Originally intended as a means to support long-term Italian businesses, Individual Savings Plans (Pir) have recently captured attention specially for capital outflows.
To revive this product, which has precise constraints on those who manage them so as to channel money from families to Italian businesses, the League has introduced an amendment to the “anticipatory decree,” approved in the Senate Budget Committee, potentially encouraging additional subscriptions. In certain circumstances, the possession limit of a single Pir may be lifted.
According to the amendment, whose primary sponsor is Senator Elena Testor, it will be possible to hold more than one ordinary Pir, provided it was established from January 1, 2020, onwards, with the same intermediary or insurance company.
The maximum investment limit, however, remains unchanged at 200,000 euros (and 40,000 euros per year).
With this amendment, individuals holding a Pir with an invested amount below the maximum limit will have the opportunity to access other Pirs offered by the same intermediary, with the potential for additional tax benefits—particularly exemption from the capital gains tax (at 26%), provided the investment is held in the fund for at least five years.
“We welcome this initiative,” Intermonte had stated based on press leaks before the amendment’s approval. “We believe it could boost inflows into Pir funds, as the advantage of diversifying across multiple Pir products could increase individual investments.”
Pir, a Tearful Year in 2023
The relaxation of regulations on Pirs comes after a challenging year for this instrument. In the second quarter, ordinary Pirs experienced outflows of 610 million euros, while alternative Pirs showed inflows of 0.7 million euros, according to the latest data from Assogestioni. Ordinary Pirs managed 17.5 billion euros at the end of June, and alternative Pirs managed 1.5 billion euros.
In July, August, and September, Pir flow data remained discouraging, according to the Osservatorio del Sole 24 Ore, recording -169.4 million euros, -87.5 million euros, and -163.4 million euros, respectively. These figures brought the total outflows in the third quarter of 2023 to 420.3 million euros.
Some investors may have chosen to cash in their Pir investments to redirect funds elsewhere, influenced by positive performance upon reaching the five-year minimum investment period for tax benefits—a move opportunistically aligned with the instrument’s constraints.
Intermonte Sim predicts that a total of 1.9 billion euros will have exited Pirs in 2023, assuming an improvement in flows in the fourth quarter.
“In the long term, we expect interest in this product to remain quite high,” Intermonte stated in its latest report, “thanks to the tax benefit and, from the distributor’s perspective, the ability to rely on a long-term commitment from the investor.”
