by Elsa Fornero, published in Bankers, Markets and Investors, n. 134, 2015.
Pension reforms have technical and political features and are meant to motivate changes in behavior. Their effectiveness depends on the ability of citizens to recognize and generally approve their necessity and design. Financial literacy has important implications not only for personal wealth formation but also for pension reforms. Without a basic understanding by citizens, reforms risk having little or no effect or even being reversed. This is particularly true of pension reforms because of their profound impact on people’s life plans. The 2011 Italian pension reform is a case in point.