Why are we not surprised that a pensions’ guru considers Malta’s contributory social security pensions to be relatively generous? Or that he thinks that benefits will have to be reduced? (The Pensions Guru – Business Today 22.07.09)
Obviously this is not how pensioners and employees who are not senior executives see it. But then they are not part of the management team of a company selling life assurance and similar, seeking to expand turnover, and profits. For such, the lower the state pension the greater the pressure on people to purchase the company’s products.
Possibly nobody has told Mr Fairbairn that occupational pensions in Malta are the overwhelming exception. One such is the state-funded salary-indexed pension with no ceiling limitations for Malta’s legislators. Possibly he may also be unaware that employers, on the plea of loss of competiveness, shy away from contributing to Second Pillar Pensions. Hence the emphasis on Third Pillar Pensions where the risk is on the contributor.
The unfortunate truth is that the vast majority of those in employment just cannot afford to contribute meaningful amounts (in many cases anything at all), to a long-term savings vehicle. The spiel goes that the income derived from such savings will complement the state pension and enable savers to maintain a good lifestyle.
No mention was made by the interviewer of the plight the majority of pensioners in the UK find themselves in, even with the much-touted private pensions’ supplements. Nor was there any enlightenment why a small country such as Malta, with its inherent limitations, should opt for a failed Anglo-Saxon model of pensions provision which is leaving millions close to the poverty line. Why not a rigorously managed state scheme able to provide truly adequate pensions?
A. J. Tabone
Chairperson, National Pensioners’ Association
St Julian’s
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