Population aging is rapidly increasing long-term care (LTC) needs and putting growing pressure on public welfare systems. In Italy, the publicly funded LTC system remains structurally underfinanced despite rising demand.

This paper assesses the financial feasibility of integrating comprehensive LTC coverage into the Italian Notional Defined Contribution (NDC) pension system. Using an extended multistate actuarial framework calibrated to Italian administrative data, we evaluate two alternative integration designs: Enhanced Pension Annuities (EPA) and Life Care Annuities (LCA), under different allocation rules for the net Survivor Dividend (SD), defined as the notional capital released by contributors who die before retirement, net of survivor protection.

We show that financing total LTC expenditure within the NDC framework requires an additional contribution rate of between 3.48 and 4.59 percentage points under LCA, depending on the SD allocation rule and on whether system balance is assessed at the cohort or macro level.

Under EPA, by contrast, the financing burden is shifted from contribution rates to pension adequacy. The net SD is sizable and comparable in magnitude to current public expenditure on home-based LTC in Italy.

Its allocation to LTC financing mitigates, but does not eliminate, the trade-off between higher contribution rates under LCA and lower pension adequacy under EPA, with relevant inter- and intra-generational distributional implications.