Annuities, what they are and why it is wrong to call them that

Annuities

Periodically, during the electoral period, we return to talk about the so-called parliamentary annuities. This term, which came to us directly from the first republic, is formally incorrect, but it is still used to indicate the parliamentary pension that has replaced annuities since 2012. Since then, what was a great privilege for parliamentarians has been significantly reduced, while remaining a more advantageous contributory method than the others.

History The rules for obtaining a parliamentary pension The parliamentary allowance

The history

The so-called annuity checks, that is, valid for life, were awarded to all parliamentarians who had even done a single day of legislature and amounted to a sum much higher than the contributions paid by the representatives. From 1997, to receive the check it was necessary to be at least 60 years old, while before they could be collected at the end of the mandate, but in the event of an election for three legislatures, regardless of age, the possibility of receiving the check immediately remained valid. .

In 2007, the minimum term in office to accrue this right was increased to 4 years, 6 months and one day. While at the beginning of 2012, annuities were replaced by parliamentary pensions, calculated according to contributory methods, in a manner no different from that of other public employees. Furthermore, the right to receive the pension was postponed to the age of 65.

These changes did not have retroactive force until 2018, when the House approved the recalculation of the annuities of former deputies. From that moment, the annuities still granted according to the salary method (ie based on the last salary received and not on the basis of the contributions paid), were recalculated with the contributory method. The new system has led to savings of around 40 million euros a year.

The rules for obtaining the parliamentary pension

To obtain the parliamentary pension you must have completed a mandate of at least 5 years, which formally starts after 4 years, 6 months and one day. Deputies and senators can then begin to receive the pension from the age of 65, which can however be reduced to 60 for each additional year of term of office to the fifth. In practice, a member of parliament who has completed a 6-year term of office will be able to receive a pension at 64, at 63 if he has completed seven years and so on.

The parliamentary allowance

Before retirement, deputies and senators receive what is referred to as parliamentary allowance. It is a sort of salary established by Article 69 of the Constitution, designed to ensure its independence and avoid corruption. The indemnity is about 10 thousand euros gross per month for the representatives of both chambers, equal to about 5 thousand euros net. In addition, at the end of the mandate, the parliamentarians also receive the end of mandate allowance, a kind of severance pay (TFR). This is a contribution equal to 80% of the gross parliamentary allowance, multiplied by the number of years in which one has remained in office.