The Insurance Association Malta on Thursday welcomed the government's commitment to roll out a workplace pension scheme for public sector employees and matching its workers’ contributions up to €100 a month.  

However, it urged the government to be more ambitious and lay down the blueprint for mandatory workplace pensions with a voluntary opt-out, while introducing a transitory framework for employers to contribute to such schemes.

"On Monday, Finance Minister Clyde Caruana said employees, or those who changed jobs, should be allowed to invest in an occupational pension plan," it said in a statement.

"Although this is a step in the right direction, it is still unclear from the wording used whether the workplace pensions will apply to existing or new employees and in the case of the latter, whether such schemes would apply across the board or certain segments, such as by age.

[The minister] did, nonetheless, urge private and public sector workers to take part where schemes were available and insisted that while employers were not obliged to match employees’ contributions, they were encouraged to do so and top-up employees’ contributions."

The association warned that Malta had lost 20 "precious years" with very little progress showing for the time lost.

Now that more and more trade bodies and unions are in agreement and would favour the introduction of such auto-enrolment workplace pensions with a voluntary opt-out, the authorities should be bold enough to introduce such measures without further ado, it added.

“Since the budget speech understandably lacks any detail, we encourage the authorities to consult the relevant stakeholders to ensure a successful roll-out of mandatory workplace pensions with a voluntary opt-out.”

IAM said it looked forward to learning more about the government’s mechanisms to roll out the schemes announced in the budget and hoped it would be able to contribute around the discussion table with proposals.

“In a country, which was so far, is totally dependent on the safety net provided through state pensions, understanding the pros and cons of pension products helps people make an informed decision,” the association added.