Regarding pensions for those who contributed to this country with their work and national insurance contributions, the present Labour government and the Nationalist opposition continue their “ping-pong arguments” about who performed pension reform better than the other.
They have both been arguing about who has tackled and solved the pre-1962- born lower pension anomaly but both parties refuse to discuss the institutionalised defrauding of the contributory first pillar / two-thirds pension of those who also have a service (also referred to as a work-related / occupational / second pillar) pension.
Our civil service (occupational) pension was instituted in colonial times (1937) as a second pension and part of the work contract offered to ‘established’ public servants. This two-pension arrangement was a copy of UK civil service pensions; this two-pension system for public servants still exists in UK.
But, in Malta, in 1979, when we had recently thrown away the shackles of colonisation, the Labour administration declared that having two pensions was “against the common good” and legislated that those pensioners with a civil service (tat-Teżor) pension would have their newly established first pillar two thirds pension reduced in proportion to the amount of their second pillar civil service pension.
To be fair to the 1979 government, a minimum pension was also established for those who had never paid NI contributions and who faced poverty. But this amounted to ‘robbing Peter to pay Paul’ and, in effect broke the public service work and pension contract.
This 1979 outlawing of two pensions also affected those who worked both with the UK military or civil service and also worked in Malta and contributed to their Malta two thirds pension.
It also affected those who had worked in Maltese or foreign private industry contributing to both their private company pension and to the social security NI. The latter group of workers was expecting two pensions, the company’s and the social security two thirds pension; instead, one pension practically cancelled the other, these workers ending up with only one pension having paid for two.
It must be the height of warped thinking to regard this 1979 legislation as “contributing to the common good” and not to an institutional pension fraud by the government.
A worker’s contributory pension is regarded as a property right and there are three contributors to the worker’s pension, namely, the worker, the employer and the State (one third each). The 1979 legislation breaks the contract between the worker and the State and defrauds the worker’s property right.
Believe it or not, learned judges of our Constitutional Court have supported this 1979 legislation, seemingly claiming the government’s definition of the “common good” has priority to the personal property right of owing two pensions.
In 1979, the Labour administration declared that having two pensions was ‘against the common good’- Albert Cilia Vincenti
You may ask, so how come owning more than one immovable property is not classifiable as unlawful and against the common good? The answer is this was all part of Malta’s bumpy post-colonial administrations, at times resembling more those of communist North Korea than of Europe.
A change of government in 1987 promised the wrongs of the 1970s would be righted but, in fact, the new Nationalist Fenech Adami administration refused to undo the 1979 legislation castigating individuals with two pensions. If that wasn’t enough let-down by the much awaited “saviour” administration, it went on to legislate that future holders of two pensions would be exempt from the 1979 law prohibiting enjoyment of both a first and second pillar pension paid for as per work contract.
At the time, David Spiteri-Gingell, head of the Pension Reform Group, had found it strange that politicians were legalising a new second pillar for future pensioners when existing second pillars were still unlawful.
Perhaps what politicians had in mind were their friends working in EU institutions who might have also worked in Malta and would, therefore, be able to enjoy two pensions without deductions. The General Workers’ Union cottoned on to this and has now organised a second pillar pension with APS Bank.
After being lobbied by service pensioners in 2008, the PN government made a small financial concession to this unfortunate group of pensioners and, before the 2013 election, Lawrence Gonzi promised these defrauded pensioners would be adequately compensated. Nothing, therefore, happened because the elected Labour administrations have never indicated any remedial action for the negative discriminatory consequences of Dom Mintoff’s 1979 anti-second pillar law.
The pre-election promises of PN leader Simon Busuttil in 2017 watered down the PN’s 2013 service pensioners’ compensation workings and PN leaders Adrian Delia and Bernard Grech conveniently forgot all about this inexcusable discrimination between current and future first plus second pillar pensioners.
Hearing PN spokespersons would now lead you to believe all Malta’s ills are likely to be solved in the first week of their administration. No wonder politicians’ credibility among the thinking public (apart from party faithful, expecting favours) seems so low.
Albert Cilia-Vincenti is president of the National Association of Service Pensioners and a former UK and Malta senior civil servant.