The World Bank has been commissioned to study the Maltese pension system and will be doing so at the end of this month, according to Parliamentary Assistant Stephen Spiteri.

Replacing Family Minister Dolores Cristina during a seminar organised yesterday by PKF accountants and business advisers, he said the goal of the pensions’ reform was to “secure adequacy and retain sustainability”.

He added that the government’s Pensions Working Group had already begun consulting various stakeholders to review the system.

Meanwhile Parliamentary Secretary Chris Said said that over the coming months there would be more discussions on the subject, including at the Malta Council for Economic and Social Development.

“Our aim is that, following consultations held within the MCESD, we can come up with more sound and concrete recommendations regarding the pensions’ reform,” he said.

The seminar focused on various issues, including the EU Green Paper presented for public consultation, which among other things suggests increasing the retirement age across member states to 70 by 2060.

The consensus at the seminar seemed to be that, if retirement age was increased, companies would have to begin valuing older workers more because currently they were seen as a burden not worth investing in.

Pensions Working Group chairman David Spiteri Gingell painted a very bleak picture of the future, pointing out that Malta’s population was “aging and dying” because people were living longer but having fewer children.

“Birth rates are going down and there’s no new blood coming in. These are disturbing statistics,” he said, adding that the country might need to start considering immigration seriously in the way countries like Australia, the US and Canada had done.

Meanwhile, economist Gordon Cordina was more positive and said higher life expectancy should not be seen as something negative. He said the future was not necessarily bleak because there may be fewer workers earning much better salaries.

He said the present system where workers supported the current elderly generation should remain but had to be constantly sustained through economic growth and involvement of more people in the working world.

On the other hand a secondary pillar of pensions would ensure adequacy, although this form was also risky because of the volatile capital markets. He stressed, however, that pension funds should not be seen as a form of tax but a form of saving.

Malta Employers’ Association director general Joe Farrugia questioned whether employers would have to fund secondary pension schemes and whether this would affect competitiveness.

Responding to appeals for the Maltese to save more and spend less, he said it was not fair to say the Maltese did not save because they tended to invest in homes and second properties – something other EU citizens did not do as much.

Shadow finance minister Charles Mangion said a comprehensive pension reform to improve sustainability and adequacy of the pension system was “an urgent matter”.

“Postponing is no longer an option, and although the current economic climate is not ideal... the government could help ease the pain by driving down costs through higher efficiency in the public sector and reducing personal tax rates to 25 per cent,” he said.

He explained this would compensate for higher forced saving resulting from the introduction of a mandatory second pillar in the pensions system.

He also questioned how the economy would be affected if people decided to save and cut down on spending.

Union Ħaddiema Magħqudin general secretary Gejtu Vella said any decisions had to be taken with people in mind while the General Workers Union stressed there had to be a labour market reform where work became more attractive to those who were currently shying away.

Helga Ellul, who chairs the Malta Chamber of Commerce, Enterprise and Industry, said the pensions debate had to be as open as possible because businesses required time to plan ahead.

She argued that a one-size-fits-all solution for the entire EU was a mistake because of different socio-economic realities, and Malta had to encourage immigrants, women, unemployed youths and the elderly to work through flexible work options.