Updated: No decision to raise retirement age - government
No decision has been taken to raise the retirement age and there was no agreement this should be the case, the government said this evening.
In a statement replying to claims by PL economic affairs spokesman Charles Mangion, the government said Dr Mangion showed the Opposition's political incompetence and how bad its advice had been.
The government said that countries which did not take action regarding their pension systems had to increase the retirement age at one go, increase taxes and reduce social benefits.
Had the government done as the opposition wanted, Malta would have ended up in a situation similar to Greece, Spain and Portugal.
But the Maltese government continued to increase investment in the social sector and people who reached retirement age had the option of retaining their job while receiving their full wage and pension. Pensioners were also being given the full increase.
In agreement with the unions, employers and civil society the pensions system was analysed for further improvements so that pensions would be adequate.
This was a political committment for the benefit of workers and young people.
The Pensions Working Group, the government said, presented its report following a consultation process based on proposals it had received.
Dr Mangion said this morning the Labour Party disagreed with raising the retirement age once more, but agreed that second pillar pensions should be introduced, once economic conditions allowed.
He said the PL strongly disagreed with a commitment which the government appeared to have given to the EU to link the retirement age to life expectancy, which would ultimately mean a further raising of the retirement age.
The retirement age was raised to 65, five years ago, as part of reforms which were meant to serve to 2027, Dr Mangion said, and rather than raising the reitrement age, the government should now be focusing on raising the participation rate, thus ensuring that pensions were sustainable through having more social security contributions.
Dr Mangion revealed that the Labour Party is - for the first time - participating in consultations with the Pensions Reform Working Group, which is conducting the statutory review, five years after the pensions law was enacted. It was thus surprising how the government had made commitments to the EU while this review was still in progress.
He said that it was important that the basic first pillar pensions were strong, and he suggested that part of the NI contributions, instead of going straight to the general government coffers, be hived off to a dedicated pension fund.
The Labour Party, he added, agreed that a mandatory second pillar pension scheme - where workers and their employers contribute to a private pension - should be introduced, but only when economic conditions allowed, so as not to undermine industrial competitiveness or people's purchasing power.
The PL, he said, also agreed on voluntary, third pillar pensions - voluntary contributions to private pension schemes. These, he said, should be encouraged through fiscal incentives.
In January, Finance Minister Tonio Fenech said the government had no intention of introducing mandatory second pillar pensions this year but was to seek consensus over the issue.
Although the European Commission has been stressing the need for Malta to accelerate its pension reform programme in order to guarantee the long-term sustainability of Malta’s public finances, Mr Fenech said that the government is currently analysing the Pensions Task Force’s review report and will be taking the necessary measures to introduce its recommendations gradually.
According to the Task Force a mandatory private pension scheme targeted at people under 45 should be introduced immediately and the pensionable age should be tied to an index on life expectancy. The task force warned that further postponement of the second pillar pension “would only exacerbate the issue relating to the adequacy of the average pension replacement rate and, thereby, require, potentially, more drastic measures in the near future.”
The task force suggested that until the method on how the second pillar pension would work was discussed and decided upon, it suggested the introduction, as from early 2011, of a voluntary third-pillar pension which allows the possibility to switch funds to the second pillar once that became available. The report stressed that the country could not keep postponing the introduction of the second pillar pension because the present system was becoming increasingly insufficient for pensioners to enjoy the quality of life they were used to.
The report was commissioned by the Employment Ministry which sought a strategic review of the adequacy, sustainability and social solidarity of the pension system five years since the pension reform of 2005.
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Odette Longo
Jul 8th 2011, 12:46
raising the retirement to 70 is grossly unfair to a number of people. I can't imagine a stevedore or a builder working at that age... he'd be a hazard to himself and others. there's a difference between working in, for instance, a library and doing manual labour, or work that is very stressfull.... like teaching.
So we're living longer... yeah... Evidently none hereunder have spent any length of time at St. Vincent de Paule. The amount of people suffering from dementia is increasing every year.... and they're getting younger ! I used to think that if you don't use it, you lose it... WRONG. A great many of them are professionals. And the fact that we're LIVING longer means nothing if we're literally surviving thanks only to the pills we're taking... tal-pressjoni, taz-zokkor, tal-gotta, tal-qalb, tal-kollestorol etc etc.
