

Abstract: Demographic trends affect the functioning of the capital markets and the future dynamics of the savings-investment cycle. This article argues that aging and declining birth rates have a significant impact on the functioning of the social security mechanisms that characterise the economy of Member States. The Dutch pension reform can be considered an example of sound and prudent management of pension savings. Specifically, the Dutch experience shows that the quality of pension fund investments cannot be pursued through deregulation, but rather through integrating prudential supervision and transparency protection. However, the Italian pension framework is characterised by a reduced propensity to invest in equities, accompanied by a low propensity to directly finance the real economy. It is argued that the sustainability of legislative reforms should be linked with the project to establish the Savings and Investments Union.

Summary: 1. Introduction. – 2. Insights from the Dutch reform. – 3. Impact of S&IU on the Italian regulatory framework. – 4. Financial sustainability, S&IU, and regulatory issues. – 5. Investment productivity, financial risks, and the responsibilities of social security institutions. – 6. Conclusion.

1. It is commonly and widely accepted by scholars of economic law that demographic trends are likely to affect the functioning of the capital markets and the future dynamics of the savings-investment cycle.[1] At first sight, this is a factor that European regulators could consider both among the exogenous variables of the financial markets and in the models used to regulate and control commercial transactions, as was clearly indicated in a scholarly view that addressed the impact of socio-economic changes on the principles of efficiency, equity, and social cohesion that underpin the legal systems of the most advanced countries.[2] In this light, it can be argued that certain sectors of the capital market need greater attention, as aging and declining birth rates are likely to have a significant impact on the functioning of the social security mechanisms that characterise the economy of Member States.

A recent reform in the Netherlands led the regulator to review the rules governing the investments of social security institutions.[3] Specifically, the Dutch pension reform, which culminated in the Wet toekomst pensioenen (Wtp), constitutes a systemic shift, as it redefines the regulatory balance between collective solidarity, individualisation of social security positions, and accountability of institutional actors (social partners, pension funds, supervisory authorities). The Wtp pursues the objective of initiating a multi-year transition towards a structure in which accumulation in the ‘second leg’ (occupational pensions) is brought back to forms of premieovereenkomsten (defined contribution schemes), with a consequent requalification of risks (investment and longevity) and recomposition of governance duties.[4]

Particular attention is placed to the Italian legislation, which, in some respects, anticipates the trends outlined above, as it is based on a set of regulations that has long taken into account the progressive financialisation of the Italian social security institutions. Consequently, there is renewed interest in examining the principles and criteria that should govern the sound and prudent management of pension savings. Hence the need to assess, in light of the Dutch guidelines, the obligations on the administrators of a pension fund and the risks of sanctions to which they may be exposed. This is to verify whether the regulator has been able to identify a system (of incentives and prohibitions) that allows for the management of future demographic trends for maximising the social utility of pension schemes. The relevance of this survey is linked to the Savings and Investments Union (S&IU) project[5] and the common aim of creating better financial opportunities while enhancing the European financial system’s capability to connect savings with productive investments.

2. The Dutch reform offers useful insights regarding the productivity of pension fund investments, which could inspire the European system to better involve pension savings in the S&IU. Further, the transition from a model based on formally guaranteed benefit promises to a scheme based on defined contributions and actual returns involves an explicit reallocation of risks and a consequent redefinition of the decision-making responsibilities of governance bodies. Productivity is no longer a residual outcome, subject to the need to preserve actuarial balances built on implicit guarantees, but becomes a structural element of investment sustainability.

In this context, the invaren discipline, as a mechanism for the collective conversion of rights accrued in the new structure, indicates that allocative efficiency must be pursued within a framework of verifiable and legally controllable intergenerational equity. Greater exposure to market risk which is functional to potentially higher returns is legitimate only if accompanied by transparent procedures, ex ante balancing criteria, and effective prudential supervision by the supervisory authorities. Therefore, in the Dutch reform, investment productivity is not separated from the assessments required of pension fund bodies regarding the quality of investment products and the traceability of allocation choices.

Another important indication concerns the strengthening of fiduciary duties, as the abandonment of structures that are overly oriented towards covering predetermined nominal liabilities allows for greater flexibility in portfolio management, favoring long-term strategies consistent with the time horizon of members.[6] However, this flexibility is offset by an increased motivational burden; indeed, investment policies should be justified not only in terms of expected return, but also in terms of consistency with the risk profile, the demographic composition of the fund, and the principle of proportionality.

Finally, it should be noted that the Dutch experience shows that the quality of pension fund investments cannot be pursued through implicit deregulation, but rather through simplified yet sophisticated regulation capable of integrating prudential supervision and transparency protection. Thus, the combination of allocative autonomy and enhanced supervision represents a model of institutional balance in which pension institutions are called upon to operate as fully responsible investors, oriented towards long-term returns, but within a regulatory framework that ensures stability, fairness, and monitoring of choices that are oriented towards social development.

3. In the context under consideration, it is clear that the Italian approach stems from a different regulatory framework, dating back to the early 2000s, when it began to transpose European directives on limits to pension fund investments, thereby imposing stringent constraints on management operations.[7] Although this rationale was justified by the need to protect savings, there is no doubt that it ended up sacrificing potential returns and attention to the real productivity of the investments themselves, limiting opportunities for diversification and the entry of resources into markets that are profitable in the long term.

