Governance of Italian pension funds: problems and solutions

In this paper we investigate the governance structure of Italian pensions funds. First, we conduct a brief but critical review of the theoretical and empirical literature, in order to identify the areas where major improvements are necessary: a) the skills and competence of the trustees; b) the definition of tasks and responsibilities; c) the handling of conflicts of interest. Secondly, we assess the governance of closed and open pension funds in Italy by analyzing their bylaws and other fund documents. Our main findings are: a) the average skill level of the trustees is still inadequate, despite the remarkable improvements made following recent reforms; b) there is no clear definition of the responsibilities of the various governing bodies; c) there is no clear policy for handling conflicts of interest. Finally, we observe that in these areas the potential role of self-regulation has not yet been fully exploited.