In December 2025, Parliament was presented with a document of long-term national importance: the 2025 Strategic Review on the Adequacy, Sustainability, and Solidarity of Malta's Pension System. This is the fourth Review of its kind, and it matters. It sets the direction of pension policy until 2070 - a statutory exercise, required under Article 64B of the Social Security Act. It must be undertaken every five years to assess whether the system remains adequate, sustainable, and socially equitable.

I have been closely involved in Malta's pension reform journey for over two decades, including as Chairperson of the Pension Reform Commission and as a member of the 2015 and 2020 strategy groups. I therefore recognise both the complexity and the significance of this exercise. The current Pension Strategy Group deserves credit for a serious, well-researched, and forward-looking report. It goes beyond projections. It challenges how we define fairness, responsibility, and security in old age.

The demographic outlook is stark. Life expectancy continues to rise, while fertility has fallen to historic lows. By 2070, almost one-third of Malta's population will be over 65. The old-age dependency ratio will double. Two workers will be supporting each pensioner. Under unchanged policies, the pension deficit is projected to reach 4.1% of GDP. At the same time, pension adequacy is expected to fall from 55% of pre-retirement income to just over 48%. These pressures cannot be ignored. Nor can the role of migration. With more than 100,000 foreign workers contributing to the system, labour-market participation and migration policy have become central pillars of pension sustainability.

The review is clear on one point. The State pension alone is no longer sufficient to deliver a dignified retirement. A multi-pillar system is no longer optional. It is essential.

Auto-Enrolment, therefore, becomes a critical reform. The government's intention to introduce AE is confirmed, but success will depend on execution. Coverage must start early. Costs must remain low. Governance must be strong. Confidence in the system will determine participation and outcomes. The Review also makes clear that AE must complement, not destabilise, the State system, and that its design must protect contributors from high cost, volatility, and opacity.

The Review also sets out seven core principles that now define Malta's pension framework. These include solidarity, adequacy, gender equality, inter-generational fairness, diversification, transparency, and consultation. Together, they form a modern social contract between the State and contributors.

Importantly, the report does not dictate solutions. Instead, it invites debate. Fourteen consultation questions highlight unresolved structural issues, including:

o    Comprehensive Adequacy Measures: Should pension adequacy be measured using full household income and living circumstances rather than just individual pension rates?

o    Wage Composition and Fairness: Should limitations on non-basic wages (bonuses and allowances) be considered? Currently, these are often excluded from pension calculations, leading to a "pension shock" where retirees find their benefits are based on only a fraction of their actual lifetime earnings.

o    Prioritising Harmonisation: Should the government prioritise the harmonisation of the pre-62 and post-62 maximum pensionable income levels to ensure equity across different generations of retirees?

o    Poverty Prevention: Should the Guaranteed National Minimum Pension (GNMP) level be somehow linked to the at-risk-of-poverty level to ensure a dignified standard of living?  

These are not technical footnotes. They go to the heart of fairness and sustainability. They also reflect areas where structural inequities persist, particularly across gender, income groups, and contribution histories, despite the progress achieved since the 2020 Review.

Public engagement is therefore essential. The consultation remains open until 17:00 on 3 April 2026 and can be accessed through the government portal. The choices made now will shape retirement outcomes for decades. This debate should concern every worker, not just future pensioners.

I will continue to return to these issues in future columns. A sustainable pension system must balance fiscal discipline with social dignity. This Review gives Malta the opportunity to do both. The 2025 Strategic Review can be downloaded from: https://www.gov.mt/en/publicconsultation/Pages/2026/NL-0001-2026.aspx.

David Spiteri Gingell is a Governance, Institutional, and Digital Transformation Consultant