In addition, the resources allocated to benefits now amount to approximately €243 billion, accounting for 10.8 percent of Italy’s gross domestic product (GDP), of which 4 percent represents the share of households’ financial assets. In this context, there is a growing level of return, which is more noticeable for managers with a more significant equity exposure. Overall, investments are mainly allocated to government bonds or other debt instruments (approximately 56% of the total), equities (21%), and UCITS (12.4%), resulting in an exposure to equities and derivatives of 28.8%.[8] It is therefore clear that in Italy there is a reduced propensity to invest in equities, accompanied by a low propensity to directly finance the real economy. This is in contrast to a marked preference on the part of management entities for government bonds.[9]

Added to this is the comparative survey carried out by the OECD Pension Outlook 2024, which compares the experiences of certain countries (including Italy), showing that pension savings yields are higher in the equity sector and in balanced investment lines.[10]  This has been particularly true in economic and financial contexts that favor the life-cycle system, i.e., investment composition choices that are projected and adapted to the investor’s stage of life and time horizon.

The issues underlying the diversity of European pension systems (complementary to capitalisation and defined contribution systems with investment risk borne by members) emerge, as some are still characterized by management approaches that tend to avoid the so-called default line, leading managers to channel savings into low-risk sectors.

Given this diversity, the relationship between regulation and efficiency needs to be addressed in a context where it appears necessary to resolve the uncertainties of investors and pension funds with regard to savings sectors other than sovereign debt[11] and, at present, not fully explored (equities, banking, infrastructure). There is a need to investigate the reasons for the reluctance of pension funds to invest in sectors other than government bonds, in order to understand whether there is regulatory scope for incentives to guide institutions towards a better connection with the real economy.[12]

Therefore, the constitutional provisions relating to social security and welfare, particularly those set out in Article 38, paragraphs 2 and 4, of the Constitution, which stipulate that welfare and social security tasks are to be carried out by “bodies and institutions established or integrated by the State,” could take as a point of reference. The preliminary work of the Constituent Assembly is particularly relevant, insofar as it investigated the reasons for favoring a position of the State as an “organiser” in the proposal for a constitutional model that left the implementation of the general principles set forth therein to future legislative policy choices.[13]

Therefore, it can already be anticipated that, on the one hand, this architecture confirmed the multi-level structure of the Italian model (between the public and private systems), where the function of the State is that of a model of coordination and control, on the other hand, after such a long period of time, the issue of the level of State intervention in the social security sectors, as provided for by the implementing provisions pursuant to Article 38 of the Constitution, is still relevant.[14]

In this light, Article 1, paragraph 3, of the Legislative Decree No. 509/1994, implementing the privatisation of professional pension funds, should be reinterpreted, as it prohibits state contributions, confirming the differentiated treatment between the public and private systems.[15] In other words, it is necessary to examine the effect that the Italian paradigm has on the markets, in light of the importance and potential of investments by privatised entities in relation to the growth of the country’s economy and the satisfaction of social needs. Nevertheless, the solution to these critical issues may require a change of perspective compared to the past, through the creation of a regulatory system that overcomes the symbiosis between the state and the market, given the propensity to use social security savings to cover public debt.

In Italy, after the privatisation of professional pension funds, it is necessary to enhance access to new investment channels through regulations that do not limit but rather promote the channeling of resources into strategic sectors of the economy. However, the osmotic link between legislative policy and social security financial resources should be revisited through the introduction of an innovative model of self-regulation which, while increasing new financial channels in the markets, also allows the welfare channel, which is overshadowed by the state, to be overcome. This is in line with the pursuit of the ratio legis of development and assistance for members, ensured by a decentralised vision of the legal system included in the principle of subsidiarity, as intended by the Founding Fathers.[16]

All this requires, in countries such as Italy, a rethinking of public intervention in the social security sector, as the option for advanced social democracy (as seen following the Europeanisation of our legal system) requires a rethinking of rules and controls, where the clear imprint marked by ethical principles of constitutional rank must follow in the footsteps of a Europe that – for some time now – has required Italy to move beyond the model of the Milan Commodities Exchange, founded on the basis of a Napoleonic decree of 1808.[17]

More generally, these issues go hand in hand with those related to the development of social policy, which has become a highly topical and publicly debated issue in most industrialised countries. At the global level, the crisis of the welfare state is framed by the adverse demographic outlook, which is reflected in low birth rates and increased life expectancy, compounded by significant unemployment and a fiscal framework that threatens the stability of the pension system. In modern democracies, economic strategies are subject to complex political processes that must pass the test of electoral consensus if they are to be implemented and supported by the community. In particular, the widespread pension systems are still facing a serious crisis due to the rapid aging of the population, prompting their respective governments to reevaluate the mechanisms that were previously established.

4. The assessment of the future regulatory system is crucial in terms of the actual financial sustainability of social security institutions, especially privatised ones, whose contribution capacities are often exposed to variables resulting from increased life expectancy and other relevant factors (feminisation of professions).[18]

After all, one of the key points of the reasoning underlying S&IU concerns financial stability, considered here as the natural vocation of entities responsible for social security payments. Over time, pension institutions have developed a function of investing in strategic sectors of the economy because ordinary financial instruments on the markets have been joined by mechanisms for investing in the real economy, ushering in a period that has come to represent the historical function of social security institutions, aimed at protecting the general interest.[19] This investigation also stems from the public interest in the regulation of investments to address private legal positions that should be subject to market rules.[20] Further, the multiple factors that have contributed to defining social security science in the legal and economic interactions between the different operators acting in the markets. Moreover, the above highlights the importance of long-term investment strategies for supplementary pensions in the real economy[21], seen from the perspective of the greening of the pension system[22] .

