The pension system debated at ifs Malta Annual Seminar

The Institute of Financial Services Malta managed to, once again, rekindle the debate about the local pension system during their annual seminar, entitled The Pension System… the debate continues, which was recently held at the Hilton, Malta. As anticipated, the Seminar picked up the debate from where it left off a year ago with the objective of continuing the discussion for the next set of reforms following the introduction of third pillar pension legislation late last year.

From the expert line up of speakers, Dr Aaron Grech, Chief Officer Economics at the Central Bank of Malta gave an overview of the workplace pension schemes, whilst Dr Matthew Brincat form Ganado Advocates outlined the relative law on personal and occupational pension plans.

In his intervention, Prime Minister, Dr Joseph Muscat, said that people need to be given an adequate period to make decisions about pensions. “It would be a mistake to believe that the systems we design today will remain valid forever, thus the relative legislation should cater for a review of the current pension systems every five years.” Dr Muscat also confirmed that there are no plans to increase the pensionable age.

Paula Mifsud Bonnici outlined the vision of the Opposition about the pension system, highlighting the concern that today’s pensions will be inadequate for tomorrow’s pensioners. She stated that the Opposition is in favour of third pillar pensions, however, it leaves major segments of society exposed, in particular the white collar and skilled employees.

The debate continued during two panel sessions that homed in on the opportunities and challenges for the different stakeholders. David Curmi, CEO MSV Life outlined voluntary workplace savings schemes as a potential solution to supplement state pensions by encouraging people to save more. This solution has been introduced successfully overseas and is not onerous on employers.

In his concluding remarks, Edward Scicluna, Minister for Finance, highlighted the measures introduced by the Government to ‘diffuse the pension time bomb’, including the introduction of childcare centres and the tapering of benefits which have contributed to increasing female participation in the workforce.

Kenneth B Micallef, President of ifs Malta, expressed his satisfaction at the outcome of the seminar. “Last year, the seminar proved to be a watershed event, pushing pension reform high on the national agenda. We believe that the discussion undertaken was very fruitful, bringing to the fore the need to continue implementing the reform, so as to ensure sustainable pension systems for today’s and tomorrow’s pensioners.”