The Alliance of Pensioners’ Organisations refers to the opinion piece by Joseph Grech (May 23) titled ‘Letter of protest’.
In terms of section 56 of the Social Security law a pension awarded for service rendered to an employer by an employee is considered as a service pension and deducted from the two thirds pension entitlement.
On retirement, where a person is eligible for a service pension he is not entitled to a two thirds pension but to a flat rate retirement pension at single or married rate.
As pointed out correctly by Grech, up to the current year the amount of service pension which is not considered for abatement purpose from TTP has gone up to €2,266. This means that the original amount of service pension on uncommuted basis a person is entitled to on retirement has been reduced by €2,266.
When the yearly reassessment of pension is carried out in January of each year, where it results that the remaining balance of service pension entitlement, after deducting €2,266, together with the flat rate retirement pension exceeds the two thirds of the maximum pensionable income (MPI) of €18,271, the pensioner is not entitled to further increase except the cost of living.
This desperate situation has been in place since 1979 and has become a nightmare for persons entitled to a service pension ever since.
Any form of discrimination and different treatment among members of the three pillars of democracy is deplorable
The capping of the maximum pensionable income is a major contributor to this unpleasant and unfair situation. In 1979, the MPI was pegged with the salary of the President but currently it went down to the salary of scale 13 of public service employees.
In fact, in the Pension Adequacy Report 2018, the Social Protection Committee in Brussels as well as the European Commission remarked that “the increases in salary scales since the capping was introduced make the term two thirds pension sound very hollow”.
Pensioners’ position has been further aggravated and complicated by the new provisions implemented by the Pensions Reform.
Now we have two categories of pensioners. Those who were born on January 1, 1962 and after – category A, and those who were born on December 31, 1961 and before – category B.
As regards the maximum pensionable income in the case of category A, the capping is at €23,700 whereas in the case of category B the capping is only €18,271. It has to be pointed out that there is a difference of €70 per week in the rate of pension between the two categories.
In the circumstances the financial position of category B pensioners entitled to a service pension has gone from bad to worse and also discriminatory when compared to those of category A and in future will lead to a risk of poverty problem.
In fact, on this particular issue the report pointed out the “age discrimination in various measures on the two thirds pension”. These include the capping, the guaranteed national minimum pension and the reassessment of pensions.
In this scenario the Alliance of Pensioners’ Organisations, on behalf of all pensioners who are entitled to a service pension from any source including those entitled to a pension from the Treasury in terms of the Pensions Ordinance, appeals to this administration to be fair and treat all pensioners equally.
The alliance is duty bound to point out, in support of all pensioners, that members of Parliament, members of the judiciary and members of the executive in one way or another all contributed to the well-being of the State. They all gave a service to the State with loyalty, integrity and responsibility according to the best of their ability.
Any form of discrimination and different treatment among members of the three pillars of democracy is deplorable and in the name of social justice it should be addressed before the end of this legislature for the benefit of all concerned.
Carmel Mallia is president of the Alliance of Pensioners’ Organisations.