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Karl Schembri
All pensions are unsustainable except those of the few elected individuals who make it to Cabinet or, better still, to the President’s Palace where the President and former Prime Minister is entitled to Lm29,000 in salaries and pension per year.
The government’s White Paper on the impending pensions system reform, unveiled last Wednesday, clearly shows that Prime Minister Lawrence Gonzi’s vision is to change virtually everyone’s pension except his own and those of his predecessors.
Dr Gonzi’s plan is to have everyone live on a pension that would amount to two-thirds of one’s average salary based over a full 40 years, which would effectively amount to about one third of one’s final salary, while leaving the uncapped, privileged pensions of the political class untouched.
In fact, government plans to persuade people to save more of their salaries in what is being called the “second pillar pension scheme”, through which individuals’ earnings would be placed into private funds, over and above the present contributions, so that pensioners could live decently. But there is nothing to indicate that politicians would be losing any of their privileges when they retire.
The White Paper tackles only the pensions of ordinary citizens paid from the social security account, but leaves the hefty politicians’ pensions totally out of the reform plan. Their pensions are guaranteed to remain the most generous, with no limit on the amount of pension payable, and with their pension revised with every change in salary.
The actual extent of the staggering discrepancy between ordinary pensions and those of former ministers and presidents is already clear enough to generate widespread disgruntlement.
While ordinary pensioners cannot get more than Lm4,500 a year thanks to the infamous ceiling imposed during the 1981 Labour wage freeze, MPs enjoy the full two-thirds of their salary in pensions, which are also increased according to the actual salaries of holders of political office.
This means that former Prime Minister Dom Mintoff is enjoying a pension of over Lm11,000, based on the actual salary of Lawrence Gonzi which stands at Lm16,789.
Even former Prime Minister Eddie Fenech Adami is enjoying such a pension, coupled with his salary as President, which is more than Lm18,000.
When he leaves the Palace, he will be carrying with him the full two-thirds of his presidential salary – Lm12,000 – a staggering Lm7,500 over and above the maximum given to ordinary citizens, not to mention the basic pension which he is also entitled to. His pension will rise with every revision to his successors’ future salaries.
All former presidents are similarly enjoying a two-thirds pension based on President Fenech Adami’s salary.
Ministers and parliamentary secretaries also have their hefty, uncapped pensions assured, based on their salaries which at present stand at Lm14,774 and Lm14,103 respectively.
While the government has been long warning about the pensions problem, it had no qualms approving an outrageous 23 per cent increase in salaries and pensions for ministers, parliamentary secretaries and MPs back in 2001. Since then, ministers and parliamentary secretaries have again raised their salaries by more than Lm1,000.
Government and opposition have always agreed unanimously on their own pay rises.
karl@newsworksltd.com
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