It is not common that unions and employers agree on something.

Usually, given their different interests, they are in conflict. Employers seek to maximise their investment, for which they would have taken risks, while unions defend the workers, arguing that their contribution is the make or break of the enterprise.

So when unions and employers see eye-to-eye on a particular issue, there must be a valid reason, and it should not be swept aside. Unfortunately, the government is doing so. It is ignoring what unions and employers agree upon.

We’re talking about pensions. In the past weeks, this media house has carried articles which showed that both employers’ associations and unions are in agreement on what should be done, but the government is of a different opinion. Since the government holds the reins of the country, it is the one with the power to implement ideas. So far, it has refused.

Employers and unions are of the opinion that people aged between 61 and 64 – and who would have paid the necessary National Insurance contributions in full – should be allowed to remain legally active in the labour market while still receiving a pension, or at least part of it. As things stand today, they cannot. A person who reaches 61 years of age at present, and who has paid the NI in full, can opt for an earlier pension entitlement provided that they will not remain in any gainful occupation, part-time or full-time.

In comments to The Malta Independent on Sunday, the Malta Employers Association and Malta’s two largest unions, the General Workers Union and the UHM-Voice of the Workers argue that given the present situation in the labour market, people who at age 61 choose to “retire” should not be deprived of the possibility of remaining gainfully employed while still receiving a pension. For its part, the Malta Chamber of Commerce said that banning people who opt for early retirement from undertaking active legal employment has many adverse effects.

The government thinks otherwise. In an article published in The Malta Independent on Sunday on 9 July, the permanent secretary at the Ministry for Social Policy and Children’s Rights, Mark Musu’, wrote that “removing the limit to work when availing of early retirement could reverse the positive trends and the gains achieved in the last years.” The government, he said, is of the opinion that the right approach is to enhance existing incentives to encourage people to postpone retirement rather than introducing measures that make it easier for early exits.

The counter-argument, which is being made by unions and employers, is that many people, at 61 years of age, would want to cut down on their hours of work, but would still want to retain some form of employment, even on a part-time basis. But they are not allowed to do so if they get the pension they are entitled to – which, it must be said, on its own would drastically reduce their lifestyle, as today’s pensions are nowhere near income from full-time employment. So, in a way, they would be forced to remain in full employment beyond the retirement age.

The other argument being made is that, if people do opt to retire at 61 when they are still in a position to give at least a partial contribution, their experience and knowledge would be completely lost. And, given the fast technological advances that are being made, it would be more difficult for them to return to work at 65 after a four-year gap during which time so many changes can happen.

Let us then also remember that the Nationalist Party, in its electoral programme for the 2022 election, had promised what the unions and employers are clamouring for. The PN had then pledged to allow workers who completed payment of their National Insurance contributions the opportunity to continue working until they reach pensionable age, and get a part-pension based on when they choose to retire.

This is, more or less, what has also been the argument put forward by the GWU and the Chamber of Commerce in a report that was compiled by David Spiteri Gingell, a former chairperson of the Pensions Strategy Reform. What was recommended was the creation of an early retirement pathway for persons aged 61 to 64, during which period they receive a reduced pension and continue to be actively engaged in the labour market. 

In an interview he had given The Malta Independent on Sunday last year, Spiteri Gingell had said that because of this all-or-nothing approach, enterprises have been losing a core group of experienced people who may no longer want to work a 40-hour week but are willing to work reduced hours.

This recommendation has been rejected by the government.

What unions and employers are asking for is another government u-turn.