In its editorial on State pension (January 13), Times of Malta mentioned, among other things, the exclusion of the elderly from participating from the wealth generated in our country. This topic has been discussed on different occasions with both administrations but, sadly enough, we were always let down and no progress was attained.
Our reports, suggestions and proposals were always thrown under the carpet.
It should be pointed out straight away that the duty of our parliamentarians is to ensure that our first pillar State pension remain sustainable and adequate enough to ascertain that pensioners will continue to live in dignity after their retirement.
It is a fact that while the government pontificates that the country is doing well, statistics show another realty that should be addressed. The percentage of persons over 65 years who are at risk of poverty is on the increase. As regards risk of poverty, Malta has a high rate of elderly people when compared to other EU states.
At this stage, pensioners wish to point out that they have been let down by both political parties on issues dealing with pensions. It is true that sharp social contradictions are getting lost in the crossfire of party politics.
In our opinion, proper measures were put in place to make the State pension sustainable. However, no progress was attained as regards adequacy.
Our proposals on the adequacy of pensions were put aside. These include proposals to tackle the problem of poverty and risk of poverty among elderly people.
To add insult to injury, in this year’s Budget, measures were introduced to tackle the risk of poverty among children, unmarried mothers, persons with disability, and so on. The reason for excluding elderly people is still unknown and warrants an explanation.
The wealth generated in our country is limited to particular segments.
In this bleak scenario, as representatives of pensioners, it is appropriate to mention some of our proposals.
Our priority is to address the problems of those vulnerable elderly people whose income from pension is very low and can be considered as poor or at risk of poverty.
While thousands enjoy holidays abroad, use luxury cars, go to restaurants, and so on, other thousands are materially deprived and excluded from society.
If the current administration really cares about the income security of elderly people, it should introduce the guaranteed national minimum pension with immediate effect.
This will replace the national minimum pension, which is no longer considered as our safety net.
The rate of the GNMP is equivalent to 60 per cent of the median income. This type of pension is already being paid to widows and persons with a disability who were born on or after January 1, 1962.
Again, why are elderly people excluded from receiving this pension? According to law, pensioners will be entitled to this pension in 2027.
The European Commission and the Social Protection Committee stated that the pension replacement rate dropped 10 years after retirement.
Naturally, this causes a drop in the standard of living of pensioners as the indexation of pension in payment most often lags behind the evolution of wages/salaries.
Therefore, some form of mechanism on indexation should be put in place, based on the needs of older people to mitigate the regular erosion of their purchasing power.
Another problem that needs discussion is the maximum pensionable income. On the recommendations of the Pensions Working Group, an amendment was introduced in the law providing for two separate MPIs, creating two classes of pensioners.
Persons born up to December 31, 1961 are entitled to two thirds of €17,400.
Those born on or after January 1, 1962 are entitled to two thirds of €21,000.
Those who always paid social security contributions at the highest rate should enjoy the same rights on retirement.
Therefore, there should be one MPI for all pensioners.
While thousands of pensioners are living in misery or strive hard to make ends meet, proposals for new salary scales for parliamentarians were published. The expenditure for this measure is about €5 million.
The wealth generated in our country is limited to particular segments
The report failed to indicate how much will it cost to revise and adjust the service pension of retired members of Parliament.
For example, it should be pointed out if the salary of the Prime Minister goes up to €95,000, the service pension of a retired prime minister will be two thirds of €95,000 equal to over €63,000 per annum.
The service pension of members of Parliament is uncapped.
As representatives of pensioners entitled to a service pension from the Treasury Department and other sources, it is appropriate to mention that, for the last 36 years, the above honourable members failed to find solutions and eliminate once and for all the discrimination and injustices that exists in cases where a person is entitled to a service pension.
This category of pensioners, unlike MPs, have their service pension capped for life and it is also abated from their social security two thirds pension.
What about some equal treatment?
In the name of social justice and solidarity, the Alliance of Pensioners Associations appeals to the Prime Minister and to all members of Parliament to focus and decide on the issues indicated.
In our humble opinion, the State pension should be the flagship of our pension systems. It is important that our State pension will remain sustainable and adequate.
The risk of poverty problem faced by our members should be addressed without further delay. The dignity of elderly/pensioners should be safeguarded.
Income security during the period of retirement is sacred and must be protected for the benefit of all concerned.
Carmel Mallia is president of the Alliance of Pensioners Association.