As part of the 2026 Budget Law, the government introduced changes to the end-of-service benefits system (Trattamento di Fine Rapporto – TFR). Effective July 1, 2026, TFR accruals of first-time employees in the private sector will automatically be directed to a pension fund, unless the employee decides otherwise within 60 days from hire. The automatic enrollment will also trigger minimum employee and employer contributions as specified under the pension fund. The aim is to increase the share of the workforce enrolled in an occupational pension plan, which is currently around 20% (Commissione di Vigilanza sui Fondi Pensione data).
Under the new system, effective July 1, 2026, new employees in the private sector will be automatically enrolled in either the pension fund specified in the applicable collective bargaining agreement or the fund most widely used by company employees — unless they decide to leave their TFR accruals within the company or direct them to a different fund. If the employee doesn’t choose within the first 60 days of employment, a tacit consent mechanism applies. Under this mechanism, employers must direct the employee’s TFR accruals (since the date of hire) as well as minimum employee and employer contributions as defined in the applicable pension fund. Note: A similar tacit consent mechanism already in place is triggered six months after the hire date and only applies to TFR accruals.
Under additional rule changes, certain companies must transfer TFR accruals to the National Institute for Social Security (INPS) Treasury Fund, for those employees who decide to leave their TFR accruals in the company (instead of directing them to a separate pension fund). In 2026 to 2027, companies with an average of 60 or more employees in the previous calendar year must transfer TFR accruals for such employees to the INPS Treasury Fund. In 2028 to 2031, the prior-year threshold will be 50 employees, decreasing to 40 employees from 2032. Previously, the company size threshold triggering the obligation was 50 employees, but the reference year for the determination was 2006 or the first year of operations, if later, so companies that first exceeded the threshold in subsequent years were exempt.
Employers should align their policies with the new rules on automatic enrollment; ensure new hires are informed about available options, including relevant deadlines; and prepare for any resulting labor cost increases. Companies that previously could maintain internal book reserves for TFR accruals but exceeded the 60-employee threshold in 2025 should prepare to transfer prospective TFR accruals from January 1, 2026, to the INPS Treasury Fund, pending specific instructions from the INPS.
