I would like to thank Arnold Cassola for his recent article in Times of Malta regarding the above subject. By 2027, the number of retired pensioners in this age group will reach about 100,000. Pensioners should be grateful to Cassola for raising awareness about the financial problems they will be facing in a few years’ time.
Unfortunately, there are no discussions about this problem which is simply swept under the carpet.
Pension reform started in 2007 and revisions were carried out every five years. The purpose of the reform was to introduce measures to ensure the sustainability and adequacy of the pension system.
The measures taken to address sustainability were fruitful whereas the adequacy dimension was not addressed.
It must be pointed out that the two-thirds pension rate depends on two factors, namely the yearly average of paid and credited contributions and pensionable income.
Since the introduction of the two-thirds pension scheme in 1979, the law provided for a maximum rate of pension. It also provided for a ceiling/capping which should not be exceeded.
One of the measures implemented by the reform was the introduction of a new maximum pensionable income applicable only to persons born on January 1, 1962 and after. The current maximum pensionable income is applicable to persons born on December 31, 1961 and before.
Presently, the maximum pensionable income of Category A persons (born after January 1, 1962) is €26,056 whereas that of Category B persons (born on December 31, 1961 and before) is €20,423. There is a difference of €5,632 resulting in €72 per week more in the rate of pension between the two categories of pensioners. The gap will widen in the future.
In this scenario, it is pertinent to ask why MPs of both political parties as well as trade unions prefer to remain silent about this very important issue which is a threat to the well-being of pensioners.
It is not only a perfect example of age discrimination but it can be considered as a tool to erode the income of thousands of pensioners. It is a threat to the purchasing power of the elderly and can push them further towards the risk of poverty.
Come election time, pensioners should not remain silent on this important matter- Carmel Mallia
In terms of law, where a person paid the highest rate of contribution, that person is entitled to the full rate of pension. This can be considered as an agreement entered between the director of social security and the employee/employer. The shifting of the goalposts during the match is not only unjust but dishonest.
If MPs wanted to carry out changes in the Social Security Act to sustain the pension system, they should have found ways to include, not exclude, current pensioners and those who will retire up to December 31, 2026.
It could have been acceptable had the changes carried out in the maximum pensionable income were applicable only to new entrants under the law. They should never have included thousands of pensioners who already form part of the system.
A good example that should have been followed by the Pension Reform Group was that of the treasury pension paid under the pensions ordinance.
Persons who joined the civil service with effect from January 1, 1979 and after are not entitled to a service pension.
Come election time, pensioners should not remain silent on this important matter which is threat to their standard of living and well-being.
They should ask questions to MPs about this injustice as well as age discrimination.
The state and the European Union are there to protect citizens. The segmentation of pensioners into two groups is not only unjust but a poor example of social solidarity between groups.
Carmel Mallia is the honorary president of the National Association of Pensioners.