Creating sustainable pensions for women

MSV Life and the National Council of Women played an active role in creating awareness on the need to think ahead and plan for the future in a seminar which was jointly organised, entitled Women and Pensions.  The focus of the morning’s discussion was to ensure that one can live with dignity and peace of mind when they get older.

The conference brought together a number of leading experts in the subject of pensions, and was described as an “eye-opener” by women (and men) who attended the seminar.

MSV Life CEO, David G Curmi, highlighted the importance of taking on financial responsibility.  “People need to take stock of the situation earlier on in life, before it is too late to do something about it.  The state has an obligation toward those who have contributed to society by working, and it is important that the existing state benefits are maintained.  However, one needs to think for themselves if they want to bridge the gap between what they will get from the state, and what they will actually need to maintain a certain standard of living.”

“It is about time we replace the terms First Pillar, Second Pillar and Third Pillar, and start talking about savings, because that is what it’s all about after all!  This is a generation of borrowers rather than savers; and with the ratio of pensioners to employed persons on the rise, and people living for longer, we need to start saving as early as possible unless we want to outlive our savings.”

Mr Curmi made a number of suggestions for encouraging savings throughout his address, including that of setting up employee savings schemes with automatic enrolment, where a small part of an employee’s salary is automatically deducted and saved unless the employee opts out.  “This has proved to be a very successful strategy in other countries, substantially increasing the rate of savings throughout.  The solution is low-cost and easy to implement and, although current Fringe Benefit Regulations may be somewhat prohibitive to employers, there is nothing to stop them from offering a voluntary scheme.”

Mr Curmi also suggested linking state retirement age to life expectancy and increasing the minimum wage to make state pensions more sustainable.

Dr JosAnn Cutajar, senior lecturer at the Faculty of Social Wellbeing and Director of the University of Malta Cottonera Resource Centre, explained how women had to become more conscious of how their income would be impacted in old age. Because of the nature of their role as wives and mothers, they had to become a bit more selfish now to ensure they don’t have to rely on their children to live through old age.

“In the best case scenario, the maximum one could expect to get is less than €12,000 annually, irrespective of how hard they worked and how well-paid they were.  For women who take gap years, or opt to work on reduced hours to look after the family, this figure could be significantly lower,” said Dr Cutajar.

Director of Social Services Edward Buttigieg said working out how much you will get as a pension is the first reality check people should engage in.  “Once people do this exercise, you don’t need to be a mathematician to realise that relying on a state pension will not get you very far.”

MSV Life Chief Officer for Business Development Stuart Fairbairn said that MSV Life would shortly be making an online calculator available to enable people to work out what their state pension will be in the future and how much they should start saving today in order to provide them with the desired standard of living at retirement.  The population must understand that the earlier they start saving, the easier it is to reach the required level of income at retirement, and the  government has announced plans to help by introducing tax credits on personal retirement schemes, he said.

Vice President of the European Platform for Persons with Disability, Anca Gunta, was also present to address the needs of vulnerable groups like people with disability and those who care for them. “To get a decent pension, you need a decent job in the first place. For this to happen, legislation needs to be in place to curb discrimination and secure accessibility and availability of good jobs for disabled people.”

Concluding the seminar, Finance Minister Edward Scicluna said that while there was no plan to increase the minimum wage, the government was offering incentives for women to join the workforce. This included improved maternity leave and childcare benefits, also available to the self-employed.  Worrying figures quoted by Minister Scicluna revealed that there are currently 21,000 women who are not recognised for a pension, compared to 1,500 men.

All in all, the core message of the morning was a very meaningful yet simple one: you need to take on financial responsibility by saving something now to secure a better future for yourself and your loved ones.

Use MSV’s Retirement Planning Tool by visiting www.msvlife.com/myfuture and find out what you need to do to plan your retirement, today.

To find out more, you can contact MSV Life at info@msvlife.com, or on Freephone 8007 2220.  You may also call at any branch of Bank of Valletta or APS Bank, or contact any of MSV Life’s Tied Insurance Intermediaries. 

MSV Life p.l.c. is authorised by the Malta Financial Services Authority to carry on Long Term Business under the Insurance Business Act, 1998.