The allocation of pension capital to strategic economic and environmental sectors could help to reduce the potential negative effects of inadequate public measures to safeguard the bioclimatic context.[23] For preserving nature with a view to self-preservation—and development—of natural resources brings to mind the ideas put forward by John Locke in his Second Treatise on Civil Government. Starting from the Christian-inspired assumption that God has granted the earth and other resources to mankind, Locke outlines his ideology by proposing the role of political society, aimed at ensuring the ownership or, rather, the management of resources in favor of human beings.[24]

What emerges is the function of conserving the earth resources, which guides us toward the pursuit of bioclimatic stability in 2050. In this regard, as stated by the Council of State on the occasion of the establishment of banking foundations, the principles outlined constitute “the driving criterion in accordance with which the relationship between the public and private sectors must now develop within civil society, including in the achievement of collective goals”.[25] This vision is also reflected in the public policy vision put forward by the Constitutional Court in its case law on IPABs (judgment no. 396 of April 7, 1988), according to which the State achieves the development of civil society by ensuring its application from the bottom up and promoting individual energies for the direct implementation and fulfillment of social needs[26] .

It is believed that, through the involvement of institutional investors, the general interest can be served even better. The perspective of financial ethics and the protection of the environmental ecosystem could, in this sense, be guaranteed by offering concrete responses also from the point of view of improving the real economy, leading to positive effects on the markets.

To promote this, new rules will be needed within the S&IU, capable of attracting investment and greater transparency in potential achievable results, factors that are not always developed at sectoral level.[27] This could be accompanied by a regulatory policy that could stimulate such investments, including through greater flexibility in the requirements for pension finance operators.[28] In this context, it is evident the cross-cutting nature of social security in its operational aspects, as well as in its relationship with policy choices. Market.[29] These considerations seem to be supported by the role that social security is gradually assuming, given that its natural vocation as a tool for protecting the pension needs of its members is complemented by the crucial function of contributing to the common good through related investments.[30]

The purpose and limitations of the research does not exhaust its value in referring to the need to indicate which areas clarify the need for public intervention to improve the interaction between forms of social security and investment channels. Instead, it aims to emphasise that direct intervention in the markets by entities pursuing institutional goals of high social utility should be based on standards of transparency, effectiveness, and freedom. Thus, the investigation appears to be geared towards affirming a vision in which efficiency is instrumental to the protection of individuals who rely on social security savings and to the progress of a real economy.

5. The above-mentioned investigation now turns to the possibility that directing investments towards the real economy may introduce new types of risks and, in this way, entail additional responsibilities for the representatives of the decision-making bodies of social security institutions. Therefore, it is necessary to take into account the role that social security and pension savings are assuming in the markets in order to assess the systemic effects of the regulatory framework. It should be noted that statistics from the Organization for Economic Cooperation and Development (OECD) show that these funds reached a threshold of $63.1 trillion at the end of 2023.

The doctrinal debate has highlighted the virtuous component that certain long-term allocations can bring, considered a determining factor in contributing to financial stability, given the inadequate diversified strategy.[31] However, this sector has undergone significant changes over the years, mainly due to market variables associated with a prolonged period of low interest rates, which have opened the door to new investment risks compared to traditional ones[32] .

It can be said that despite the standard differentiation between the three pension pillars—common to various systems—these pension models confirm specific characteristics depending on the country concerned. The fact is that almost two-thirds of OECD members have established public pension reserve funds. Among the assets of pension institutions in the OECD, more than half of global assets are held by US pension funds. By 2023, these had accumulated $38.97 trillion. Other important markets are the United Kingdom ($2.71 trillion), Australia ($2.21 trillion), Canada ($3.17 trillion), and the Netherlands ( $1.74 trillion).[33] However, since 2020, some countries (Canada, the Netherlands, and the United Kingdom) have had to deal with critical issues arising from derivative contracts, confirming the importance of investment strategy and systematic risk supervision[34] .

The variables taken into account in this paper have revealed a marked propensity for national pension funds to invest in public debt hedging channels. This is not only because institutional investors are subject to a particularly stringent regulatory system, but also because of certain supervisory guidelines that appear reluctant to recognise the freedom to direct pension savings towards the real economy. It goes without saying that the system may accept that investment choices are not entirely discretionary, but it seems necessary for the legal system to allow for the search for a balance between the most advantageous opportunities and compliance with the rules. As we have seen, this differs from the regulations offered in other legal systems because it is linked to a code of conduct based on principles and self-regulation (or, rather, accountability).

It would be necessary to overcome the purely prescriptive and rigid approach, which has sometimes created an obstacle to the market, by resorting to soft-law instruments that are more suitable for describing the best rules of conduct in the pension finance market. However, it seems necessary to highlight the role of supervision and, therefore, the possibility that an innovative interventionist formula could recognise social security institutions as economic drivers, a role that is not yet part of their policies.

