INPS and pensions, a letter from Tridico to employees: the demographic crisis is a mine in the budget, the impact of inflation on accounts already in 2023

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A crash course, with the important challenge of Covid won and the ever-increasing level of user satisfaction: these are just some of the results announced by the INPS President, Pasquale Tridico, the Vice-President, Luisa Gnecchi, and the other members still in the office of the Board of Directors, Patrizia Tollini and Roberto Lancelotti, in a letter Farewell and thanks to the staff of the Institute. A letter signed on the 11th of May also points out the far-reaching risks that cannot be neglected and which arise on the course of the institution and which the Extraordinary Commissioner will have to deal with immediately, and which the Government will have to identify soon after choosing to cancel. The current leaders of the INPS (and Inail) and begin the process of redefining the Institute’s governance. For Tridico and all of the outgoing board members, there are two unknowns in particular that could undermine the balance of the budget: the trend of demographic growth, that is, the phenomenon of declining birth rates accompanied by a rapid aging of the population, and the effects of comparable pension checks, driven by the sweat of inflation, that are not matched. Similar wage growth.

The course of the presidency and the board of directors

The mandate of the current board of directors, which the government suddenly decided to block in a kind of blitzkrieg, began on April 15, 2020. It was expected from March 14, 2019 with a phase in which Chairman Tredico played the role of the prepared organ. the powers of the board of directors.

The challenge of Covid and $60 billion in benefits delivered between 2020 and 2021

In the welcome and thank you letter to the employees, Tridico and all members of the outgoing Board of Directors note first and foremost how the path it has taken in recent years has not been easy. Especially due to the outbreak of the epidemic. “The letter states that the INPS has faced the most complex challenge in its history, cooperating in maintaining the country’s economic and social order and facilitating its subsequent recovery.” In the biennium 2020-2021 alone, the institute supported 16 million citizens by providing benefits to 60 billion. An effort that also paved the way for a budget deficit. But the president and the board of directors are keen to point out that “after the serious economic crisis the institute closed the last of its consolidated balance sheet with a surplus of 2 billion”.

Internal spending of 385 billion: one-third of it is absorbed by aid and two-thirds by pensions

The letter states that the budget includes 385 billion in spending (more or less half of the entire country’s public spending): about a third in the social assistance “share” and two thirds for pensions. Tredico and members of the governing boards state that this spending “if appropriately classified into various items according to international statistical standards, including pensions, family support, disability and unemployment, is generally in line with the spending of developed EU countries”.

of demographic trends and risk indexing of INPS accounts

The indications given in the letter follow the alarms raised several times by Tridico himself: first of all, we read that “the trend of demographic growth in Italy endangers the balance of the budget and opens up new challenges for managing future scenarios”. In other words, the gradual aging of the population associated with the phenomenon of declining birth rates risks turning into a threat to the accounts of the enterprise and the sustainability of the entire social security system. But it is not the only one: «The recovery of inflation, starting in 2022, especially in the face of the ongoing wage and contribution dynamics, poses critical issues as early as 2023, Consider indexingeven if not 100% for all retirees, of pension benefits.