By: HUB’s EB Global Benefits Team

What is it about?

Italy is implementing significant pension and compensation reforms in 2026 that will affect private-sector employers. Changes modify the end-of-service benefit (Trattamento di Fine Rapporto - TFR) framework by introducing annual workforce threshold recalculations and automatic allocation of TFR accruals to pension funds for new hires unless they opt out within a shortened timeframe.

In parallel, the renewed executive Collective Bargaining Agreement (CCNL) for the tertiary, distribution, and services sector mandates structured salary increases and higher welfare and pension-related contributions for 2026–2028. Together, these measures increase employer funding obligations, tighten compliance requirements, and may have accounting and workforce planning ramifications.

1. Automatic Enrollment for New Hires

From July 2026, newly hired private-sector employees will have their TFR accruals automatically transferred to the designated employer pension scheme per the applicable industry wide collective agreement, unless they decide otherwise within 60 days of hire.

This significantly shortens the election period from the previous 6 months introduced under the 2007 reform. During the initial 60-day period, employees may direct the TFR contributions to a supplementary pension fund or keep the TFR accruals within the company.

Employers are required to inform new hires at onboarding about their TFR options, the 60-day deadline, and the opt-out process.

The new law also introduces the portability of employer’s pension contributions. Employees will be allowed to transfer them to supplementary pension funds other than the industry-wide funds.

These measures are intended to boost employee participation in pension funds.

2. New Workforce Rules for TFR Payments

Certain employers must transfer the TFR accruals to the social security (INPS) Treasury Fund. This requirement applies to employees working at companies of a certain size who elect to keep the TFR accruals within the company. Effective January 2026, the new workforce size thresholds are:

  • 60+ employees for 2026–2027
  • 50+ employees for 2028–2031
  • 40+ employees from 2032 onward

Under the revised rules, employers must recalculate their workforce size annually based on the average number of employees in the previous calendar year.

If the employer meets the applicable threshold in any given year, TFR accruals for all employees must be paid into the Treasury Fund for future service too. This obligation continues even if the workforce subsequently falls below the threshold.

3. Executive CBA Increasing Benefits

Italy’s renewed Collective Bargaining Agreement (CBA) for executives in the tertiary, distribution and services sector introduces structured salary increases and higher benefit-related contributions for the 2026–2028 period.

The CBA strengthens benefit funding, including:

  • A minimum annual welfare credit of €1,500 (approx. USD 1,754) per executive
  • Increased employer and employee contributions to the Mario Negri pension savings fund with early retirement incentives
  • Higher accident insurance premium for employers
  • Enhanced provisions supporting active aging arrangements
  • Continuation of employer health coverage during unpaid leave due to serious illness

Impact on companies

  • Stricter onboarding compliance requirements and employee pension training to enable employees to make more educated elections.
  • Increased administrative complexity due to annual workforce recalculations and managing workflow of pension contributions and TFR accruals to multiple pension arrangements.
  • Opportunity for growth of corporate pension schemes as employers seek to minimize operational work through consolidation of pension providers and employee participation increases.

Suggested employer action

  • Conduct a 2025 workforce size analysis to assess the new threshold rules to transfer TFR accruals to INPS.
  • Update onboarding processes to ensure compliance with the 60-day TFR election requirement effective July 1, 2026.
  • Coordinate with payroll, pension administrators, and finance teams to ensure operational readiness.
  • Develop employee education material about pension savings to allow for more informed decisions on the allocation of their contributions.
  • Model the financial and accounting impact of potential transfer of TFR accruals.
  • Update executive compensation budgets for 2026–2028 to reflect mandatory salary and benefit contribution increases.
  • Review severance and separation planning costs for executives, considering new outplacement funding obligations.

If you have any questions, please contact your HUB advisor. View more updates in our Global Benefits Directory.