Pension reform: why has it not made pensions adequate?

It seems like a long time since – as a journalist – I started writing about the pension reform. That is probably because it is: 18 years to be exact.

Vanessa Macdonald

So much has changed over the decades since pensions had been introduced to the island: from an aging population to longer life expectancy; from the country’s economic make-up to the number of women in the workforce.

The Pensions Working Group, chaired by David Spiteri Gingell, was set up in June 2004. It was by no means the first review of the pension system on the island. In 1997, the MCED commissioned a report with various other reports presented until the World Bank submitted its own in March 2004.

The 2004 Working Group introduced two concepts into the vocabulary that are still a priority to this day: sustainability and adequacy. It was all about modelling the future.

From the government’s point of view, demographics were showing that there would not be enough money paid into the system by employees in the future to sustain the pensions it knew it would need to pay out.

From the pensioners’ point of view, it was all about how much they would have to live off in their retirement, and whether it would be enough...