The National Association of Pensioners, being the main safeguarding body for pensioners, recalls with all responsibility that the means of subsistence of its members and their relatives depends almost entirely on the state contributory pension income, namely the two-thirds pension.
In the circumstances, we strongly believe and rightly demand that the state pension should remain the flagship of current pensioners and those who will retire in the future.
In the past years, the two-thirds pension has been driven into an alley through the so-called ‘reform’. It seems to be at a crossroads and thousands do not know where it is heading.
There is an urgent need to take the right path leading to a solution, without further dawdling and in the shortest time possible. Things are not looking good for current pensioners and for those who will retire by December 31, 2026.
Since the first pension reform in 2007, our association has always spoken up about the reforms’ shortcomings. Regretfully, MPs on both sides of the House have paid little heed to what we have argued over the last 14 years.
In light of all this, the association cannot remain silent about what has happened and is expected to continue happening in the near future.
Pension reform has focused mainly on pension sustainability and has completely sidelined the human element.
In terms of pension adequacy and solidarity with pensioners, the reform has turned out to be almost a total failure.
The worst decision of the reform was the division of pensioners into two age categories. In category A are those born on and after January 1, 1962, and in category B are those born on or before December 31, 1961.
Current pensioners and those set to retire by December 31, 2026, have been seriously badly affected.
The worst decision of the pension reform was the division of pensioners into two age categories- Louis Cilia
The decision that the reform should consider all workings according to the age of the person concerned goes against human rights and can be seen as discrimination between different persons.
There are four areas of discrimination: the national guaranteed minimum pension; the creation of a new higher maximum income with a capping of around €25,000; the change in the pension estimate; and the change in the survivors’ pension in January of each year.
These measures will result in a considerable difference in the pension rate between pensioners falling under the two categories, A and B.
In an editorial in the Times of Malta on January 29, 2019 (‘Time to act on pensions’), the then prime minister was quoted as declaring that “pensioners deserve better and the government will be delivering”.
We regret to note that this has not been the case. The risk of poverty among pensioners has increased and not decreased.
The number of pensioners at risk of poverty has risen to 25,000.
There is also the long-standing issue of the service pension. This has been an issue since 1979 and has remained unresolved to the detriment of thousands of pensioners who are former government employees (or their heirs).
Under the pretext of a two-thirds pension, these pensioners were abruptly deprived of their right to benefit from what they were entitled to as of 1979, as ‘established civil servants’ under the laws of the time.
As a result, the pensions of thousands of these former employees have been frozen to two-thirds of the best wage they earned in the last three years of employment.
These pensioners (or their heirs) have lost large amounts of money without any proper compensation.
Together with other organisations, the National Association of Pensioners is working hard to bring this case of discrimination to justice before the Constitutional Court, since no government has so far paid heed to our calls.