Contributory Pensions – Edward Buttigieg
The Social Security Act (Chapter 318) provides for a Two-Thirds Pension Scheme and for a Retirement Pension Scheme with the first one providing an earnings-related pension and the latter providing a flat rate pension. Beneficiaries eligible to a minimum retirement or widows pension, to an Invalidity pension, or in receipt of a service pension, are awarded a flat rate pension. Beneficiaries eligible to an earnings-related retirement or survivors pension are awarded an earnings-related two-thirds pension.
Retirement age currently stands at 62 and is gradually increasing to reach 65 by 2027, and the maximum contribution period to draw a full pension is currently 35 years. It will increase to 40 years for those born between 1/1/1962 and 31/12/1968, and 41 years for those born on or after 1/1/1969.
The two-thirds pension rate provides for a maximum retirement and survivors rate that reflects the maximum capped social security contribution rate. All pensions are adjusted annually as a result of the cost of living awarded by the Government. Reforms to the pensions system are on-going to maintain the sustainability and adequacy of the system for current and future beneficiaries. Apart from increases in the pension age and contributory periods, recent reforms also included the launch of second and third pillar pensions.
The Third Pillar Pensions – Dr Andrea Zerafa
Pensions are traditionally divided into three Pillars, the First Pillar refers to Public Pensions, the Second Pillar refers to Occupational Pensions and the third Pillar is the Personal Pension Schemes. In Malta, the Second and the Third Pillar are not mandatory. Any Personal or Occupational Schemes are regulated by the MFSA in line with the Retirement Pensions Act, Regulations and Pension Rules issued thereunder. Recently the Maltese Government has launched the Third Pillar Pension Scheme which encourages Maltese residents to start saving for their pension by investing in private products. As a result, Third Pillar Pensions have started gaining popularity in Malta. In my presentation, I will be going through a number of provisions of the Retirement Pensions Act, Regulations and Pension Rules for Personal Retirement Schemes which regulate Retirement Scheme Administrators and Personal Retirement Schemes.