Malta is still in time to reform its pensions system but the situation is not alarming, Finance Minister Edward Scicluna said this morning.

Addressing a business breakfast on the subject organised by The Business Observer at Intercontinental Malta, Prof. Scicluna said the sustainability of pensions was strongly linked to economic growth and the national debt.

He said this was why the government was concentrating its efforts on increasing economic growth and addressing the national debt which currently stood at 73 per cent.

"The national debt is a contingent liability," he said.

"It would make a big difference if we managed to reduce national debt by 20 per cent over a 20-year period, for example. Rather than wait for years for a big reform, we can tweak the present system every two or three years. We do not have to become alarmist just because the European Commission said it. We are monitoring the situation and are aware of it and ready to take all the action that is required," he said.

Prof. Scicluna said the two ingredients for the sustainability of pensions were economic growth and good public management, while "the rest is detail".

Malta Employers Association director general Joe Farrugia, who was also on the panel, said the introduction of a second pillar pension to which employers would also contribute, would be "counterproductive".

"Introducing it now would mean a substantial cost that employers would have to incur and forces employees to save when they do not necessarily afford it. This is why we are not in favour of introducing the second pillar pensions right now," he said.