The govt. does not need to worry for long about the aging population, coz by the time today's younger generation get older, they'll by dying younger from stress related illnesses.... so back to square one really.
65 is long enough.
If we need to save, then stop early pensions (as suggested by blogger hereunder) and also make it a choice.... either retire and get pension or, if you decide to continue working, you don't get both .
Ms Rose Cilia
Jul 8th 2011, 14:42
Agree with you 100%. and may I add stop the abuse of medically boarded out persons who are healthy, just because they produce a certificate by some consultants.
j brincat
Jul 8th 2011, 11:36
Obviously such an unpopular decision would be made after the election.
By now we anticipate the tricks which this present government has up its sleeves!
(jb)
Kevin Formosa
Jul 8th 2011, 12:36
It is the most logic thing they have in mind after election. Hopefully these will not represent the people anymore...
Mr Charles camilleri
Jul 8th 2011, 15:59
Yes after the election by a labour Government ok?
Alfred Fenech
Jul 8th 2011, 09:38
HONORARIA YES ofcourse. Pensions forget it.
Mr carmel tonna
Jul 8th 2011, 08:12
The first report addressing the pension problem was drafted under a Labour Government in 1998. Gordon Cordina was one of the consultants then. So, after 13 years of PN government we are still at it...not sure on taking any tangible decision. And the government says that 'Had the government done as the opposition wanted, Malta would have ended up in a situation similar to Greece, Spain and Portugal'. Crazy Government, snoozing Opposition.
Mr A. Mizzi
Jul 8th 2011, 08:04
After Dr. Gonzi sent out the feelers....he is, as is his habit POSTPONING HIS DECISION till after the general election!
----------
A politician thinks of the next election. A statesman, of the next generation.”
James Freeman Clarke
Alfred Fenech
Jul 8th 2011, 09:36
The people will remember in the next election.
Stephen Koludrovic
Jul 8th 2011, 07:57
We could start by knocking off the pensions of our MPS,Then the early police pensions, and all the other early pension schemes .
After which we could increase the pensionable age by a couple of months per year.
Anyone wishing to carry on working after reaching the pensionable age should be given half his pension as a bonus
I,m sure most people would rather work a few more years for a good pension, than less years for a starvation pension.
Jason Falzon
Jul 8th 2011, 07:23
mela din jonqos. mhux bizzejjed trid taghmel hajtek thallas loan fuq bicca toqba. jekk tghola naqra ohra nispiccaw thallas il loan, sena wara tispicca mix xoghol, tiehu mizerja pensjoni, u fi zmien 5 snin tmut. u huma bil 500 zieda fil gimgha.
Mr Victor vella
Jul 7th 2011, 23:16
Nispera li ma jergax issir xi hijak minn wara dahar il-haddiema kollha kif gara qabel l-ahhar ellezzjoni generali . U s-Sur V . Cassar li jidher li huwa xi ippatentjat Nazzjonalist li ghandu dritt li jkun, pero m`ghandux dritt jghid lil haddiehor biex ma jitkellimx. Din hija d-demokrazzija li ghallmu EFA li tant jiftahru bih u li issa wera li lanqas jaf xi tfisser il-kelma d-e-m-o-k-r-a-z-i-j-a. Jekk Cassar jrid jibqgha jahem sakemm jaqgha u jmut jien nigi x`naqgha u nqum minn dak li jrid huwa. Ghalija jekk irrid jibqgha jahdem sa kemm jaqgha u jibqa` hemm huwa liberu li jaghmel li jrid izda ma joqghodx jippresjonana bid-dokumenti banali kif tridna l-EU li tajbin biex titfahhom fiz-zibel.
Mr Vincent Cassar
Jul 7th 2011, 21:32
David Pisani and co, stop talking Bla bla bla...YES THE GOVERNMENT IS OBLIGED TO RAISE THE PENSION AGE. The document "Recommendation for a Council Recommendation on the National reform programme 2011 of Malta and delivering a Council opinion on the updated stability Programme of Malta 2011-2014" states as follows (p. 6):
Take action to ensure the sustainability of the pension system by accelerating the progressive increase in the retirement age and by linking it to life expectancy. Accompanying the higher statutory retirement age with a comprehensive active ageing strategy, discourage the use of early retirement schemes and encourage private pension saving.
...and this must be completed by 2014 max.