This model, although subject to improvement and integration, could in fact promote a greater degree of accountability in corporate governance, even though such supervisory bodies do not have the regulatory authority or pervasiveness of public supervision. It should be noted, however, that this paradigm would allow for full transparency in the markets and the confirmation of rules based on ethical values and social finance, never detached from the logic of sound and prudent management.

Therefore, the need for a long-term strategy is desirable in terms of a dynamic vision that looks at the needs of pension funds, whose intergenerational perspective is also highly relevant in the context of regulation. Drawing on international experience, regulation could therefore be modeled by assigning an active role to pension funds in the market, reconciling investment strategy with long-term stability. The long-term perspective adopted by pension funds has led to their full inclusion in the list of relevant projects, characterized by investments in infrastructure. The search for capital in this sector has given rise to the growing importance of private financing in this area worldwide. In this context, the presence of pension funds has taken into account aspects of long-term growth.[35]

In this light, the issue of environmental policies and sustainability also comes to the fore, as these are also topics of great relevance and importance in the long term. In doctrine, the function of pension plan investments has been highlighted in relation to a series of projects (from economic infrastructure such as transport to social projects such as hospitals) according to diversified investment paradigms (equities).[36] Specifically, the aforementioned international contributions have highlighted the close link between regulation and finance, as the variables associated with the different legal systems demonstrate the crucial role of the regulatory framework in the development of new generation markets.

It should also be noted that infrastructure investment has been reflected in many pension funds, given their real size and greater tangibility compared to other assets. Indeed, infrastructure—designed for the long term—seems to be structurally suited to the liabilities of pension funds. Some contributions have also highlighted the role of investment in terms of environmental and social sustainability, as this is an increasingly popular approach in public and sector pension plan policies.[37]

There currently appears to be a consensus that, in the case of investments linked to real economy mechanisms, there is a need for full knowledge of the risks to be managed, such as exposure to leverage, proprietary assets, and environmental risks, together with regulatory and political challenges. Governments are therefore called upon to promote, through appropriate regulation, the development of infrastructure through innovative, long-term financing channels. This includes proposing specific measures that can contribute to the pursuit of these objectives, based on transparency and effective regulatory incentives.[38]

At the same time, however, consideration should be given to the opportunities that could arise from a greater presence of social security institutions in the stock markets; these institutions could bring added value to corporate governance. Pension bodies could influence corporate dynamics in the pursuit of social and general interests, which are not always safeguarded on an individual basis by market operators. The European Union could explore the possibility of carving out effective areas of operation within the S&IU, as a foreign counterparty, for example, for the financing of interventions with a significant energy and environmental impact in the Arctic, in the correct interrelation between EU law and international law.

6. The aim to set higher principle of financial ethics and solidarity between legal systems, postulates an intermediate step that sees the emergence of a new common regulatory language, including from a financial point of view, at the center of the debate. Therefore, the assumption that the solution lies in a more evolved conception of the state could be confirmed, charting a scientific path aimed at steering its fate towards an innovative economic paradigm. The traditional activity of verifying and controlling rules will therefore be implemented with the aid of innovative mechanisms, so as not to relegate public activity to a mere tool for remedying the distortions that have occurred over the years. The intention is to look at a change—a reversal—of perspective, as there are still critical issues today that make the responses offered insufficient to react concretely to the challenges that arise on an international basis.

This brings to light a first point of interest, concerning the fact that the state has always regulated strategic sectors of the economy, including supplementary pension investments. Another point, however, concerns the possibility of adopting different assumptions than in the past. In fact, future regulation should be seen as a mechanism for strengthening institutional investors.[39] Therefore, the greater presence of these bodies could itself become a direct tool for the state to counteract and resolve potential mechanisms that are detrimental to the system. While retaining their private status, institutional investors would assume the role of strategic partners of the State in establishing a collaborative relationship aimed at increasing economic incentives for market stability.

The entry of institutional investors into strategic areas of the economy could contribute even more effectively to reducing the critical issues that exist today through long-term market choices (which are, in fact, the needs of privatised entities). To do this, we need to return to the social security model in order to explore greater opportunities for the private sector through the use of rules that are more responsive to modern markets and their compliance with economic development, borrowing the relevant model from best practices found in international experiences.

This is becausecthe international context will require us to face constant challenges of change and efficiency in the industrial and economic system. In the case of Italy, moreover, the presence of multiple supervisory authorities could encourage the fragmentation of the relevant regulatory structures and lead to a lack of coordination, as more adequate collaboration with other financial authorities is needed to conduct joint analyses at the system level.

Therefore, the integrity of pension sustainability levels is now observed and better weighed through a multi-level approach to rules that also safeguard the markets, which then benefit from substantial liquidity.[40] Although significant progress has been made, particularly in the implementation of private pension channels and the provision of less stringent constraints on equity investments, challenges remain in achieving full alignment of sustainability across the various pillars that exist today. In this regard, market fragmentation plays a key role, as it is considered a factor that alters the balance and does not favor the raising of private capital, discouraging the planning of pension plans. To promote full development of the pension market sector, responsible investment could be accompanied by a policy that focuses on environmental sustainability.[41]

Europe’s propensity towards a union that also encompasses investment dynamics requires, on the one hand, an improvement in the regulatory framework—so that it is more efficient and rational for the pension sector— on the other hand, a balance between growth, innovation, and market resilience. This means engaging the administrators of a pension institution in tasks that are crucial for future generations within a context that is truly fair and solid from a financial point of view, hence the need for the relevant liability regime to be defined at European level, taking into account not only the private law aspects that characterise the governance of such bodies, but also the possibility that the administrators themselves may have to pursue objectives of general interest and assume broader responsibility towards future generations. We are faced with a public policy objective that could also require a rethinking of the ‘business judgment rule’, as it has usually been applied when judging the conduct of directors of private companies.

