TFR reform on the horizon. The 2026 Budget Law significantly amends the rules governing severance pay (TFR). This change is set to affect the financial management of a large number of Italian companies. Specifically, the criterion used to determine the obligation to pay accruing TFR into the INPS Treasury Fund is being revised: the “static” system introduced in 2007 will be replaced by a progressively broader and more dynamic model. Although seemingly technical, the reform carries significant financial, balance-sheet, and pension-related implications for many businesses.<\/p>\n\n
The system in force until today<\/strong><\/p>\n\n With the 2007 supplementary pension reform, the INPS Treasury Fund was established, into which the accruing TFR of employees who do not opt for a pension fund is paid.<\/p>\n\n The payment obligation applies exclusively to:<\/p>\n\n The size threshold is verified only once. Over time, this setup has created a peculiar situation: many companies originally structured as SMEs have been able to continue managing TFR internally even after growing beyond 50 employees. In other words, the system has relied on a size snapshot that is now outdated.<\/p>\n\n 2026 Budget Law: the reform<\/strong><\/p>\n\n The new rules do away with this approach and introduce a dynamic, progressive criterion based on a periodic review of company size. The reform provides for a gradual reduction of the size thresholds:<\/p>\n\n Once the applicable threshold is exceeded, the accruing TFR of employees who do not opt for supplementary pension coverage must be paid into the INPS Treasury Fund and can no longer be retained within the company.<\/p>\n\n What does this mean in practice? Certainly, the progressive inclusion of a significant number of companies that have, until now, remained outside the scope of these rules.<\/p>\n\n TFR reform: financial implications for businesses<\/strong><\/p>\n\n For many Italian companies, TFR has historically served as a form of structural self-financing. The ability to retain accruing TFR internally has, over time, helped support company liquidity at a relatively low cost. The new legislation progressively reduces this function. Transferring funds to the Treasury Fund entails:<\/p>\n\n This is why the topic of TFR now takes on a broader dimension, involving financial planning and corporate pension strategy.<\/p>\n\n Supplementary pension schemes: a strategic lever<\/strong><\/p>\n\n In this context, supplementary pension schemes inevitably take on an increasingly central role. Directing TFR to pension funds not only provides a form of pension protection for employees but can also serve as an optimization tool for the company. Let’s briefly look at the main effects. Tax deduction<\/strong><\/p>\n\n A deduction from business income is provided for, equal to:<\/p>\n\n Reduction of contribution charges<\/strong><\/p>\n\n The legislation provides for:<\/p>\n\n Elimination of inflation risk<\/strong><\/p>\n\n TFR retained within the company must be revalued annually according to the mechanism set out in art. 2120 of the Italian Civil Code (1.5% + 75% of inflation). Contributing TFR to a supplementary pension fund eliminates this revaluation mechanism.<\/p>\n\n Balance-sheet effects<\/strong><\/p>\n\n The TFR fund represents a liability to employees recorded in the financial statements. Reducing this provision can help improve certain balance-sheet and financial indicators for the company.<\/p>\n\n A paradigm shift in TFR management<\/strong><\/p>\n\n The reform therefore introduces a gradual paradigm shift. TFR can no longer be regarded merely as an administrative component of labor costs. It becomes, in fact, an element that affects:<\/p>\n\n For many companies, it will therefore be advisable to address this issue through a proactive strategic assessment. It will be necessary to analyze the impacts of the new rules and identify effective solutions accordingly.<\/p>\n\n <\/p>\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" TFR reform on the horizon. The 2026 Budget Law significantly amends the rules governing severance pay (TFR). This change is set to affect the financial management of a large number of Italian companies. Specifically, the criterion used to determine the obligation to pay accruing TFR into the INPS Treasury Fund is being revised: the “static” system introduced in 2007 will be replaced by a progressively broader and more dynamic model. Although seemingly technical, the reform carries significant financial, balance-sheet, and pension-related implications for many businesses.<\/p>\n","protected":false},"author":5,"featured_media":2126,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-2123","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized-en"],"yoast_head":"\n\n
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