According to Section 2 of the Social Security Act, “a Service Pension, with effect from 1st day of April, 1978, means a pension or other allowance awarded to a person in respect of past services in Malta or abroad and shall in each and every case be considered on an uncommuted basis...”

It can be noted that there are no references to contributory or non-contributory service pension.

Since the European Parliament’s decision in the case of Joseph Caruana about the deduction of a service pension from the two-thirds pension entitlement in terms of the Social Security Act, there is a steady and continuous reference to “contributory service pension”.

In the light of the ongoing arguments about a “service pension” and the decision mentioned above, one has to be objective and tackle properly the technicality of this important but complicated subject.

Strictly speaking, there is no official interpretation of service pension besides that provided in section two of the law. However, one has to be adventurous and try to distinguish between two categories of “service pension” and call them a contributory service pension and a non-contributory service pension respectively.

A contributory service pension is now called an occupational pension or second-pillar pension. In this case a contribution is paid into a scheme by the employer and the employee so that on retirement the employee becomes entitled to a service pension/occupational pension if he satisfies the stipulated conditions. A non-contributory service pension has all the features of the contributory service pension with a particular difference.

In this scheme the employee does not pay any contribution while the employer himself pays all in order to provide a service pension to the employee on his retirement.

This so-called non-contributory service pension is earned by an employee through a contract of work entered between the employer and himself. So it forms part of his conditions of employment.

The above explanation produces the necessary evidence that the income earned from a service pension of both categories forms an integral part of a person’s social security entitlement and represents an income security for a pensioner to continue living a dignified life as stipulated in the Charter of European Fundamental Human Rights.

To prove that this interpretation is correct one has to refer to sub-section (4) of Section (2) of the Social Security Act and confirms that due to the pension reform, income from an Occupational Pension is no longer considered to be abated from the two-thirds pension entitlement.

In the circumstances all forms of service pension should be treated equally and pensioners should no longer be divided on this important issue.

The injustices and discriminatory measures put in place in 1979 should be addressed properly without further delay to the benefit of all concerned.