The Minister for Finance, Prof. Edward Scicluna announced that the Pensions Model underlying other policy studies about the sustainability of Malta’s pension system will be published shortly and will serve as the basis for broad-based consultation with all stakeholders as to the way forward. Prof. Scicluna was speaking during the closing address of a seminar titled ‘The Pensions System – Is there a sustainable future?’ which was held by the Institute of Financial Services and the Times of Malta, on Thursday 19th February 2015.
During his address, the Minister for Finance said that before any lasting and effective pension reform can take place, the present scenario must be first analysed and understood in a manner that takes into account realistic demographic and economic assumptions for the coming years.
“We needed an updated realistic model that would analyse the future performance of the pension system between now and 2060. We could not talk about or consider changes unless we knew what the results of the current system will be,” Minister Scicluna said.
He noted that these results have now been obtained thanks to the study carried out by the Ministry’s Economic Policy Department with assistance from the World Bank. These have now been sent to the European Commission for verification and approval, which is expected shortly.
“This document together with the recommendations of the Joint Pensions Strategy Group will be available to the Opposition, as well as stakeholders, and will be the starting point for broad-based consultation into what kind of pension system we want,” Minister Scicluna said.
He said that this study took into consideration realistic assumptions provided by the Commission related to migration, economic growth, labour participation rates and debt-to-GDP ratio.
[nggallery id=243]
“The national debt is linked with the pension system. The country’s debt will have repercussions for future pension contributions. We have said that we intended to stabilise and reduce debt. Lower national debt will have positive repercussions on pensions and the sustainability of Malta’s pension system,” Minister Scicluna said.
In this regard, Minister Scicluna noted the positive remarks of Commissioner Pierre Moscovici, with whom he met the preceding day, who remarked that the Commission is pleased with Malta’s debt and deficit reduction efforts.
He also noted that the study has confirmed that the outlook for Malta’s pension system is not as bleak as is often described. “The study has shown that the state of the pension system is not ‘critical red’ but rather ‘amber’. Action is still required, but no longer in the context of an imminent crisis,” Prof. Scicluna said.
He underlined the need for the Government and stakeholders to remain level-headed and keep monitoring the situation, as is being done in seminars and conferences on pensions where stakeholders are able to share experiences and concerns.
Friday 20th February 2015
