(Adds PL's, government replies)

The Nationalist Party has called for a study on the introduction of a second pillar pensions scheme in a bid to address adequacy of pensions.

It also wants the government to speed up the introduction of the national minimum guaranteed pension, which is being increased from €590 to €620 a month.

In its reaction to the recommendations of the Pensions Strategy Group, PN deputy leader Mario de Marco this morning questioned how the government based its recommendations on calculations that Malta’s population would increase to 470,000 by 2060.

However, there was contrasting calculations that the population would decrease to 370,000 by then, which raised questions on the sustainability of pensions.

Addressing a press conference in Parliament, Dr de Marco said Malta needed a system that made pensions sustainable because the population was ageing and the working population was on the decrease.

He said that although the government introduced schemes and incentives on third pillar pensions, the take-up was not as expected.

Regarding the controversial introduction of the second pillar pensions, the Nationalist Party did not agree with the working group’s recommendation to completely exclude its introduction.

“We are not saying let’s introduce it and make it mandatory. Neither are we saying let’s exclude its introduction completely. What were are saying is that the time is right to start studying the introduction or the lack of,” Dr de Marco said.

Shadow minister Paula Mifsud Bonnici said the introduction of the national minimum pension for those who were 76 years old from 2016 was discriminatory and would leave many people at risk of poverty. She said that according to a recent Parliamentary question, there were 22,200 who had a pension of less than €500 a month. Just addressing those who were 76-years-old was discriminatory and would not address this situation, she said.

She also questioned whether a monthly €620 minimum pension would be enough to allow pensioners to have a decent standard of living.

GOVERNMENT'S REPLY

In another statement, the government said that in spite of the positive reaction of the public and constituted bodies to the proposals, the Opposition was once again being negative and forecasting that the system could fall apart.

This was when the previsions that were made were not only based on European Commission criteria but were also agreed with World Bank experts. This was the same way all technical exercises were drawn up since Malta became an EU member.

These experts’ assessment was that the prospects for Malta improved, because of a strong improvement in the employment sector and economic expansion.

The government said it was not true that the number of elderly living in poverty was 34 per cent. According to NSO statistics confirmed by Eurostat, the percentage of elderly at risk of poverty was 14.9 per cent, which was the European average.

It said that although the Opposition insisted that with €620 a month the elderly would still remain at risk of poverty, according to Eurostat one would be above the risk of poverty line if one earned more than €605 a month.

PL'S REPLY

In a reply, the Labour Party said that while the previous government used to take from the elderly, this administration was giving them new rights.

Without the change in administration, all those who were now 53 would have retired without a guarantee that their pension would put not put them at risk of poverty. There was now a plan for everyone to be protected.

On the other hand, the Labour Party promised, and was now implementing, the gradual introduction of a better minimum pension for all pensioners.

Contrary to what the previous government did in 2007, this better minimum pension would not be given as compensation for an increase in the retirement age or in the number of contributions.

This right was being given to all, including those who retired years ago.

The Labour Party also referred to the second pillar pension saying all constituted bodies were against this proposal, which the Opposition was still insisting was necessary.

While the Labour government introduced measures to reduce income tax, the Nationalist Party wanted everyone, including those on the minimum wage, to be taxed more.

The party appealed for responsibility in favour of this new social process so that the elderly would be given the dignity they deserved.