A retired insurer would chair a new government task force charged with recommending measures to encourage the take-up of voluntary workplace pension schemes, the Finance Minister said yesterday.
Edward Scicluna broke the news during a pensions’ reform conference organised by the Institute of Financial Services and the Times of Malta held at the Hilton Hotel in St Julian’s. In March, the minister informed the social partners about the government’s plan to set up a task force to explore measures to encourage so called second-pillar pensions. This entails workers and possibly employers contributing a sum of money over and above the State pension to a special fund.
The task force was welcomed by the Opposition and the Union Ħaddiema Magħqudin but doubts have been expressed about the fact that the added contribution will be voluntary. Moreover, employers have already warned they were not ready to shoulder the possible financial burden of such a measure.
The task force will comprise representatives of the finance and social policy ministries and the financial services watchdog. It will be allowed to appoint its own independent consultants. Prof. Scicluna declined to give further details, saying the task force would be officially unveiled “in the coming days”.
He threw cold water on speculation that the setting up of the task force might signal a shift in the government’s policy against compulsory second-pillar pensions.
“I don’t think we need to turn this [debate] in favour of or against second-pillar pensions as in the case of the morning-after pill,” Prof. Scicluna replied when asked to outline the government’s pension policy.
His clarification echoed the statement made earlier by Prime Minister Joseph Muscat, who told the conference the government had no intention of “moving silently towards [compulsory] second-pillar pensions. I am not going to allow the country to make the same mistake,” he said with reference to countries like Poland and Chile, which have introduced the measure.
Dr Muscat reiterated that raising the retirement age was not on the cards, adding the government would be increasing State pensions further, following the increment announced in the last Budget.
Shadow social policy minister Paula Mifsud Bonnici warned of the dire consequences if the “pensions ticking timebomb” was not addressed. She warned the current system would not be sustainable beyond 2040, adding that incentives to encourage third-pillar pensions rolled out two years ago were very modest and, consequently, the take-up was low.