Pension reform: stop abuses, ensure fairness

Since the Pensions White Paper unjustly favours those who are in their late 40s, and even more those in their mid-50s, certain mature public figures do not think it twice to state selfishly that they agree that the retirement age should gradually rise to 65. Some even went one step further by claiming that any change in the retirement age does not contribute to unemployment!

In my letter "Unions and pension reform" (The Sunday Times, May 1) I had stated that the gradual raising of the retirement age may be a short-term political measure to accommodate certain important people while at the same time silencing those who normally make most sound.

Recently, one union said it was important that the change should be gradual so as not to have any social disturbances! Such disturbances are created whenever there is discrimination between generations of individuals as will happen if page 70 of the Paper is implemented.

So, according to this Paper, those who will be fully affected are those now aged 46 and below. So it may take us roughly 20 years to observe the first "victim" graduating with full 65 honours from 'workforce'! Imagine, for every radical change to be fully implemented, we will always have to wait 20 years!

Likewise, the health reform for the new hospital, which will affect thousands of health employees, should also be introduced gradually. By the same argument used for pension reform, it is not fair for a health care worker, who has been working day duties for over 35 years, to be suddenly obliged to work night shifts.

I was led to believe that pensions reform has to be addressed urgently before we face a national crisis. However, bearing in mind that it will take a good number of years for the reform to be fully implemented, to a certain extent I do not really blame MLP leader Alfred Sant for saying (Xarabank, May 6) that as this problem will hit Malta in some 20 years' time, his party should concentrate first on other urgent priorities.

I said "to a certain extent" because I do not agree with the passive policy the MLP is adopting. The perfect 'wise' man's recipe for a highly sensitive issue is: wash your hands, observe and just criticise. So, as there will probably be no counter-proposals from the Opposition, the government has a better chance of implementing the reform.

Other unions are also not against retirement at 65, as long as this does not affect their members adversely. On the other hand, others are taking it very lightly, while some were even brighter because they played it safe: no official comments at all!

If one had to look at my feedback on www.pensions.gov.mt, one would note that I never referred to any of the 'pillars' of the White Paper because, unlike economists, I give greater importance to precious time rather than money. Without time, money is worthless. This does not however mean that I will not mind losing what is already ours, such as bonuses; or that I am pleased to fork out more contributions from my salary! However, I did emphasise that the government should not put everyone in the same basket and, in my first submission, I also explained what I mean by "good equality".

Some unions are insisting that one should retire after having paid 35 or 40 years of contributions. I prefer converting these years into hours. Say between 74,500 and 75,500 hours entitles you to retire at a certain age. These are just estimates for one to understand my proposals. So, at this stage, I do not expect one to criticise why I said X thousand and not Y thousand. I gave 1,000 'free' hours for a particular category (75,500-74,500), which are equivalent to 125 days.

People who normally always abuse sick leave can take 150 days in just five years in a row, but my proposed system does not encourage such practices as otherwise one may have to retire later! Therefore, my proposal helps to increase productivity. Why should a lazy, selfish person who is always already home by noon, retire with me solely because he paid 35 or 40 years of contributions? Just because he contributed all his dues to the first or second pillars doesn't mean that he contributed as much as I did to the labour market in terms of productivity.

It is not enough to say that our reform is adequate and sustainable. Bearing in mind that pensions fall under the Ministry for the Family and Social Solidarity, they should also look at the reform from a social aspect. They should consider the sacrifice of the many who have to work every day for 40 hours or more a week, all year round. Most self-employed need not worry that they do not fit the 40-hour bracket (that would eventually lead to my estimated category range), since besides the fact that they have no vacation leave and sick leave, it is in their interest to work as many hours as possible.

Consider a TV presenter appealing for charity donations. Within minutes, scores of generous people start donating money, but how many would volunteer to take a day off and do some work for charity? You would count them on your fingertips! So, actual work is more of a sacrifice than giving money, because it eats away at your limited, precious time. Even in Genesis, after Adam and Eve sinned, work was presented as a kind of punishment or sacrifice.

Some unions are considering placing workers who have manually hard and/or stressful work in separate categories. But to date, there are no reliable methods to quantify these unpleasant pains of life. Are we going to measure the degree of spinal curvature or rely on medical certificates?

My proposal, which in writing says that "the more official hours you work, the earlier you retire", fairly categorises workers and, above all, cannot be denied because it is based on facts that depend on good methods of punctuality (punch clocks, palm readers, cameras, etc.), which after all are still slowly being introduced in several places of work.

I was inspired to submit my proposal (based on hours worked) from the fact that soldiers and policemen, who work very long hours and often do not even know when they would be returning home, retire very early, after 25 years' service. These people do not have overtime or union rights. I attribute their early retirement to the fact that they work long hours and not to stress. Not that they do not encounter stress, but stress is unfortunately unavoidable nowadays in practically all jobs.

Therefore it is really unfair to place one who, to enjoy life, depends on a meagre 24 days' vacation leave, in the same category as someone who has all the time in the world (thanks to the nature of his/her job) to go abroad on long holidays and perhaps even work part-time as a tour leader!

People who challenge my proposal, saying that there should not be any distinction between number of hours worked, are, in my opinion, saying that soldiers and policemen should also retire at 61, or 63, etc. On the other hand, however, it is debatable whether the retirement of soldiers and policemen should remain only 25 years if the rest of us have to work for two, three or four more years.

I do understand that if a civilian is already 59 or 60 (or in the case of armed forces and police, if he/she has already served for 23 or 24 years) they should be excused as otherwise they would take a very big shock. But as for the rest, if it is that urgent after all, the reform should be implemented in one go, without any gradual intervals.

On the other hand, if the government insists that: "the implementation of measures... needs to be incremental to ensure a smooth transition from the current pension system to the new one". (the PM in his foreword to the White Paper), is it so necessary for one to adopt to such unpleasant changes, one has to start thinking 20 years ahead? Could it be at least, as follows: those who in 2007 are 59 and 60 years old, till 61 (no change), 58 till 62, 57 till 63, 56 till 64, 55 and below till 65?

Besides the fact that no union has directly criticised the gradual raising of the retirement age, I also note that no union addressed the proposal that the June and December bonus payments may not continue to be paid! Some union officials told me that they only agree with what they officially stated in their reports, which means that they do not approve the rest. This is playing with words because in my opinion, if there is something that you really disapprove, one should have the guts to state it directly.

They also told me: "You know... with our proposal, you stand to gain." So, these proud people already made it a fait accompli that the government is going to accept their proposals of early retirement! This is the worst mistake a union can make when it continues to insist that only its proposals are the best. There should not be piques between unions and any politics must be put aside. It is time for some to swallow their pride, and rephrase or amend their proposals before it is too late. Pensions reform is not a competition between unions.

Finally, the authorities should also investigate the boarded out people and have their cases reconsidered, say, every two years. These authorities should act immediately even upon receiving an anonymous phone call. A person who is supposedly unfit for work should also be penalised if caught doing certain maintenance work at home, let alone if found earning an income from an unregistered job! Unemployed people who refuse to accept jobs that may be offered to them from time to time, should be removed from the register, and like boarded-out people, should respect the rules. There should be no place for lazy, or selfish people.