The only recom­mendation about a service pension proposed by the Pensions Strategy Group was about the €200 deducted on a yearly basis from the original amount of service pension, which is abated from the social security pension.

The PSG embarked on a mission to justify the unjust and discriminatory measures that were put in place against persons entitled to a service pension. All this happened in 1979 with the introduction of the two-thirds pension scheme.

Instead of recommending an increase of the sum of €200, the PSG preferred to start a campaign against those entitled to a service pension. In spite of the fact that their attempts may please their employer, the reality cannot be hidden because facts are facts.

The 1979 administration did not expropriate immovable assets from people entitled to a service pension but hard cash. Those entitled to a service pension are only demanding their money back after all these years.

It should be noted that, according to the mechanism put in place in 2008, about ignoring the €200 annually, pensioners have to reach the age of 105 years or more to receive all their dues. In the circumstances, the Alliance of Pensioners Associations is of the opinion that the PSG should have acted better and try to find solutions.

It failed to address the various interpretations and provisions laid down in the Social Security Act, which indicates clearly that pensioners entitled to a service pension from different employers are not treated equally. In the circumstances, it could have been more beneficial for pensioners if the PSG carried out a streamlining exercise to give equal treatment to all beneficiaries of a service pension instead of focusing only on the €200.

The PSG chose the road of confrontation and the remarks about the service pension rubbed more salt into open wounds.

The PSG comments refer to cash contributions on the lines of the conditions imposed for entitlement to an occupational pension.

In terms of the conditions listed in the Pension Ordinance, people are eligible for a service pension when they provide “a service” to the employer for a period of between 10 and 30 years. There is no reference to cash contributions.

The entitlement to a service pension depends on the number of years of service. In this case, the employer also pays the employee’s share instead of the common practice of sharing the contributions.

Any arguments about ‘a better deal’ are baseless and out of context

For the record, this practice emerged due to the fact that the salaries of civil servants were very low: €46.6 to €69.9 per month. In order to attract people to join the civil service, among the conditions of work, the government offered a service pension on retirement. This measure proved to be attractive and financially useful because employees had been unable to save for when they retired.

It must also be pointed out that the National Insurance Act came into being in 1956 and, to this very day, only a service pension under the Pension Ordinance or from other sources was available.

The administrations of the 1950s and early 1960s always pointed out that salaries were kept low and that no increases were given because the money saved through low salaries was being used to award a service pension to employees on retirement. This way of reasoning clearly indicates that employees contributed indirectly towards the system via cash taken from their salaries. In the circumstances, the comments made by the PSG are irrelevant.

About the remarks by the PSG that “service pensioners still get a better deal”, the alliance would like to point out that the conditions and benefits under the Social Security Act are totally different from those stipulated under the Pensions Ordinance.

In the circumstances where a person satisfies the conditions stipulated under both the Social Security Act and the Pensions Ordinance, s/he is entitled to both benefits on his/her own right and in conformity with the requirements of both laws. Any measures or attempts to disrupt this entitlement to both benefits, in this case pensions, are unjustified, discriminatory and tantamount to infringing the human rights of the person concerned.

Thus, any arguments about “a better deal” are baseless and out of context.

The infringement case raised by the European Commission against Malta about the abatement of a service pension from the two-thirds pension entitlement is a case in point. The case has been referred to the European Court of Justice for a decision.

To conclude on a positive note, the Alliance of Pensioners Associations acknowledges the work done by the PSG to strengthen the pension system in spite of the various disagreements that exist between the two parties.

Carmel Mallia is president of the Alliance of Pensioners’ Associations.

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