GWU defends national insurance proposals

The General Workers Union yesterday presented a 26-page document with suggestions on the pension reform to the chairman of Pensions Working Group, David Spiteri Gingell.

In a statement, the union deplored the media belonging to the Nationalist Party for orchestrating a campaign about the union's report on pensions.

"The union did not recommend raising National Insurance contributions but suggested improvements in the way national insurance contributions should be paid to ensure the sustainability of pensions. The increase is marginal, and only those who earn more than Lm5,000 would pay an extra one per cent, which is far from the eight per cent contemplated in the White Paper," the union said.

"The union based its report on the realties we are living in today and according to its beliefs in social justice and solidarity. It is based on facts and figures and is objective and balanced both in its analysis of the situation as well as in the concrete proposals it has put forward," the GWU said.

Contacted yesterday, GWU secretary general Tony Zarb said the union was being unfairly criticised for suggesting that self-employed persons should pay a higher National Insurance contribution.

"In our report we highlighted that the self-employed, who earn much more than those earning a wage, pay much less tax and that is why we suggested that these should pay a higher National Insurance contribution rate as well. But then they would get a better pension too.

"The pensions fund has to be sustainable. We had the courage to speak about it and make concrete suggestions, but it seems that some are more interested in politicising the issue rather than discussing solutions," Mr Zarb said.

In the report, the union argues that everyone should bear the brunt of reform but that the system should guarantee an adequate livelihood for those who cannot pay or have a low income.

The union suggests that a second pillar pension scheme should be introduced on a voluntary basis while the state pension system, which should be adjusted, should guarantee a decent standard of living for future pensioners.

The GWU report notes that while most self-employed declare a low income early in their working life and thus paid less income tax and NI contributions, they declare higher incomes in later years so that they would get a higher pension.

The GWU says it is against increasing the retirement age to 65, but is in favour of those who keep on working getting an increment on their pension for every additional year they worked.

The union also suggested that the basis of pension contribution should be raised to 35 and not to 40 years, while the pension should be worked out on the best three years of the last 10 years of employment and not on the entire contributory period as the White Paper suggested.