The number of those who reach retirement in Italy and after go to live abroad is rapidly growing in recent years - says the Italian Social Security (INPS) - and represents a loss to the Italian economic system.
In September 2015, the president of INPS Tito Boeri presented a detailed report prepared by his institution on pensions paid abroad from 2010 to 2014 to public and private workers. The study starts with an analysis of migration of the population then focus on Italian migration, with an extensive appendix that deepens specific aspects.
They studied workers emigrated during their working life, for example in Argentina, and foreigners who came to work in Italy and have now returned to their country of origin. However we focus on Italian workers who have decided to move abroad after retirement in Italy.
The escape of pensioners
The INPS points out that: "The pensioners belonging to the 60-64 age range are concentrated precisely in Europe, where there is the 73% of all the pensioners abroad of this age. In addition, in Europe, the percentage of retired with less than 70 years reaches 30%".
The research examines a specific aspect: every year, it is growing up the number of retired people in Italy who emigrate and get their pension abroad.
From 2003 to 2014, they are a total of 36,578 people, with an annual gross pension of € 32,000 (annual total € 1.2 billion).
“Although this is still a limited phenomenon in absolute terms, in recent years a growing number of retirees moved to countries where there is an adequate level of social services, in particular health care, the cost of living is lower than what happens in Italy and the weight of the tax authorities accounts to a lesser extent on pensions. It has been noted that in those countries the average monthly amount of the check is higher, a sign that even holders of medium-high pensions emigrate. Even retirees of public sector begin to move abroad to take advantage of their professional experience in other countries (as for example in the case of the military) or to benefit from the mentioned advantages".
“So, beside the so-called brain drain [...], it begins to become evident even a so-called pensioners' escape, who for personal reasons, for economic reasons and for expectations of a different quality of life choose to settle in countries other than our own. Also this phenomenon, though more limited than the first, has economic and social repercussions: the payment of a pension abroad represents an economic loss to Italy, because the amount paid does not fall in the form of consumption or investments and generates a lower volume of tax."
Considering the private management, but the same applies to the public one, it is noted that: "The increase in the period is very high, equal to 113%, and 2014, compared to 2013, has recorded a percentage change of more than 78% . [...] It should be noted that there have been large increases even in countries that today represent the "new destinations" especially for tax laws and cost of living more favorable, such as Bulgaria, Poland, Romania and Slovenia. "
As a final commentary, Boeri detects a fact and asks a question:
"The emigration of pensioners is growing while the immigration of retirees is at stake.
Why not invest in services for elderly (eg. HCP), in order to reduce the escape of pensioners and attract retirees from abroad?"
The number of pensioners on the run is significant in absolute terms, but it is small compared to the total amount of pensions paid. Why then INPS uses tones so worried and devotes so much of the research to this aspect?
The reason is that the phenomenon has an exponential growth trend from year to year. All the indicators suggest that growth in 2015 compared to 2014 will be even greater than the impressive 78% growth of 2014 vs. 2013.
Considering the mood of the moment, we see that public concern on this issue is increasing and this is highlighted by the media coverage and by the favorable tone used. Finally, let's consider that most of these retirees relied only to word of mouth and had a do-it-yourself approach but soon the majority will realize that there are more structured services and begin to use them!
What can Italy do to reverse the trend? It can not prevent the escape by legal means, because the free movement of persons and agreements to prevent double taxation are enshrined in international treaties.
Among the factors cited by INPS, the cost of living is difficult to change, but it is possible to intervene on the quality of services, in particular health, and on fiscal policy towards pensioners: it is what Bulgaria, Poland, Portugal, Romania and Slovenia (among others) have done. This is the Boeri's proposal and it is, in our opinion, the only way to stop the phenomenon before it assumes alarming proportions. Besides the practical aspects, it has the advantage of restoring pensioners' dignity, not assessing them as parasites to squeeze every budget law, but as valuable resources to attract and respect.