Authors:

This paper is the result of joint research: Sabrina Darbali drafted sections 1-2 and Alessio Mauro drafted sections 3-6

Sabrina Darbalia is Associate Professor of Comparative Law, dispute settlement and international arbitration, Souissi, Mohammed V University of Rabat, Morocco

Alessio Mauro is Associate Professor of Economics Law, University E-Campus

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[1] It is worth recalling the 11th Convegno Associativo Nazionale ADDE – Dinamiche demografiche e Diritto dell’Economia, Università degli Studi di Trento, 4 – 5 December 2025.

[2] See Capriglione – Andenas – Lemma, Demographic dynamics and economic law in the light of recent geopolitical trends, in Law and Economics Yearly Review, 2025, 1 .

[3] In the Italian case, there is significant overlap between public and private pension schemes with the former predominating, including in social and cultural terms. This contrasts with other countries, including the United States, where there is a greater propensity for private pension schemes and an overall increase in their performance.

[4] It is worth noting that from a legal and institutional point of view, the core of the reform focuses on (i) the design of the ‘new pension contract’ and the decumulation phase, (ii) the transitional architecture, in which the choices of the social partners formalised in the transitieplannen are important, and (iii) the regulation of the collective conversion of accrued rights (invaren), which is likely to raise issues of protection of legitimate expectations, proportionality, and asset protection, also from the perspective of the ECHR/EU Charter, with the necessary distinction between doctrinal debate, institutional practice, and litigation.

In terms of supervision, the new regime intensifies the link between prudential and conduct: DNB is called upon to oversee the soundness and ‘controllability’ of the transition, while AFM takes center stage in terms of information and communication to members, in a context that the institutions themselves describe as complex and potentially conflictual. Initial institutional assessments (2024–2026), including international analyses of the transition to a defined-contribution regime and references to transitional milestones, show that the success of the reform depends to a large extent on the quality of governance, the transparency of decisions and the capacity for proportionate enforcement.

[5] Furthermore, the results of the analysis conducted by the European Commission (Savings and Investment Union) on March 19, 2025, highlighted the potential opportunities of long-term savings managed by pension funds as a tool to increase, through investments in production, the development of the internal market to make it increasingly efficient and competitive: see European Commission (2025): Saving and Investment Union. A strategy to Foster Citizen Wealth and Economic Competitiveness in the EU.

[6] In this sense, the need to address the demographic challenge related to the longevity society should be reviewed in light of financial models that are effectively capable of building a regulatory framework that can fulfill the crucial function of the economy in meeting social needs. Specifically, the intention here is not to pursue a purely formal requirement to recognize the social security system in the Constitution, but rather to satisfy the need to overcome the historical dynamics of resource allocation that have favored public debt securities.

[7] On this subject, see P. Fersini, in AA.VV. Le Casse di previdenza tra autonomia e responsabilità I professionisti, il risparmio, l’economia reale (edited by) F. Merola- M. Caroli- V. Francola- C. Iaione- P. Fersini, with an introduction by F. Bassanini, pp. 116 ff. Rome, 2017 LUISS University Press. For a perspective on the interventionist state in strategic sectors of the US economy, see M. Mazzucato, Lo Stato Innovatore, Bari, 2020, pp. 115 ff. D. Maresca, I Parametri finanziari dello Stato imprenditore e committente, Turin, 2020. On the historical development of Italian industry, in its social and political components, see G. Tarello, Storia della cultura giuridica moderna (History of Modern Legal Culture), Bologna, 1976.

[8] Parliamentary Commission for the Control of the Activities of Entities Managing Compulsory Social Security and Welfare Schemes. Fact-finding investigation into financial investments and the composition of the assets of social security institutions and pension funds, also in relation to the development of the financial market and the contribution made to the growth of the real economy, Hearing of the Acting President of COVIP, April 10, 2025.

[9] Commission, op. cit. “Italian government bonds are by far the most important item in domestic investments (…)”, verbatim, p. 9.

[10] OECD (2024): Does investing in equity markets bring better retirement income outcomes to members of defined contribution pension plans? in OECD 2024 Pension Outlook. OECD (2024), OECD Pensions Outlook 2024: Improving asset-backed pensions for better retirement outcomes and more resilient pension systems, OECD Publishing, Paris, https://doi.org/10.1787/51510909-en. Specifically, here is an excerpt from the report that best exemplifies the issues addressed and outlined therein: “This chapter assesses whether investing in equity markets leads to better retirement income outcomes for members of DC pension plans. (…) Finally, when considering bequests, combining equity investment with regular drawdowns may bring higher total pension payments (benefits while alive plus bequests) than taking a lifelong annuity, but without full longevity protection. The main policy implication of the analysis is that countries should avoid investment regulations that favor investment strategies that are too conservative, in particular for the default option”, p. 78.

[11] F. Capriglione – G. Semeraro, Financial crisis and sovereign debt. The European Union between risks and opportunities, Turin, 2012.

