Hands off Maltese pensions, unions tell Brussels over call to raise age

The Forum Unions Maltin has objected to a recommendation by the European Commission to raise the pensionable age in Malta, insisting that any measures which are detrimental to employees cannot be considered.

In its Country Specific Recommendation for Malta issued on 5 June, the European Commission recommended that Malta ensure the fiscal sustainability of the pensions system by “adjusting the statutory retirement age in view of expected gains in life expectancy.”

The confederation of Maltese unions, however, said that there are already ongoing efforts in Malta to increase the labour supply and prolong working lives.

Moreover, it appealed to the government to consult all social partners about the work being carried out by the Pensions Strategy Group, which should be finalised by 2020.

“The increase in age-related spending represents a risk to the long-term sustainability of public finances. Age-related public spending in the pension and healthcare systems is expected to increase significantly compared to other EU countries, indicating a risk of rising debt in the long term,” the Forum said, “Several measures aim to increase the adequacy of pensions also through strengthening incentives for private pension savings and voluntary occupational retirement pensions.

“Ongoing efforts have helped to increase the supply of labour and prolong working lives, with a positive impact on employment rates for women and older workers.”

It noted that, in 2018, the government had carried out adjustments to include contributions made after pensionable age when calculating pensions allowances, and had also allowed self-employed and part-time working pensioners under 65 to pay contributions proportionate to their earnings, thereby promoting a longer working life.

The statutory retirement age, the Forum highlighted, while gradually increasing from its current level at 62 years, is set to remain unchanged after 2027 at 65 years, despite a projected further growth in life expectancy.

“The Pension Strategy Group established in 2018 is expected to publish a report by December 2020, outlining recommendations for improving the adequacy and sustainability of the pension system,” it underscored.

When it comes to the issue of healthcare, measures to decentralise services from hospitals to primary care and to improve the provision of long-term care services are ongoing, it further noted.

“Current plans to expand the capacity of public hospital outpatient care can help in tackling long waiting times for certain specialties. Nevertheless, other measures to reduce unnecessary referrals to specialists and redirect inappropriate use of emergency care to outpatient have so far not been fully used thus preventing improvements in efficiency of the system.”

It added that a new concept for primary care centres and investments to gradually expand the use of eHealth is being implements, with a view to decentralise services from hospitals to primary care level.

Moreover, reflecting increasing demand for long-term care, new types of community-based and home care services were introduced in 2017-2018.

The Forum lamented, however, the despite their potential, the impact of the measures in the area of pensions and healthcare on fiscal sustainability had yet to materialise.