It looks like government is being very cautious about its pension proposals. The fact is there isn't a magic formula that works well anywhere that will ease the crisis. And part of the reason is that you can't discuss pension shortfalls without looking into issues like people having to work longer (because they want or need to), people living much longer everywhere particularly in the developed world, and the ever growing number of the smaller family unit, where instead of having two people working and contributing to pensions (the post World War II projection for modern family life) we have more and more single parent and smaller households (either separated or never married where one or one declared income is the norm, with that income often being only social security!)

So pension reform is a very delicate issue, not least because there is still an expectation of a well-paid and comfortable retirement. Yet as The Economist reminded us in its leader lately (18 February) “When Bismarck first introduced state pensions in the 1880s at age 70, they kicked in about 20 years more than the typical life span. Nowadays, State and company pensions kick in at or before 65, almost 20 years less.” And even more importantly, “But the issue is more than just a financial one: it raises social as well as economic questions, and its resolution will involve governments, employers and people.”

Unfortunately this country is not, at least not yet, in one country mode, so don’t expect too much intelligent debate on this issue. One side will claim it has the answers. The other side will pick on anything in the proposals that will cause alarming headlines (raising the retirement age comes easily to mind) and in the usual ping pong game of Maltese politics, more and more of us will switch off and concentrate on the things which are far more fulfilling like the fortunes of our football team, the ups and downs of our favourite soap or the ebb and flow of our fortunes, sometimes called struggling with the cost of living!

Although pensions reform will be a political football, it is unlikely to be a major issue for voters in any election, not least because those who are nearing or thinking about retirement will only be slightly affected by the proposed changes. That having been said, in this country that makes mountains out of molehills (and I’m not just referring to Maghtab), even a slight change will be rejected unless there are cast iron guarantees, which no government can give on future pensions anyway.

I think the first thing politicians should say on this issue is that they themselves would also be subject to the same changes, and that different pensions for those who go into politics is now a thing of the past. I think that would go a long way in helping us accept that these changes are really good and better for all, so good in fact that everyone from the President to the pauper, would in fact be subjected to the same rules. In fact, I believe both leaders have made noises to that effect in the past, and now is the time to move on from words to deeds, and remove the different pension arrangements for those who serve us in Parliament. Plenty of other people also serve the country well, and do not have privileged pension arrangements. This is one area where the post EU entry government can really show there is a new and different way of doing things.

The issue of us working longer may not need to be forced on us. More and more of us might want to work past retirement age anyway, realising that there is no way we can match our current hedonistic lifestyles, (and that of our young ones even more so), and that with more and more time on our hands, we simply will need more money to enjoy ourselves. Today’s baby boomers have really had quite a good life compared to their parents and funding this in retirement, especially if the retirement is long, will not be easy for any government or individual.

One way proposed so far is to have anti ageist legislation. But so far this has only served to put people or companies off hiring older people in the first place. It hasn't freed the labour markets for older people at all. Research has shown that making older people hard to fire actually discourages companies from recruiting them in the first place.

Flexibility is going to be the key for future work patterns and sustaining any pension system. Much much more flexibility for women who cannot possibly be working super mums, (I mean they want us to have more babies to help the pensions shortfall, as well as work to increase our pension contributions... that really is too too much!!)

The world is changing faster than our policy predictions can cope with. Who would have thought, in say the tourism industry, that 10 years ago you would practically have to pay people to come to your island (aka low cost airlines)? Who would have thought global weather changes were going to happen so fast?

And who would have thought that the idea of a pension in retirement would become something many of us could not afford and hence we would have to work for longer as we lived longer? Understanding future trends and capturing the public’s imagination to try and have policies that adequately deal with these new trends are the challenges that have to be met by modern politicians...