Pension fund auto-enrolment in Italy: what changes for new hires from 1 July 2026

What has changed

Under the 2026 Budget Law, from 1 July 2026 silence no longer means "TFR stays with the employer" for new private-sector hires. It means the opposite: anyone not already in a supplementary pension scheme is automatically enrolled in the industry-wide pension fund set by their collective agreement, from their first day of work.

• Who it applies to: private-sector employees hired from 1 July 2026 who aren't already members of a fund.
• Who is excluded: contracts lasting up to two months.
• What is paid in: three components together, namely TFR severance pay, the employer's contribution and the employee's contribution set by the contract.
• How to opt out: within 60 days of being hired, with a declaration to your employer.

What it means for your payslip

Staying in the fund has two immediate effects. Your TFR stops building up with the employer and goes to the fund instead; and your own contribution, usually a small percentage of pay, is deducted every month, so your net pay drops slightly. In return you get the employer's contribution, which you wouldn't otherwise receive, and a tax deduction on your contributions of up to €5,300 a year.

Stay or opt out? The right questions

1. How big is the employer contribution? In industry-wide funds it's extra money you only get if you stay. It's often the main reason not to opt out.
2. How much does the fund cost? Industry-wide funds are usually cheap. Check the ISC, the synthetic cost indicator published by COVIP.
3. When will you need the money? The fund is locked until retirement, apart from advances and RITA. If you expect to need liquidity soon, for example to buy a home, or plan to stop working very early, weigh this carefully.
4. What's your tax rate? The higher it is, the more the deduction is worth: from 23% to 43% of what you pay in.

For most employees, staying in a low-cost industry-wide fund is the most efficient choice. The exceptions are the same ones I describe in the guide TFR: employer or pension fund.

If you stay: two things to do now

• Check your investment option. With auto-enrolment you're placed in the option the fund uses for people who don't choose. If you have twenty years or more ahead, an overly cautious option risks returning less than inflation: consider switching.
• Consider paying in more. The minimum contribution unlocks the employer's, but the deduction goes up to €5,300 a year. You can estimate the tax saving with the pension fund vs ETF calculator.

If you want to stop working before pension age, the fund needs to fit into a plan that also includes your free portfolio and the INPS pension: see the guide pension fund or investment plan.