Unions caution Government on pension reforms

Trade Unions are pressuring the government to refrain from introducing any pension reforms by the coming budget.

The Union Haddiema Maghqudin said a sound pensions system could not be agreed before another six months while the General Workers' Union said that January 2005 was a more plausible date for any changes to the system.

The government is pushing the pension reform process and has given the impression that it could come up with a plan in time for the next budget, due in about a month's time.

Social Policy Minister Lawrence Gonzi had said that Malta would have a blueprint on pension reform by the first week of November.

A report drawn up by the chairman of the Welfare Reform Commission, Joseph Schembri, was presented to Government on October 11 and the commission is now expected to discuss the matter on Saturday.

The report proposed, among other things, that the retirement age should be gradually increased to 65 by 2020, and that the national insurance contribution system be revamped.

GWU general secretary Tony Zarb said the union's council was due to meet tomorrow to prepare for the November 1 meeting.

He said there were very serious issues at stake and insisted that it was only through a serious process of consultation that a solution can be found.

Pointing out that the social partners were still in the dark about the government's proposals, he warned government that "going it alone would cause hardships".

"Unless there is agreement with the social partners, we are not going to go through happy times," he commented.

UHM general secretary Gejtu Vella said that the Malta Council for Economic and Social Development only met for the first time on Monday, and it was clear that government has not given this organisation the necessary information during the past months.

"If we really are to come up with an agreement for the pensions problem, then the MCESD has to start meeting up once a week with both government and its representatives," he said, adding that he was optimistic that an agreement could be reached within six months if that happened.

"However, we are getting the impression that government is only paying lip service," he said, warning that the government risked unrest if it excluded the social partners from any decision-making.

As Italy went on a general strike on Friday over government plans to shake up the pensions system, the European Commission has been stepping up warnings over a demographic time-bomb ticking in Europe.

In a report last year, the EU warned that the proportion of working-age people to over-65s in the EU would halve by 2050.

In Malta there are currently five persons of working age for every pensioner, a figure that will dwindle to three workers to every pensioner by 2025.