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Pensions boomerang hits MPs

The ill-conceived plan to enact legislation giving members of Parliament more privileges backfired. It also severely hit the reputation of parliamentarians to get their priorities right when discussing their own remuneration packages.

In a nutshell, the primary provision of the proposed legislation was to give the opportunity for MPs who served in Parliament for one term to qualify for a full MP pension. So far, an MP has to serve two five-year terms to be eligible for a pension.

In a rare behind-the-scenes agreement between the government and the Opposition, it first appeared that there would be a consensus in Parliament on the approval of such a change. The Democratic Party on the Opposition side was kept in the dark. It protested vociferously when the details of the changes were made public. Its two MPs expressed the majority’s disapproval of schemes whereby the government and the Opposition reach agreement to provide financially for their retirement while giving a low priority to the dire situation that thousands of pensioners face on a daily basis because of the inadequacy of the national pension.

It is surprising that the government that exploited so efficiently the Gonzi administration faux pas when it gave a €500 increase to certain serving MPs resorted to a similar strategy to improve the pension rights of some parliamentarians in a not too transparent way.

The Nationalist Party soon realised the mistake of being part of such an agreement that was apparently unpopular with the vast majority of people. It withdrew its backing, forcing the government to drop the proposed law.

Adrian Delia was right when he said the Opposition is there to serve. When he heard the unfavourable feedback of the people, he rightly decided that ordinary people’s pensions, rather than that of MPs, was his priority.

The Democratic Party must have scored critical political points when it mobilised public opinion by urging people to sign a petition calling MPs not to pass any reform of their own pensions “before all pensioners receive a decent living pension”.

The whole issue of pensions remains a slow burning one that shows no signs of being extinguished. Thousands of pensioners are living at the risk of poverty as the so-called two-thirds pension is mostly inadequate for today’s circumstances. Admittedly, some changes have been made and pensions increase gradually every year. But the adequacy gap of the national pension and the cost of living experienced by pensions is still wide.

So far, the government has failed to adopt the recommendation to introduce the second pillar of pension reforms, which would see those in employment and their employers contributing in a mandatory way to the building up of a pensions’ pot for when they retire.

With an economy performing well, now could be the right time to change the culture whereby people actively prepare for their retirement by saving more. Electoral expediency and some trade unions’ objections to mandatory pension schemes have exposed the government’s weakness in making tough decisions for future generations.

MPs’ financial package and pension rights are, of course, important. But prioritising these issues at a time when many ordinary pensioners struggle to make ends meet is undoubtedly shortsighted politics.

The country’s major political parties should learn that boomerangs often return and hurt them.

This is a Times of Malta print editorial

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