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Italy cuts parliamentary pensions, in victory for 5-Star

ROME (Reuters) - Italy’s lower house of parliament voted on Thursday to cut the pensions of former lawmakers, making good on a pledge by the anti-establishment 5-Star Movement to hack back parliamentary privileges.

Curbing the perks and benefits of politicians seen as out of touch with ordinary people has always been a clarion call of the party founded in 2009, which formed a government last month with the right-wing League.

According to a study by Rome-based think-tank Vision, the total cost of running Italy’s 630 seat Chamber of Deputies is almost the same as the costs of the equivalent chambers of Britain, Germany, France and Spain put together.

The generous pensions of parliamentarians is a particular grievance for Italians who have seen their own pension system reformed in recent years to hike the retirement age and reduce the cost of outlays from state coffers.

The contribution-based system approved by the Chamber on Thursday sharply cuts the pensions of almost 1,400 former deputies, some of whom have vowed to appeal in the courts.

The change will take effect from January next year and lower house speaker Roberto Fico, from 5-Star, estimates it will save the state some 40 million euros ($46.70 million) per year.

The previous system ensured a life-pension, or “vitalizio,” for anyone who had served in parliament even for a single day.

“Bye-bye Vitalizios,” Deputy Prime Minister and 5-Star leader Luigi Di Maio wrote on the party’s blog. “Our movement was born partly to achieve days like today, when a dream becomes reality: it’s a dream of normality, of rules that become the same for everyone, of injustices that are canceled out.”

The reform was part of the joint program drawn up by 5-Star and the League before taking office, and was pushed through quickly by Fico. Lawmakers’ pensions are governed by parliament’s own internal rules, so he was able to make the change by a simple directive without the need for a new law.

Initial reservations by some League lawmakers were overcome after their leader Matteo Salvini said on Wednesday scrapping privileges was a party “priority” and politicians’ rights “should be no more and no less than those of ordinary Italians.”

Ex-deputies whose pensions are cut by more than half under the new system will be guaranteed a monthly cheque of at least 1,470 euros. The others will get at least 980 euros.

However, the 315 seat upper house Senate has not yet made the same change and its speaker, from Silvio Berlusconi’s opposition Forza Italia party, says she is worried it would unfairly hit former senators’ “acquired rights”.

Di Maio said on Thursday that as part of a broad pensions overhaul the government will also cut the so-called “golden pensions” of all those who get net monthly pay-outs of more than 4,000 euros which are not funded by contributions paid.

Editing by Catherine Evans