[12] As a first approximation, in order to implement the range of investment instruments available to social security institutions, the function of protecting savings carried out pursuant to Article 47 of the Constitution could also be reconsidered. In fact, the consistency of broader investment criteria than those required by law must be analyzed in relation to the institutional role of social security institutions in relation to the paradigm referred to in Article 38 of the Constitution.

For an overview, see Ciaccio, Il diritto alla previdenza nella prospettiva costituzionale (The right to social security from a constitutional perspective), Turin, 2024. M. Gambacciani, La previdenza complementare nell’evoluzione dei principi costituzionali (Supplementary social security in the evolution of constitutional principles), Riv. dir. sic. soc., issue 3, December 2012. R. Pessi, The legal ‘system’ of social security, in Arg. dir. lav., 1997, p. 66 ff. ID Supplementary social security between constitutional function and competition, in Mass. giur. lav., 2005, p. 484 ff. ID Social security and welfare protection in the Constitution. Economic solidarity and social sustainability, in Riv. dir. sic. soc., 2019, pp. 37 ff. T. Treu, Public and private in social security, in Riv. prev. pubbl. priv., 2001, p. 7 ff. R. Casillo, Supplementary social security and constitutional values, in Dir. merc. lav., 2008, p. 460. O. Bonardi, Separate in casa? La distinzione tra previdenza e assistenza oggi, Riv. dir. sic. soc., fasc. 4, December 2021. M. Cinelli, Previdenza sociale e orientamenti della giurisprudenza costituzionale, in Riv. it. dir. lav., 1999, I, p. 73 and spec. p. 99. M. D’Onghia, Social security rights and economic compatibility in constitutional jurisprudence, Bari, 2013. T. Martines, Constitutional law (completely revised edition edited by) G. Silvestri, Milan, 2020.

[13] On this point, see V. Ciaccio, The right to social security from a constitutional perspective, Turin, 2024, pp. 105 ff. R. Pessi, Supplementary social security between constitutional function and competition, Report presented at the Conference, Supplementary social security and competition between pension funds, CNEL, Rome, May 3, 2005. M. Bessone, Economic Constitution and Private Social Security Regulations. The Financial Market Activities of Pension Funds, Legal Policy, issue 1, March 2022. Ministry for the Constituent Assembly. Commission for Studies Relating to the Reorganization of the State. Volume, I^ Constitutional Problems, Organization of the State. Rome, Fausto Failli Printing House, 1946. ID. Proceedings of the Commission for the Study of Labor Issues, I, Reports-Questionnaires-Interrogations-Inquiries, U.E.S.I.S.A. Printing House, Rome, 1946. Ministry of Labor and Social Security. Report of the Commission for the Reform of Social Security, II Ed. Expanded edition of the proceedings of the Health Commission, Rome, 1949.

[14] Furthermore, one wonders whether the prohibition on providing state safeguards to private social security entities can be considered constitutional, insofar as these are guaranteed to the public sector. This is in addition to the general provision of Article 38, paragraph 4, of the Constitution, which ensures a uniform scale of values in the field of social security (“The tasks provided for in this article shall be carried out by bodies and institutions established or integrated by the State”).

[15] Article 1, paragraph 3, of Legislative Decree No. 509/1994: ‘Direct or indirect public funding is not permitted, with the exception of funding related to relief and the taxation of social security contributions'[15] .

[16] On subsidiarity, see F. Gallo, Il futuro non è un vicolo cieco. Lo Stato tra globalizzazione, decentramento ed economia digitale (The future is not a dead end. The State between globalization, decentralization, and the digital economy), Palermo, 2019.

[17] For a reconstruction of the relationship between technology and politics, we recommend consulting G. Guarino, Scritti di Diritto pubblico dell’economia e di diritto dell’energia (Writings on Public Economic Law and Energy Law), Milan, 1972. On the classification of economic law within the legal sciences, see M. Severo Giannini, Diritto pubblico dell’economia (Public Economic Law), Bologna, 1977. On financial markets and trade regulation, see M. Sepe, in AA.VV. Diritto pubblico dell’economia (Public Economic Law). Essays and monographs on economic law. Series edited by F. Capriglione (ed.) M. Pellegrini, Milan, 2023, pp. 425 ff. On the role of investment in a developed economic policy, see also the work of Hyman P. Minsky, Keynes and the Instability of Capitalism, with an introduction by R. Belfiore, Milan, 2021.

[18] On this point, interesting food for thought can be found in Matthias Schon Deutsche Bundesbank, Long-term outlook for the German statutory pension system, Discussion Paper Deutsche Bundesbank, no. 22/2020. The author proposes a reform that takes into account the systematic link (indexation) between pensions and increased life expectancy. See Alan Walker and Lian Foster, The Political Economy of Ageing and Later Life, Massachusetts, 2014.

[19] On this point, see C. Giorgi, La previdenza del regime. Storia dell’Inps durante il fascismo, published online, 2009.

[20] This refers to the well-known problems of compliance with the Constitution of regulations which, even in the context of banking foundations, have been outlined in general principles, see Council of State, no. 1354/2002, http://www.astride.on.line.

