The Italian government will delay the launch of its private pension reform by two years, implementing the reform in 2008 rather than 2006.

The policy, known as the TFR, or ‘trattamento di fine rapporto’, has been created to boost pensions by encouraging workers to invest the severance pay they receive upon retirement in pension funds. It will also increase Italy’s retirement age from 57 to 60, as of 2008.

The much delayed and much debated scheme has met with a flurry of criticism from government opposition and unions, who claim the scheme has only been delayed to benefit insurers and large businesses.