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A public consultation has been launched on the introduction of an auto-enrolment occupational pension scheme, representing a significant reform in Malta’s retirement savings sector.
The Ministry for Finance explained that the main objective of this scheme is to strengthen access to retirement savings. Employers will be required to automatically enrol their eligible employees in pension schemes authorised by the Malta Financial Services Authority.
It added that employees will nonetheless retain the right to opt out of the scheme, maintaining its voluntary nature while increasing access to retirement saving solutions.
Eligible employees include those between 18 years of age and those who are ten years away from their retirement age, who pay tax in Malta, work habitually in Malta, and whose job is their primary source of income.
The consultation document proposes a minimum monthly contribution of €50 by employees who choose to participate in the scheme, deducted directly from their salary. The Government said it has committed to paying? an additional contribution for its workers, up to a maximum of €100 per month, as a sign of responsible leadership. In the private sector, employer contributions will remain voluntary.
The Ministry said that the schemes are intended to be defined-contribution in nature, with investment structures that automatically adapt to the employee’s age (life-cycling). Cost-capping measures will be introduced to ensure value for money, alongside standardised information requirements to guarantee transparency and ensure participants are fully informed.
Pension portability when changing employment will be ensured through mechanisms allowing for seamless transfers between schemes. Those who participate in these schemes will be able to benefit from tax benefits for both workers and employers.
The consultation document proposes that the scheme be launched in the public sector in the fourth quarter of 2025 and extended to the private sector within six months thereafter, the Ministry said.
The consultation period will last one month, during which feedback and proposals will be collected from stakeholders, organisations, and the general public. After the consultation closes, the Government will issue a report that addresses the suggestions received and outlines any proposed changes to the framework.
For more information or to participate in the consultation process, please click here. [1]
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