National Youth Council split on pensions issue

The National Youth Council (KNZ) has refrained from taking an official stand on the pensions reform White Paper after member organisations failed to agree on a draft document spelling out a set of proposals.

Divergences of opinion emerged on Saturday during a general assembly held between Friday and yesterday.

Youth organisations present for the discussion said the differences were over nitty-gritty issues in the document.

"Some objected to the need of reforming pensions in the first place," one representative said. He feared youth organisations had been overcome by the interests of their mother organisations which failed to take into consideration young people's needs in this case.

Drafted by Alex Azzopardi, Daniela Debono and Reuben Borg, the draft document, called Pensions, Adequate and Sustainable: KNZ's Reactions And Proposals, is based on a report that the council published last May after months of consultation with member organisations.

It says young people will be the group most affected by the reform.

It suggests that the government should issue its proposals on the reforms in health, housing and education before concluding discussions on pensions, arguing that "it is very difficult to assess any kind of social impact if the health, education and housing reforms are yet to be discussed".

The document holds that a larger percentage of mandatory contributions should go to the second pillar scheme than is being proposed in the White Paper "by reducing the first pillar contribution and increasing, by an equal amount, the mandatory second pillar".

The document argues that raising the pension age to 65 would lead to unemployment among young people.

It describes as "too drastic" the proposed increase in the contributory period to 40 years. It says the minimum number of years of contribution should be equal to the retirement age less the age required to complete one undergraduate degree and further reduced by five years.

"Thus, if the retirement age is retained at 61 years, the minimum required years of contribution should be 61 less 23 years less a further five years, which equals 33 years contribution."

It is also suggests that pension entitlement should be based on the best years in a given period and not over the whole 40 years.

Asked why the council had not adopted an official position, KNZ president Cory Greenland, who was appointed president instead of Jean Paul de Lucca during the assembly, said youth organisations in the KNZ carried the perspective of the larger organisations they belong to. "Full consensus here would have meant that all organisations also agreed on a national level rather than at youth level," he said.

In his closing address at the assembly, he said the executive was made up of people with varied political affiliations who would set an example by promoting unity in diversity.

Member organisations now have three weeks to present their reactions to the Malta Council for Economic and Social Development individually.