Pension sustainability and active ageing in the European Union with a focus on Malta

Abstract

This dissertation examines the role of active ageing in promoting pension sustainability within the European Union, specifically focussing on Malta. Amid demographic ageing, decreasing birth rates, and increasing life expectancy, Member States are encountering escalating fiscal constraints on pay-as-you-go (PAYG) pension systems. This research employs a qualitative approach, integrating cross-national quantitative analysis with qualitative policy evaluation, featuring a comprehensive case study of Malta and a comparative analysis of Country-Specific Recommendations (CSRs) inside the European Semester framework. Three research subjects guide the analysis: Commencing the discussion by addressing the initial inquiry: What is the current state of affairs regarding the employment of older workers in selected Member States of the European Union? Subsequently, the second question: How is the European Union encouraging active ageing in the labour market in order to improve pension sustainability among the Member States, including Malta? And as the third question: How is the active participation of older individuals in the labour market being encouraged in Malta to improve the sustainability of the pension system, within the framework of the European Union? The findings indicate that while nations like Sweden and Greece have implemented progressive retirement age reforms, others such as Malta and Romania are deficient in correlating the statutory retirement age with life expectancy. Furthermore, while the EU progressively promotes active ageing via Country-Specific Recommendations (CSRs), the majority of these suggestions are vague, and their implementation varies significantly among Member States. In Malta, despite governmental initiatives aimed at increasing employment among older workers and promoting delayed retirement, obstacles remain, including low participation rates, restricted flexible work options, and the lack of demographic-based retirement age indexing. This study suggests that enhancing pension sustainability necessitates both fiscal adjustments and structural labour market reforms that foster lifelong learning, inclusive employment, and active ageing as a social asset. The Maltese instance underscores the necessity for enhanced national conformity with EU directives and more efficient policy execution to address enduring demographic and fiscal issues.