Support current pensioners

The pension reform of 2006 divided pensioners into two groups. Group A consists of the future pensioners, those who were born on January 1, 1962 and after. In group B are the current pensioners, those who were born on December 31,1961 and before. This includes those who will retire up to December 31, 2026.

There is a confirmation that the pension working group’s terms of reference covered future pensioners only.

Current pensioners were excluded from the above reform by the minister of finance. The administration at that particular time promised that the needs and pension problems of this cohort will be addressed through budget measures.

The pity is that, during the period 2006 and 2023, the recommendations about pensions put forward by pensioners representatives were never considered for the budget.

In contrast to this situation, the pension working group looked after the interest of future pensioners only and delivered good conditions. This is the reason why the gap between the two groups widened to the detriment of about 100,000 current pensioners.

A case in point, which, at the moment, is very popular is about the capping/ceiling of the maximum pensionable income (MPI). It is a fact that the MPI of current pensioners is about €5,633 less than that enjoyed by future pensioners when they retire.

Presently, this unfair treatment results in a difference of about €72 per week in the rate of 2/3 pension between the two groups.

This injustice can be considered as one of the reasons why the State pension is in complete disarray. The representatives of the people in parliament are all accountable for this situation.

The solemn promises made by various ministers of finance to look after the interest of current pensioners through budget measures were never honoured.

In the circumstances, it is about time that all members of parliament break their silence and start talking about pension problems for the benefit of current pensioners. It is not fair to speak freely about increases in pension rates while throwing other problems under the carpet.

Current pensioners are the victims of circumstances brought about through laissez- faire and lack of action for many years by our MPs to safeguard the interest of these vulnerable people.

In this precarious situation, it is suggested that, in the next budget, the government will start the ball rolling and reform the pension system that includes current pensioners.

Solemn promises made by various ministers of finance to look after the interest of current pensioners through budget measures were never honoured. File photo: Times of Malta

The following recommendations should be considered:

1. A guaranteed national minimum pension for all based on 60 per cent of the national equivalised medium income. This is the norm accepted and applied in the European Union.

2. A capping of the MPI, two-thirds of which would provide a highest pension rate with some relativity to current household income. The MPI has been kept artificially low for over a quarter of a century.

3. Proper indexation of pensions.

4. Breaking the link between service/occupational pension and the contributory social security pension after 40 years. This measure has been carried out in the case of future pension through the pension reform of 2006.

In a just society, efforts will be made to ensure that those in receipt of pensions, together with those at the lower end of the wage structure, would at least have the value of their incomes maintained.

In this regard, Malta lacks a sense of true justice.

In the current scenario, it is expected that our MPs will support current pensioners in this just cause. This is the time when, as a show of solidarity, they should stand up and be counted.

Current pensioners expect it and deserve it.

Carmel Mallia – honorary president, National Association of Pensioners, Lija