One of the solutions to the pensions problem can be immigration, according to a top government consultant.
David Spiteri Gingell, chairman of the Pensions Working Group, said a shrinking future workforce, resulting from a lower fertility rate coupled with a higher elderly population, painted a very bleak picture for pensions, which were sustained through workers’ contributions.
The solution to a decreasing workforce, he said, was to supplement it – and using skilled immigrants for certain roles could just solve the problem, he told a seminar organised by Union Ħaddiema Magħqudin yesterday.
Mr Spiteri Gingell said pro-natal policies could also help, though these could well act as a double-edged sword, since statistics showed several women who decided to have children then withdrew from the economy.
“Statistics show that 40 per cent of those who can work are not being used on the market. This is made up of two cohorts: women and retired people,” he said.
“So far, the policy used in Malta is that after retirement, people become useless. It is something we tried to change three years ago, when we said people could keep working after they retire and still get a pension.
“We have to see how these people are going to remain active in the market,” Mr Spiteri Gingell said.
He said immigration was a tool that countries like the US and Australia had been using for ages to stem the decline of workers.
An audit showed that even the financial services sector in Malta could not keep growing at the same rate with the current resources, as the country did not have enough actuaries. To address this problem, the country could either train people to be actuaries or else attract skilled workers from overseas.
Tourism was another sector facing the same problem, as it was struggling to find people willing to work as chambermaids, bar tenders and in other jobs.
He said the working group he chaired would be recommending that the retirement age be tied with longevity, a mechanism which was “transparent, neutral and politics-free”.
It was unacceptable that currently one could not invest in a pension scheme on one’s own accord (third pillar pension scheme), and he urged the government to introduce such a system as soon as possible.
The immigration idea was also mooted by UĦM president Gejtu Tanti, who said it was a pity the US and other countries were “selecting the best” immigrants in Malta who arrived irregularly when they could be contributing to the local workforce.
The seminar was conspicuous by the lack of youngsters, even though it was open for everyone.
This was an issue which troubled Malta Employers Association general director Joseph Farrugia, who said it was young people and students who should be worried about the pensions issue and not those who were already receiving a pension or were close to retirement.
UĦM general secretary Gejtu Vella warned against any experimentation in the pensions’ reform.
“We’re speaking about the standard of living of pensioners today and of those in the future. We’re speaking about people and their needs, so the measures we need to take have to always put persons at the centre,” Mr Vella said.