A well-researched article on our pension system (‘Letter of protest’, May 23) lamented the discrimination in the manner in which different pensioners are treated.
This with regards to those receiving a pension from their former employer in addition to their social security pension (that is, the service pension).
The article contained calculations and made suggestions on how to improve the scheme started in 2008, which reduced the amount of service pension set against the social security pension by €466 a year.
When the scheme was launched, the amount was €466, coincidentally because 2008 was an election year.
However, before entering into the merits of how the current €200 annual deduction might work without discriminating between different categories of pensioners, there is one basic question that requires an answer. This is whether the State has the legal right (not the power) to appropriate some part of a pension to which the citizen has contributed.
Another element, not given any weight in the article I mentioned, was the moral, if not legal, correctness of the current rate of the maximum pensionable income (MPI), two-thirds of which constitutes the maximum rate of pension that can be paid.
Had the writer asked himself these two basic questions, his approach might have been different.
Mine certainly is. Therefore, some background on how and why this category of pensioners is messed about more than others is warranted.
In 1978, the Labour government decided to revise the then National Insurance Act by introducing a two-thirds pension scheme for all: a truly worthy measure.
The concept was that every person should pay a contribution shared between employee, employer and the State. In other cases, like the self-employed or those unemployed, similar but different arrangements applied. The maximum pension payable was not to exceed two-thirds of the emoluments of the President.
In his wisdom, the then prime minister decided that part of the expenditure should be borne by those already entitled to a pension from their former employer.
The 1978 amendment imposed an obligation on pensioners in receipt of a service pension to forego a portion (in many cases a substantial one) of the retirement State pension to which they and their employers had contributed.
To Dom Mintoff, acquired legal rights meant nothing.
The fact that Parliament legislated against the interests of thousands in breach of their rights highlighted the inability of politicians in office and in Parliament to recognise they are the servants of citizens and not their masters.
This was an illegal, immoral and unethical decision that flaunted the power of the State to abuse the rights of citizens.
The effects of the decision were compounded by the non-revision, up to 2003, of the MPI rate. From 2004, because the MPI broke through the ceiling, the rate started to be increased each year by the amount of the flat cost-of-living increase (based on the minimum wage).
This now stands at about €18,000, permitting the payment of a maximum pension of about €12,000. Had the MPI at least been inflation-proof since 1981, the rate would now be about €33,000, permitting the payment of a maximum pension of approximately €22,000.
This would be somewhat nearer to prevailing pay levels.
Of course, this is not how politicians treat themselves, their families and those near or dear to them.
In their case, there is no ceiling, and they consider it a right for their pensions to be revised consistently, in line with movements in their emoluments.
Nor would most of them think it wrong to receive the social security retirement pension in full, over and above the pension in their ‘honorarium’.
If those persons who hold public office want to show how truly ready they are to serve, then they will immediately remove the illegal and immoral provision that sets any service pension against the social security pension
Additional perks would not be considered unseemly either. Some very telling remarks by a former MP and judge relating to pensions says it all.
If those persons who hold public office want to show how truly ready they are to serve, then they will immediately remove the illegal and immoral provision that sets any service pension against the social security pension.
Further proof of their true consideration for the welfare of thousands of pensioners would be a sensible, immediate revision of the rate of the MPI for contributors born on or before December 31, 1961, and revised annually by not less than four-fifths of the annual increase for those born on or after January 1, 1962.
These two changes together would make pensioners believe that there still exist politicians who work to improve the condition of all citizens.