With a view of incentivising individuals to invest in private pension and to encourage the provision of adequate revenues during retirement, the Minister for Finance, Prof. Edward Scicluna recently launched the Third Pillar Pension Scheme, referred to as the Personal Retirement Scheme. This scheme is supplemented by another scheme, namely the Individual Savings Account.
Both schemes are optional and are intended to encourage low-income earners to save more for their retirement and safeguard their future quality of life. They were launched following the establishment of a regulatory framework for private pensions by the Malta Financial Services Authority.
The Third Pillar Pension Scheme gives Maltese residents the opportunity to save for a pension by means of private pension packages provided by financial institutions such as banks and life insurance companies. Hence, such fiscal incentives will be tied to private pension products offered by financial institutions.
Minister Prof. Scicluna stated that “The introduction of the Third Pillar Pension Scheme is the result of a detailed study and a long consultation process carried out with the stakeholders”.
The first scheme, namely the Personal Retirement Scheme, is the provision of an annual tax credit of €2000, with benefits of up to €300 per family. The benefit payment would start to accrue not earlier than the age of 50, or later than the age of 70.
The second scheme, namely the Individual Savings Account, provides families with the opportunity to open a tax exempt savings account with up to €2000 per year per couple invested in such an account. Account holders can withdraw funds from these accounts at any time.
For further information in relation to these schemes, you may contact us on [email protected]