[21] Reference is made to the possibility that private financial instruments, in the form of supplementary pensions, may contribute alongside public instruments to the consolidation of the real economy. With regard to state intervention in the economy, for Italian literature, we recommend consulting F. CAPRIGLIONE, Nuova Finanza e Sistema Italiano, UTET, Milan, 2016; M. Pellegrini, A. Sacco Ginevri, Il ruolo dello Stato nei settori strategici dell’economia, in AA.VV., Corso di diritto pubblico dell’economia (edited by M. Pellegrini), Padua, 2016, 453 ff. On the subject of Golden Powers, see A. Sacco Ginevri, Golden powers and the functioning of strategic enterprises, in Foreign Direct Investment Screening – Control over foreign direct investment, edited by G. Napolitano, Bologna, Il Mulino, 2019, 153 ff. See also A. Pinazzi, Review of Benedetto Croce, Reduction of the Philosophy of Law to the Philosophy of Economics, edited by C. Nitsch, Giuffrè, Civiltà del diritto, 2016, available at: Riv. Dir. comp., Comparing Fundamental Rights in Europe, May 17, 2017, www.diritticomparati.it. For literature beyond Italy, see J. Rawls, A Theory of Justice, Oxford University Press, 1972; R. Sugden, The Economics, Cooperation and Welfare, 1986, Oxford, Basil Blackwell; K. Binmore, Game Theory and The Social Contract, Vol. II, Just Fair, Cambridge, Massachusetts, MIT Press, 1998. R.H. Coase, The Nature of the Firm, in Economica 4, 1937, republished in the text by G. Sobbrio; C. North, Institutions, Institutional Change and Economic Performance, Cambridge University Press, 1990; J.J. Laffont, J. Tirole, A Theory of Incentives in Procurement and Regulation, MIT Press, Comb., Mass., USA and United Kingdom, 1993. G. SOBBRIO, Organizational Models and Public Intervention, in Economic Review, no. 2, 1995. G. Brosio, The Economic Theory of Organization, Bologna, 1989. O.E. Williamson, The Economics of HarvesterWheatsheaf, New York, 1986. A. Peacock, R.A. Musgrave, Classics in the Theory of Public Finance, MacMillan, London, 1958.

[22]Pauline Deschryver, Patrick Dougherty, Jumi Kim, Laura Kunstler-Brooks, Jiaru Qin, Jing Wu, Shan Wu, and Bingjie Zhou, Pension Systems Climate Risk: Measurement, Mitigation, in International Bank for Reconstruction and Development / The World Bank, Washington, 2020. The study examines the potential risks arising from climate change on markets and, consequently, on pension funds. Overall, the analysis indicates that pension funds are vulnerable to climate risk due to the impact this may have on the market. See also F. Munari, International Environmental Protection, in AA.VV., Institutions of International Law, edited by S.M. Carbone, R. Luzzato, A.S. Maria, Turin, 2006, p. 463 ff.; A. Police, The Administrative Judge and the Environment: Objective or Subjective Jurisdiction?, in volume no. 10 of the A.I.D.U., Environment, Administrative Activity, and Codification, Proceedings of the First Colloquium on Environmental Law – Teramo, April 2005 (edited by D. De Carolis, E. Ferrari, and A. Police), Milan, 2005, pp. 297 et seq.; G. Landi, The environment in Community law, in L. Mezzetti (ed.), Manual of environmental law, Padua, 2001, p. 40 ff.; G. Terracciano, The protection of environmental assets; the management of landscape restrictions, in Gazzetta ambiente, no. 4/5, 1995, pp. 239 et seq. On the subject of economic instruments aimed at ‘incentivising’ operators to reduce pollution, see the OECD document ‘The use of economic instruments for pollution control and natural resource management in EECCA’, CCNM/ENV/EAP, 2003, at http://www.oecd.org; Report by the European Environment Agency entitled “Environmental taxation and EU environmental policies,” 2016, at http://www.eea.europa.eu; OECD report entitled Environmental Fiscal Reform, Progress, Prospects and Pitfalls, 2017, at http://www.oecd.org. In the literature, on the subject of measures aimed at regulating productive activities, see A. Daidone, R. LUPI, Environmental taxes as a link between “negative externalities” and manifestations of wealth, in Dialoghi tributari, no. 2 of 2013, p. 132 et seq.; A.C. Pigou, Economics of Welfare, Macmillan, London, 1920; A. Uricchio, Environmental taxes and circular taxation, in Dir. Prat. Trib., no. 5 of 2017, p. 1849; P. Selicato, Environmental taxation between the search for new wealth indices and the consistency of tax systems, in Riv. dir. trib. int., 2004, nos. 2-3, p. 273.

[23] With regard to the involvement of private companies in the adoption of criteria, including operators, aimed at bioclimatic protection, see Directive (EU) 2024/1760 of the European Parliament and of the Council of June 13, 2024, on corporate sustainability due diligence and amending Directive (EU) 2019/1937 and Regulation (EU) 2023/2859, available at http://www.covip.it.

[24]J. Locke, Second Treatise on Civil Government, translated by A. Gialluca, Milan, 1998, see P. Armellini, Le forme del giusnaturalismo moderno (The Forms of Modern Natural Law), in La democrazia nell’età moderna (Democracy in the Modern Age), pp. 71 ff.

[25] Council of State, no. 1354/2002, available at http://www.astride.on.line.

[26] Idem.

[27] Marius Alt, Marius Berger1, and Johannes Bersch, Investor responses to information updates on peer behavior and public investment policy: The case of green investments, Discussion Paper, no. 23-024-07/2023.

