[WATCH] Muscat won’t raise retirement age, but public pension cannot be sole income source

Prime Minister Joseph Muscat has said that the national retirement age will not be increased

Prime Minister Joseph Muscat has said that the national retirement age will not be increased, but that public pensions could not be the only source of income for retired individuals.

Speaking at a seminar on the pensions system organised by the Institute of Financial Services, Muscat said that working beyond a certain age should be a personal choice, and added that the government was working to create incentives for private pension systems for the first time ever.

Muscat stressed that the government maintained that the current national insurance contribution levels were sufficient, and that the introduction of second pillar schemes or mandatory second pensions had not all been successful around the world.

“To be socially sustainable our system needs to provide a balance between contributions across generations,” Muscat said, adding that the pension system needed to evolve and be revised if it was to remain relevant and useful over generations.

“With our five-year review system, we have ensured that the system is constantly monitored and optimized over time,” he said, adding that sustainability was a central aim of these measures.”

Muscat said the government had instilled a new minimum pension scheme as the first planned increase of many. “12,000 of the most vulnerable pensioners received a better income, and the recent Caritas report proved that those on this minimum pension could keep up with a decent living,” he said.

He pointed out that the scheme was just one link in  chain of changes planned and added adding that stronger pension systems would require an active employment policy.

“Getting the right environment for jobs is the first step and we now have to work on creating the necessary skills and training to increase people’s employability,” Muscat said, stressing that giving citizens further training to get the best possible jobs was the main aim of the government’s work at this point.

He added that labour policies like the Youth Guarantee and tapering of social benefits, and universal free childcare had encouraged many to re-enter the job market. “While I agree that wealth needs to continue trickling down, the victims of a weak economy are those in lower positions, and wage cuts as well as those in precarious employment,” he said.