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Kurt Sansone
The Pensions Working Group entrusted with conducting an extensive consultation process with different stakeholders on possible avenues for reforming the pensions system is to present its final recommendations to Government by mid June.
Although it is up to Government to decide when it wants to start implementing proposals to reform the pensions system, the chairman of the Pensions Working Group David Spiteri Gingell believes the recommendation for the retirement age to start increasing as early as 2007 made in the White Paper published with the budget should be heeded.
Talking at a press briefing yesterday during which a number of impact assessment studies on the proposed pensions reform were launched, the Working Group’s chairman David Spiteri Gingell said the ball will be back in Government’s court to decide what and when it wants to implement changes.
Spiteri Gingell said that irrespective of whether private pensions will be made compulsory or not, they should at least be introduced on a voluntary basis as early as next year. Asked about the possibility of raising National Insurance contributions, Spiteri Gingell said he was averse to such an idea.
The Working Group yesterday made public a social impact assessment by the Management Efficiency Unit, an actuarial report carried out by independent consultants commissioned by the Malta Financial Services Authority and a synthesis of an economic impact assessment being compiled by the Economic Policy Division.
Spiteri Gingell also presented the results of a public perceptions survey carried out by the National Statistics Office on pensions and lifestyle attitudes.
And the results of the survey provide much food for thought. A majority of people agree they should have a private retirement pension to supplement their basic Government pension once retired, but when asked whether they are currently investing in a private pension or life assurance less than 40 per cent said ‘yes’.
More worryingly the survey reveals how more than 63 per cent of respondents said they do not manage to save any money. Almost 18 per cent said they managed to save under Lm1,000 annually. The findings tally with financial statistics issued by the Central Bank which show how savings have gone down dramatically over a decade.
kurt@newsworksltd.com
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