New pension decumulation rules in Italy have taken effect today (1 July) as the Pension Funds Supervisory Commission’s (COVIP) reform of retirement payout options comes into force, following amendments to the supplementary pension framework introduced in December 2025.

Following a public consultation phase concluded on 29 May 2026, COVIP adopted the implementing instructions on 25 June 2026 under a resolution setting out the new pension benefit framework pursuant to Article 11 of Legislative Decree No. 252 of 5 December 2005, as amended by Law No. 199 of 30 December 2025.

The new regime introduces three alternative ways for members of supplementary pension schemes to access their savings at retirement.

These include a fixed-term annuity linked to remaining life expectancy, flexible withdrawals that allow members to draw down capital within defined limits, and a phased drawdown option in which benefits are paid over at least five years while the remaining capital stays invested.

The options are mutually exclusive and, once selected, cannot generally be revoked.

Pension funds must continue to manage and invest any residual capital throughout the payout phase, meaning retirement income remains linked to investment performance rather than being fully converted into an upfront cash payment or fixed income stream.

However, COVIP has also introduced a transitional implementation period. Pension schemes are required to accept member applications from 1 July but may defer actual payments of the new benefits until their systems and operational processes have been fully updated.

The transition period runs until 31 December 2026, with funds expected to implement the changes as quickly as possible and notify both members and the regulator once ready.

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