[28] On the effects of tax and pension reforms on household investment, see in general the contribution by Kilian Ruppert-NikolaiStähler, Household savings, capital investments and public policies: What drives the German current account? Discussion Paper, Deutsche Bundesbank, no. 41/2020. Holzmann Robert – Piggott John, The taxation of pensions, Cambridge, 2018.

[29]On this point, we recommend consulting Georg Hirte, Pension Policies for an Aging Society, Mohr Siebeck, 2001; the series addresses the issues of supervision and regulation of private pension schemes, pension reform, and the administrative costs of private pension schemes. The series also includes conference proceedings on various aspects of private pension provision, as well as on the relationship between pension schemes and birth rates, see Robert Fenge- Beatrice Scheubel, Pensions and Fertility: Back to the Roots The Introduction of Bismarck’s Pension Scheme and the European Fertility Decline, Cesifo Working Paper No. 4383, Public Finance, No. 09/2013.

[30] The thinking of US Nobel Prize-winning economist Gary S. Becker resurfaces, who addressed issues relating to human behavior from an economic perspective, in interactions operating in various sectors of social and industrial life. Highlighting its not strictly selfish nature (and using a structured method of investigation), Becker emphasized the uncertainty that the future holds for us^[30] to explain the reasons for prudent behavior, in line with present choices with respect to the evolving needs of human beings.

[31]Sneha Agrawal, Timo Broszeit, Ranjit Singh, Nobuyasu Sugimoto, Jay Surti, and Suzette Vogelsang, Global Financial Stability Note, Pension Funds and Financial Stability. International Monetary Fund, Washington, March 2025. On the subject of pension funds, see Bédard-Pagé, Guillaume, Daniel Bolduc-Zuluaga, Annick Demers, Jean-Philippe Dion, Manu Pandey, Léanne Berger-Soucy, and Adrian Walton. 2021. “COVID-19 Crisis: Liquidity Management at Canada’s Largest Public Pension Funds.” Bank of Canada Staff Analytical. Blake, David, Sarno Lucio, and Zinna Gabriele. 2016. “The Market for Lemmings: The Herding Behavior of Pension Funds,” December 2016.

[32]Sneha Agrawal, Timo Broszeit, Ranjit Singh, Nobuyasu Sugimoto, Jay Surti, and Suzette Vogelsang, Global Financial Stability Note, Pension Funds and Financial Stability. International Monetary Fund, Washington, March 2025.

[33]Sneha Agrawal, Timo Broszeit, Ranjit Singh, Nobuyasu Sugimoto, Jay Surti, and Suzette Vogelsang, Global Financial Stability Note, Pension Funds and Financial Stability. International Monetary Fund, Washington, March 2025, p. 3. On this subject, see Breeden, Sarah. 2022. “Risks from Leverage: How Did a Small Corner of the Pensions Industry Threaten Financial Stability?” Speech at an ISDA & AIMA Conference, November 7. Broeders, Dirk, Chen Damiaan, Minderhoud Peter, and Willem Schudel C.J. 2021. “Pension Funds’ Herding.” International Journal of Central Banking, 2021. Chen, Ruo, and Esti, Kemp. 2023. “Putting Out the NBFire: Lessons from the UK’s Liability-Driven Investment (LDI) Crisis.” IMF Working Paper WP/23/210, International Monetary Fund.

[34]Sneha Agrawal, Timo Broszeit, Ranjit Singh, Nobuyasu Sugimoto, Jay Surti, and Suzette Vogelsang, cit.

[35]Georg Inderst, Pension Fund Investment in Infrastructure, OECD Working Papers on Insurance and Private, no. 32, Paris, 2009.

[36] Brett Hammond, Maurer, and Mitchell, Pension Funds and Sustainable Investment, Oxford University Press, 2023. For the regulatory context in India, see India: May Khamis and Sanjaya Panth Financial Sector Assessment Program-Financial System Stability Assessment. Monetary and Capital Markets Department. India, Financial Sector Assessment Program-Financial System Stability Assessment, International Monetary Fund, Washington, 2025.

[37] Inderst, p. 6.

[38] Ibid.

[39] See Spataro, Economia del risparmio e della previdenza, Novava, 2020, p. 326. The author compares theories that have emerged in economic literature, highlighting the central role of pension funds in the markets.

[40] Furthermore, the literature also contains positions in favor of intensifying regulation: “Another segment, private credit markets, has also boomed, reaching over $1 trillion outstanding and rivaling the leveraged loan market. 21 Growth has been partly driven by institutional investors, such as pension funds, foundations, and endowments, with long-term locked-in capital, who are typically not required to mark their positions to current market prices (IMF 2023c). This has reduced liquidity risks, albeit at the expense of increasing the opacity of the market. At the same time, interconnectedness is a key channel of risk, given that most private credit investors are usually non-bank financial institutions (NBFI) that could face a capital call in the event of broader market stress or face losses on their investments”. See Nassira Abbas, Bruno Albuquerque, Jose Garrido, Deepali Gautam, Benjamin Mosk, Thomas Piontek, Anjum Rosha, Thierry Tressel, and Aki Yokoyama, Corporate Sector Vulnerabilities and High Levels of Interest Rates in International Monetary Fund Department, Policy, and Review. Monetary and Capital Markets and Legal Departments, International Monetary Fund, Washington, 2025.

[41] See Brett Hammond, R. Maurer and O. Mitchell, p. 218.