The British government recently issued strict instructions to all private employers (whatever the size of their workforce) to organise a workplace pension for all their employees. This is a mandatory second pillar pension for the private sector and is separate from the small State Pension given by the UK Social Security Department.

The intention of this mandatory legislation for the private sector is obvious – to improve protection of future pensioners from poverty in old age.

The British public service has always had its own workplace (occupational/service) pension, besides the State Pension. Malta had a copy of this public service occupational (second pillar – ‘ta’ tesor’) pension from colonial times. However, in 1979, Maltese legislation not only terminated our public sector service pension, but also permitted deductions from the new, mandatory contributory so-called two-thirds pension for those workers with an occupational pension.

Some big private companies in Malta, such as, Barclays, Farsons, Cable & Wireless and Rediffusion, had their own workplace (service/second pillar) pension. Their employees who did not cash in their service pension in 1979, hoping to enjoy two pensions, later discovered on retirement age that their Social Security pension (for which they had paid) was being deducted according to the size of their employers’ service pension.

The recent pensions White Paper has reconfirmed that the Malta government (unlike the British one) has no intention of instituting mandatory workplace (second pillar) pensions.

This comes as no surprise because no new, mandatory second pillar pension can be introduced without compensating thousands of pensioners who had their Social Security pension “defrauded” over several years, simply because they had a previous workplace occupational pension.

This is the difference between mature, organised democratic countries and others with suspect work and pension conditions, even in 21st century Europe.