The challenges faced by Maltese financial institutions to provide the third pillar pension plan in Malta

Abstract

The welfare system is embedded within Maltese culture. The current trend of aging population coupled with decreasing birth rates, pressured Maltese policy makers to analyze the Pay-As-You-Go pension system, and try to find a more sustainable plan for future pension schemes in Malta. The launch of the voluntary Third Pillar pension plan was a monumental step forward for pensions in Malta. The aim of the dissertation is to discover the challenges faced by Maltese Financial Institutions which try to provide the Third Pillar Pension plan to citizens. Following extensive research, a brief overview of the current position in Malta, the worldwide perspective on pensions, and the need for reform were discussed. Furthermore, a review on the history of pensions in Malta and the various reforms done was also included. The research was then focused on what the third pillar includes and what financial institutions provide that is, pension funds. The interviews and surveys done to collect qualitative data aim to understand: the new reform, the challenges faced by financial institutions, and society`s understanding said issue. Thus, the various findings revealed from interviews and survey results, determined the challenges faced by Maltese Financial Institutions, the reform per se and society`s perspective. The conclusion of the dissertation aims to analyze the various challenges that hinder Maltese Financial Institutions` work when it comes to providing the third pillar pension plan; and to recommend suggestions on how regulation and the institutions` business policy should be amended to allow for less difficulty when providing the pillar.