More women and migrants in skilled jobs needed to sustain pensions

The Chamber of Commerce said a voluntary, third pillar pension and more economic growth will be essential to supplement Malta’s pensions, saying the present numbers “do not add up”.

Retirement in Malta has been raised to 65 and national insurance contributions for both employers and employees were raised to 10%. But Chamber president Tancred Tabone said a third pillar pension would increase incomes for pensioners, and alleviate the burden on the social security system by stimulating private saving.

The Chamber said a compulsory second pillar pension would have serious social and economic implications. “The Chamber is not in a position to consider this alternative until such time that precise details are made known about its possible implementation,” Tabone said.

The Chamber said it was crucial to encourage higher female participation and bring in new labour migrants to fill important gaps in high-value added sectors of the local economy.

“The Malta Chamber has been consistently stating that Malta must place income generation ahead of income distribution. In this regard, it firmly believes that the sustainability of pensions via the first and third pillars needs to be constantly supported by policies aimed at economic expansion.  This would lead to higher employment generation for a better spread of the social security burden,” Tabone said.

Tabone said stakeholders needed a blueprint with clear time-frames and all relevant information, in order to be in a position to plan adequately for the future. “The time-frames will allow both employers and employees to take the necessary steps to fall in line with the necessary changes, as well as to ensure that any commitments entered into are not rendered unsustainable or unaffordable by any policy measure decided upon and announced at a later date.”

He said pension reform was closely linked to sensitive policies such as health, wage indexation, education and other areas that affect business and the economy. “The way forward must be charted in a holistic manner to ensure that the effects on stakeholders are well planned and complimentary rather than conflicting.

“Whilst the reform is underway, conflicting decisions such as policies facilitating early retirement in the public sector, must at all costs be avoided.”