Times of Malta (February 22) carried an interesting contribution about the gender pension gap.
It was reported that in Malta, females receive 42 per cent less than males from pension entitlement. In fact, Malta placed second in Europe as having the highest pension gap between genders.
The pension reform not only failed to address the above issue but created other pension gaps which involve both genders. For the time being, there is no awareness about the financial implications involved to the detriment of thousands of pensioners of both genders.
The impact on women will be worse.
Among a considerable number of changes in the conditions for the entitlement of a pension, the measures in the reform were directed to divide pensioners in two groups. Category A are people born on January 1, 1962 and after, while category B are people born on December 31, 1961 and before.
This unjust decision is not only a very good example of age discrimination but a far cry from social justice and solidarity between generations.
It has to be pointed out that the rate of two-thirds pension applicable in each case depends entirely on the following pillars: the yearly average of paid and credited contributions; the pensionable income which is calculated on income from employment; the maximum pensionable income which determines the highest rate of pension applicable; and the national minimum pension for low-income earners.
According to the new reform measures, a person becomes entitled to a full rate of pension if the yearly average is 52 on a period of 41 years.
Before the reform it was 30 years. In case where the average falls below 15, a person is not entitled to a pension.
About 25,000 pensioners are at risk of poverty and socially excluded
Changes carried out in the calculation of the pension-able income will also contribute to lower rates of pension especially in cases where the average is deficient.
The reform provided for a new maximum pensionable income applicable only for pensioners of Category A, which currently has a ceiling of €24,650. On this amount the full rate of two-thirds pension applicable is €316 per week.
On the other hand, category B pensioners remain attached to old MPI which is €19,017. On this ceiling, the amount of pension is €243 per week.
On the figures quoted above it can be noted that there is a difference of €73 per week in pension rates between category A and B. This measure results in a 30 per cent gap in the rate of pension between pensioners who paid the highest rate of contribution as requested by law during their employment.
Other pension gaps will result when pensions are revised in January of each year as required in terms of law.
In these unpleasant situations where both genders are the scapegoat of an unfamiliar pension reform which looked after the sustainability of the system but ignored completely the adequacy dimension, it is important to support one another and raise our concerns with the current administration to mitigate this financial problem faced by thousands of pensioners before it is too late.
All pensioners must be treated equally. The pay-as-you-go system was based on solidarity between workers and pensioners. Any measures to disrupt this system are deplorable and unjust.
Currently about 25,000 pensioners are at risk of poverty and socially excluded.
The pension reform not only failed to address the existing problems but is a contributor towards the increase in number of these vulnerable persons as they grow older.
Creating pension gaps between pensioners goes against social justice and undermines the principle of social solidarity.
Carmel Mallia is president of the Alliance of Pensioners Organisation.