David Pisani and co I also suggest you read the accompanying document entitled "Assessment of the 2011 national reform programme and stability programme for Malta". Have a look at pg 14 in particular 4th paragraph.
M Cassar
Jul 7th 2011, 20:20
It is not true that government gave the right to all workers who have reached retirement age to continue working if they so wish. Those in the public service who are doing productive work are being forced to retire at 61 whether they like it or not. So at least dear Dr Gonzi have some respect for the truth and stop spinning the usual propaganda. This country suffers from chronic ageism.
Rocco Camilleri
Jul 7th 2011, 19:02
Kemm qed tahseb li se' jghix il-bniedem Sur. Prim Ministru, mela ghalhekk hsibtulu intom bl-Onorarja ta' 500 euro fil - gimgha zjieda biex ikollkom mahzun ghal quddiem. Mela sew hekk, intom tieqfu wara tant zmien fil-parlament u ahna mal 65 jew forsi anke 70. Mela veru tridu li l-haddiem minn fuq ix-xoghol ghall go' trab titfuh biex zgur ma' jiehu xejn lura minn dak li jkun hallas bolla. Veru trid ma' jkollokx kuxjenza bhalma qed naraw b'certu ligijiet ta' l-EU li rridu nobdu bilfors biex tikkonsidra din l-eta ta -pensjoni. Mela flok tara kif izzid ix-xoghol halli jkollna aktar nies ihallsu l-bolla, tghamel bhalma ghamilt f'numru ta' postijiet thajjarhom jitilqu qabel minn fuq ix-xoghol. Dan xi ragunar U. Veru ghandna nies fil-parlament fejn flok jibnu jhottu. Ghandhom ragun in-nies jitilfu l-Kredibilta fikhom, Spiccajtu 'Carbon Copy' ta' certu Gvernijiet barranin, se' anke tliftu l-fiducja fil-haddiem Malti, fejn kullhadd kien jghid li l-Malti jitghallem malajr u jhabbatha mal-barrani. Kunu sinciera maghna l-votanti ghax qtajtunna nifisna issa. Kull garanzija li tghajt fl-imghoddi kollha ma'zammejthomx sa' anke bil-kitba kont tajthom qabel l-elezzjoniji.
Mr Charles Cremona
Jul 7th 2011, 18:50
Whoever wins the next election will have to raise the retirement age as other countries are doing and if they don't they will be condemning the country to eventual bankruptcy.
D. Xerri
Jul 7th 2011, 18:09
Just give GonziPN another 5 year term next election and you will surely see if the intention is to raise the retirement age ! Take a Chance :~) - AS IF we havent seen this happen time and time again for entire years - Promises and Guarantees are GonziPN`s best shot before every election but the shot backfires once winning the election !
Mr Peter Korsten
Jul 7th 2011, 21:59
Look at the bright side: instead of a pension, we'll get some lovely mega-projects. Don't forget the Gozo tunnel.
Carmel Xuereb
Jul 7th 2011, 18:01
Ghal ftit il-Gvern ta' Gonzi jmissu jghaddi ligi li meta xi ndividwu jaghlaq is-70 sena jidhnu haj ghas jekk ser jghaddi din il-ligi kif iridha hu ibqa zgur li l-Gvern ser imur minn fuq sewwa. U haga ohra, jekk nibdew inhalsu ghal penzjoni alternattiva (privata) u din wara 15/20 sena tfalli x'se jigri minna li nkunu hallasna dawk il-flus kollha u l-penzjoni alternattiva minn fejn ser ingibuha? Ahseb ftit Dr. Gonzi qabel ma tfattarha.
Mark Galea
Jul 7th 2011, 16:50
I really think the present retirement scheme should be gradually phased out as new and young workers join the work force. For people who have already contributed for the last twenty five years or more, it is utterly unfair that their pensions are touched, or that their retirement age should be increased. One has to enjoy the benefits of one's contributions at some point. I, and certainly many who will be looking at retirement within the next two decades, will not be voting for any party that touches the present system, and deprives us of what is rightfully ours.
MALCOLM SEYCHELL
Jul 7th 2011, 15:54
lets face it, we are living more so we should work more. However I think that since we pay NI the government should provide us always with a realistic pension. Anyone who wants to invest extra with the private sector it is up to him, but recent history showed us that it is the tax payer who will pay again for these private companies which go bankrupt.
