Pensions in Malta
Over the past few years, Malta has established itself as a centre for the management and administration of personal pension schemes. While it has primarily been catering to the UK market, other European cross-border schemes are currently being established and rapid growth in the pensions in Malta market is expected.
FinanceMalta Investor Guide - Wealth Management
The creation of international pensions plans in Malta became a possibility fairly recently, as pension provision has traditionally been considered from a purely domestic perspective; however, the increasing mobility of both people and companies has facilitated this paradigm shift.
New Pensions Legislation in Malta
The Retirement Pensions Act (Chapter 514 of the Laws of Malta) came into force on 1st January 2015. The new Regulations and Pension Rules also came into force on 1st January 2015.
A new set of Regulations and Pensions Rules have been issued under the Act to supplement the legal framework for the licensing and regulation of Retirement Schemes (both Occupational and Personal), Retirement Funds and Service Providers related thereto, as well as for the requirement of recognition for persons carrying on back-office administrative services.
Persons currently registered under the Special Funds (Regulation) Act have until 31st December 2015 to comply with the new Act. Until such time as a licence is granted by the Malta Financial Services Authority (MFSA) under the Act, the Retirement Pensions (Transitional Provisions) Regulations 2014 provide that such persons will continue to be governed by the provisions of the Special Funds (Regulation) Act.
Developments of Retirement Schemes in Malta
HM Revenue & Customs has recently confirmed that Retirement Schemes established in Malta and regulated by the MFSA may be considered on a case by case basis for Qualifying Recognised Overseas Pension Schemes (QROPS) under UK Law, thus allowing the transfer of pension rights into the scheme without a UK tax charge.
A QROPS is a pension scheme set up and regulated outside the UK, recognized by HMRC as broadly equivalent to a UK Registered Pension Scheme. It allows persons who are no longer resident in the UK to transfer pension benefits accumulated in a UK recognised pension scheme to a recognised pension scheme outside the UK. This can give many employers and their employees more tax flexibility on these benefits, provided certain requirements are met. The same advantages apply to individuals no longer resident in the UK who receive benefits from their personal pension schemes.
Pension Solutions for Multinationals
For major multinationals, administering pension schemes in multi jurisdictions can be an expensive and highly complex process. This presents a key opportunity to introduce an international pension solution that enables multinationals to use Malta as a centre from which to manage and centralise their retirement benefits schemes and consolidate their employee pension schemes benefiting from greater economies of scale, while achieving sizeable cost savings by operating from one jurisdiction under one regulatory regime.
As a member of the EU Malta provides a pan European platform that is secure, well regulated, and innovative. Backed up by a professional support structure and experienced skills base, Malta's anticipated new pensions legislation is widely expected to be well received internationally and industry insiders are keeping a sharp focus on the provision of international pensions as the next major development in the jurisdiction's financial services offerings.
Benefits of Pensions and Retirement Schemes in Malta
- Retirement schemes and their administrators are licensed and fully regulated by the Malta Financial Services Authority (MFSA)
- Thanks to Malta's EU membership, companies established in other Eu member states can sponsor occupational schemes established in Malta
- Fees for the administration and management of the scheme are comparatively lower than in other jurisdictions
- A strong regulatory framework and the MFSA ensure the integrity of the plan and peace of mind for the scheme's members
- Legislation allows for a number of customised structures that suit the requirements of individuals or international businesses
- Malta satisfies the current HMRC requirements, enabling Malta retirement schemes to self-certify in terms of the UK's QROPS legislation