The European Commission's white paper "An Agenda for Adequate, Sate and Sustainable Pensions" was a means of supporting the continuing reform of the pension system, the government said.
In the white paper, the European Commission stressed that Malta should move fast in raising the retirement age and encouraging private pensions schemes.
It recommended that the island should stop promoting “early retirement schemes” as these worked against the prevalent target to increase the employment rate among older workers in Europe.
The government said in a statement this evening that reforming the pension system had been a priority for the government for over a decade. The rationale always was to introduce a comprehensive reform programme with the main objective of safeguarding the future sustainability and adequacy of Malta's pensions system.
In 2004 the government issued a White Paper which recognised that Malta had to take appropriate action to secure a far stronger basis for an adequate and sustained pension system for future pensioners given the projected changes in demographics including a potentially shrinking population due to a decreased fertility rate and an aging population.
Consequently, following an extensive consultation process, the government embarked, with strategic intent, on an incremental process of reform.
The first phase of reform in 2007 was directed, among others, towards parametric changes to secure a more sustainable and adequate basis of the two thirds retirement pension.
Another important measure addressed by the 2007 pension reform process was the entrenchment in the Social Security Act an automatic trigger for the carrying out of a Strategic Review of the pensions system every five years.
The first such review was carried out by a Pensions Working Group in 2010, and the report on the findings of the group that included 45 recommendations were tabled in the House of Representatives in December 2010.
Last year, the Pensions Working Group carried out an intensive consultation process and met with various stakeholders. This consultation process was concluded in August and was followed up by further modelling in late autumn in conjunction with the World Bank on considerations presented to it during the consultation process.
The Pensions Working Group is expected to deliver its post consultation report to the government in March.
The government said the White Paper "An Agenda for Adequate, Safe and Sustainable Pensions" published by the European Commission yesterday recognises that member states are responsible for designing their pension systems according to their circumstances and respects the role of social partners.
It highlights that European pensions systems are under pressure from demographic ageing.
Moreover, the working age population in Europe is beginning to shrink, while the number of people in the 60s is rising faster than ever before.
The White Paper calls on member states to take into account a number of parameters to ensure adequacy and sustainability of pensions for the future, the government said.