Wow! This year we have a new slogan – “European Year of Active Ageing and Solidarity between Generations”. However, around 6,000 pensioners will find this more of an insult than anything else. These are a large group of citizens politicians don’t like talking about because they represent an administrative national scandal they prefer to keep hidden away.

I am referring to so-called service pensioners. These individuals are not (as repeatedly misquoted in the press) all ex-military personnel, but also include former hospital consultants, civil servants, teachers, private company employees, and so on. They are a group of pensioners whose working life has, in most cases, been divided between at least two different jobs, one of which was with a foreign government or private company, and the other involved Maltese Social Security contributions. 

In all other organised countries, these individuals would be entitled to two partial pensions, one a service/occupational pension from the foreign government or private company, and a second Social Security two-thirds pension, the amount of both pensions being determined by the respective salaries and years of service. In Malta, however, this matter has been treated in “banana republic” fashion. When the Labour administration was in financial difficulties, its 1979 pension reform outlawed service/occupational pensions and ransacked the National Insurance (NI) contributions fund; the latter’s ring-fencing was abolished and NI contributions transferred to the Consolidated Fund to be used also for other welfare sectors, such as, the health service.   

These two public administrative blunders have had two serious side effects. Post 1979 pension reform law permits our Social Security department to subtract a foreign government or private company service/occupational pension from the Malta two-thirds pension entitlement. Secondly, the government has claimed that it is unable to rectify this pension injustice because of lack of funds. This is political economy with the truth. A substantial proportion of NI contributions have not been, and are not being, used to fund pensions but have been “stolen” to fund other welfare sectors. Senior Cabinet ministers continue to mislead the public with claims that NI contributions also pay for free health services. Maltese Social Security law does not stipulate that a portion of NI contributions pays for health services, and the 2005 Pensions Working Group report recommended that NI contributions should be ring-fenced and managed as an investment fund to provide only pensions and work-related benefits.  

In 2008, the government admitted liability for this pension injustice affecting around 6,000 citizens, but pretended to rectify it with small payments rather than satisfactory compensation. We are repeatedly assured about continuing free health and free tertiary education with stipends for all by the two major political parties.  When will we have an authoritative statement on who will resolve this iniquity in pensions, and when that will be done? There have been enough NI contributions over the last few decades to adequately resolve this service pensions injustice. Six thousand pensioners are hoping this matter will be included in election programmes – then they will start believing that “solidarity between generations” is not just another cheap cynical slogan.

Albert Cilia-Vincenti

President, National Association

of Service Pensioners

ATTARD