Consumers | Pensions

Pensions

A pension is a way of saving money during your working life so you can have an income once you retire. It helps support you financially when you stop working and no longer receive a regular salary.

When you retire, your employment income usually comes to an end, but your everyday expenses continue. A pension helps cover living costs and support a comfortable lifestyle in retirement.

While the State Pension provides a basic level of income, it may not be enough to maintain your lifestyle. A personal pension can help bridge this gap by offering the possibility of an additional source of income later in life.

Private pension plans are voluntary and can be set up as:

  • Occupational Pension Plans: arranged by an employer
  • Personal Pension Plans: arranged by individuals

The Malta Financial Services Authority (MFSA) is responsible for authorising and supervising private pension providers in Malta.

Planning for Retirement

Planning ahead can help build financial security and provider greater confidence about future retirement needs.

State Pension (Pillar I)

The State Pension provides a basic level of income in retirement and forms the foundation of Malta’s pension system.

Occupational Pensions (Pillar II)

Occupational Pensions are retirement schemes arranged by employers to provide an additional source of income alongside the State Pension.

Personal Pensions (Pillar III)

Personal pensions are voluntary retirement savings plans that can help provide an additional source of income later in life.

Frequently Asked Questions

This section gives you easy access to commonly-asked questions about pensions aspects.

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Taxation of Pension Plans

Question: Who should I contact for tax-related queries concerning my pension plan?

For any tax-related questions regarding your pension plan, please contact the Malta Tax and Custom Administration (https://mtca.gov.mt/), which is the Authority responsible for collecting taxes and administering Malta's tax system.

Beneficiaries & Death Benefits

Question: What happens if I die before reaching retirement age?

The pension plan allows its members to nominate beneficiaries. In the unfortunate event of a member's demise, the pension plan will be surrendered and paid to the nominated beneficiaries. In this regard, please consult the terms and conditions of the product. Members are encouraged to review and update their beneficiary nominations regularly to ensure these reflect their current wishes.

Transfers & Withdrawals

Question: Can I withdraw my pension to pay for unplanned expenses?

No, you cannot withdraw your pension funds to pay for unplanned expenses, unless you have reached your retirement age. Pension savings are intended to provide income during retirement and are generally inaccessible until you reach retirement age.

Question: I have more than one pension plan. Is it possible to combine all my pensions into one?

Yes, it is possible to consolidate all your pension plans into one plan and this would also make it easier to manage. Having said this, before consolidating all your pension plans, make sure you know the risks and costs involved.

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