I think its time that the government should stop using our taxes inefficiently like spending millions on illegal immigration, single mothers, criminals, people saying they are unemployed and they work, inefficiency in public sector, giving raise to ministers who do not perform well etc.
When our taxes will be spend on useful projects rather then social services then I will agree to work more.
Mr Michael N Cassar
Jul 7th 2011, 14:49
I wonder,……. why not prepare a firing squad ;at least you will not suffer anymore from politicians with such stupid ideas. They say life is up to 70 and if your healthy 80 so according to this politician we return to lawful slavery you work till you drop death.
David Pisani
Jul 7th 2011, 14:45
Sorry about Labour. On this I will not vote labour in next election. The proposal for a second Pillar (Private pensions) is a betrayal to all those who are leftist. And I am one of those. Social democracy is a betrayal for the left.
The labour party should support a sustainable public pension system support a private one. Hope labour change his plan on this.
David
Ms G Schembri
Jul 7th 2011, 15:46
Yes David don't vote Labour come next election, we are all very pleased with the present government, we don't need a change in government. Since the present administration is planning on raising the retirement age we don't have to pay a second pillar, since we will be all death by retirement age.
Mr Joseph Cauchi Senior
Jul 7th 2011, 14:42
If our pension schemes were to be based on Pension Funds, what would happen if these Pension Funds were to go bankrupt?
The USA has gone through this experience with the ENRON collapse; do we remember how many contributors were left high-and-dry and all their pensions schemes gone up in thin air and were left with NOTHING, not even a stinking cent?
We should keep everything in perspective and chose the most reliable and safest system; because once bitten twice shy!
JC.
MaryJo Camenzuli
Jul 7th 2011, 14:33
Why is Labour insisting on 65?
Why not 61 as it was before?
I was under the impression that Labour
disagreed with the 65 year retirement age.
All of a sudden, Labour agrees with 65.
.
Ms G Schembri
Jul 7th 2011, 15:50
Since it is now 65, there is no chance of the retirement age going down. The problem now is will it be raised to 70? The government wants to raise retirement age, can you imagine the opposition wanting to lower it.
Nazzareno Cortis
Jul 7th 2011, 16:51
MaryJo,-----did you forget that Malta joined E U and E U issue rules to be obeyed by us!!!!! Raising retiring age was one of the many rules Malta had to swallow from Brussels-----wether we like it or not!!!!!
Nick Azzopardi
Jul 7th 2011, 18:40
@ Nazzareno, you do realise we fools know you are inventing that don't you? It is not true that Malta was forced into accepting that the retirement age is upped to 65 because the EU decided so.
Please enlighten us with more rules Malta had to bitterly swallow.
MaryJo Camenzuli
Jul 7th 2011, 19:53
Messrs Schembri and Cortis,
It was 61 and when it went up to 65,
Labour opposed it.
Now Labour says it disagrees with 66+.
Nice way of telling us that it agrees with 65.
At this rate, if it does go up again, say to 67,
Labour will say it disagrees with 68,
but wIll accept 67.
.
Mr Tony Camilleri
Jul 8th 2011, 10:37
Nick Azzopardi YES Nick. Those are eu orders and our obsequious lackey GONEZI and if the agree also the Opposition are simply obeying their masters in brussels.
Mr Charles camilleri
Jul 8th 2011, 16:08
Are you still not conversant of how the labour party's strategy works. They are ready to join the devil so long as this gets them that long desired wish or ruining Malta again.
jason gatt
Jul 7th 2011, 14:14
are we going to the middile ages again ?? If this is what it will happen Dr Gonzo??
Lawrence Gauci
Jul 7th 2011, 13:59
This is unbelevable, this stupid government is utterly killing the middle and lower class. Rich people and ministers who had a 500 euro increase may retire whenever they want as they can afford doing so.
Alex Falzon
Jul 7th 2011, 13:55
It should remain until 65yrs of age but the NI contribution should be abolished and instead every individual will pay his own private pension.
Mr Charles Bayliss
Jul 7th 2011, 14:21
If NI would be abolished, what will happen to the NI we have already paid. I have been contributing towards my state pension for 35 years. Would I have paid money down the drain? One cannot abolish NI without saying what is to happen to the people's money. I agree with private pensions, and have one also. But should we suffer a loss with a possible abolishion of the NI?
