Please permit me to add some comments to those of Joseph Buttigieg (The Sunday Times, August 21) on occupation/service pensions and related deductions from Maltese NI two-thirds pension entitlement. This problem affects not only ex-British servicemen, but anybody who has an occupational/service pension from a foreign government or private company, and who also has contributed to Maltese NI. It in fact also affects half of current Maltese pensioners.
The Social Security Act of 1979 essentially outlawed occupational/service pensions and, those who have these (because they worked for them) are punished by Maltese law permitting our Social Security department to deduct corresponding amounts from their Maltese NI two-thirds pension. Another potential discriminatory factor of this law is that holders of occupational/service or private pensions from sources unknown (and undeclared) to our Social Security, would not be punished by this two-thirds pension reduction.
Constituted bodies have recently been publishing their recommendations for pension reform. One of these organisations seemed to claim that our current first pillar pension system is unsustainable. This is nonsense. These ‘experts’ are unaware that our official statistics reveal that these last seven years alone, around €350 million of NI contributions has been siphoned off to other parts of the welfare state, when it should have gone solely towards pensions and work-related benefits. The Pensions Working Group has repeatedly pointed out this unfortunate lack of a ring-fenced pension fund to improve the first pillar, which is the basic safety-net against poverty in old age.
The main interest coming across from other constituted bodies is obviously private (third pillar) pensions, because these will earn them substantial commission income. However, my understanding is that our social security law would need amending, otherwise holders of declared private pensions would suffer the same NI two-thirds pension deductions as do current holders of occupational/service pensions from foreign governments or companies.
Amending the law to permit private pensions, without due compensation to around half of current pensioners suffering NI two-thirds pension deductions (because of their service/company pension), would create further unaccept-able discrimination. The same applies to recommendations for setting up of a second pillar/occupational/service/company pension system – it would further discriminate against current holders of such pensions who still await compensation for their NI two-thirds pension deductions.
Mr Buttigieg stated that the Labour administration of 1996-98 had started to introduce an adequate compensation for holders of service pensions suffering NI two-thirds pension deductions, which was scrapped by the subsequent/current administration. It would therefore be interesting to know whether current Labour Party policy still includes a promise of adequate compensation of all holders of occupational/service/company pensions who have suffered NI two-thirds pension deductions.
As Mr Buttigieg reminds us, the EU Commission declared these deductions to the NI two-thirds pensions illegal – they are nothing short of an institutionalised fraud, ‘legalised’ in 1979, and a long-standing injustice of which independent Malta should be ashamed of. Our alliance, representing pensioners of seven of Malta’s largest unions, is not against maintaining ’s welfare state.
However, if the rest of our citizenry wishes to keep offering free tertiary education to other EU nationals, student stipends (these alone around €24 million annually) and free healthcare to both rich and poor (because they believe they can afford it), go ahead – we don’t wish to stop you – but please have the decency to stop defrauding half Malta’s pensioners to carry on with your public spending orgy – this is definitely not social solidarity.
We still await due compensation for what the EU Commission has declared illegal.