Ms G Schembri
Jul 7th 2011, 15:53
Part of NI contributributions go towards sick leave and unemployment benefits, what will happen if NI is abolished. Would we have to take an insurance against sick leave, unemployment and hospitalisation?
Mr R ferriggi
Jul 7th 2011, 13:44
lets be honest about this subject of pensions in 10/20 years time.
forget pensions as we know them.
it is a fact that EVEN now,,, pensions only will not suffice.
HOW ON EARTH can we expect improvement??
my suggestion is that individuals have more free rein on how to invest their money.
the ''excuse'' against this is that some individuals will not be cautious enough.
so will we let the honest hard-working people suffer because of these individuals??
Mr P Pace Balzan
Jul 7th 2011, 13:39
As per the task force " a mandatory private pension scheme targeted at people under 45 should be introduced immediately"
.
What sort of guarantee does a mandatory private pension scheme offer?
What sort of guarantee does a second pillar pension offer?
.
The original concept of the National Insurance was to ensure adequate Social Security because private schemes are fallible.
jack bristow
Jul 7th 2011, 13:35
This government is loosing the brains of common sense and its human side of it!
Hellooooooooooooooooooooooooooooowwwwwwwwwwwwwwwwwwww there!!
Mr Lawrence Fenech
Jul 7th 2011, 13:29
It makes me sick to think of a pension on a double salary which i believe is after 2 years in parliament.
Joe Marsh
Jul 7th 2011, 13:26
Yeah, good way to solve our pension problem!! That way we will be under gravel before we reach our retiring age and start to benefit from the long time savings. Well done Gonzi PN!!
Mr Iehor Email
Jul 7th 2011, 13:17
will stop working by the age of 60, irrispective if I lose the NI I've been paying for and irrispective of the retirement age. isloh gonz
Mr A Spiteri
Jul 7th 2011, 13:11
What about admitting that the state-run pension scheme has failed miserably and start offering people the chance to opt out from such farce. People should be free to decide their own future, and they should be fully responsible for their pension too.
I for one don’t trust the government with my future; I would prefer that my pension is run by private companies that are fully accountable, regulated and experts in the field. However, with already an expensive NI monthly contribution, I can’t afford a private pension. And I guess many are in the same position as me!
That is why the opportunity for people to opt out from the state-run pension scheme should at least be considered and debated!
Ms G Schembri
Jul 7th 2011, 16:03
What happens when you're on sick leave, would your employer have to pay, instead of the National Insurance? What happens if you lose your job are you prepared to take another insurance against unemployment. What happens if your trusted private company goes bust, you should talk to people who were promised a large sum on retirement by an assurance company only to find that they will get just a little more than they paid. I complain about the amount of money I pay as NI, but since I started paying a health Insurance since I don't trust our Public Health system, I realise that you pay much more than you expect to get, I'd rather continue paying NI, and if/when I can afford it I will take a private insurance.
M Cassar
Jul 7th 2011, 13:06
Sensible approach by the PL. Rather than link the retirement age to age expectancy, government should give the opportunity to its own workers to continue working beyond retirement age..... if they so desire. But our Prime Ministrer still believes in the economic fallacy of 'lump of labour' theory that was discarded by most economists decades ago. This fallacy is built round the assumption that letting older people work for longer will deprive younger people from finding a job. Besides being discriminatory against older workers, this is also an economic fallacy. The governemnt should set an example to the private sector by changing its mouldy policies.
Mr FRANS H SAID
Jul 7th 2011, 13:02
I still hope some consideration will be gioven to those of the 4th age - over 75.
Younger persons can work the occassional hours to earn the extra penny, but once past 75, you are past it!
Do not ignore us. Alternative would be to enter an old people's home, which will be more costly to the nation.
Ms G. Farrugia
Jul 7th 2011, 12:55
eeemmmm....like seriously???? We'll end up not having enough time to be around our grandchildren if we'll have to work till let say the age of 68 or 70 which is also almost the end of our lives.Unbelievable!!
J. Scicluna
Jul 7th 2011, 12:53
Quote
...and the pensionable age should be tied to an index on life expectancy
Unquote
Yeah...sure.
Looks like we're heading for the formula of; LIFE EXPECTANCY + 5YEARS...in that way the Govt will reap the NI contributions and pays out no pensions :-P