The prospects of compulsory implementation of occupational retirement schemes in Malta : a socio-legal perspective

Abstract

This thesis aims to address the steadfast debate of pension reform resultant from an array of demographic, social and economic transitions throughout the globe. Ultimately, expenses of maintaining public pension systems increased to such a degree that Governments found themselves in the predicament of having pension systems traditionally financed on a Pay-as-you-go basis, deemed unsustainable. The trend in addressing this impasse involves the move towards introducing fully funded private pension schemes with the objective of alleviating the burdens encountered by public pension schemes. Starting with a brief history of the origin and purpose of pension systems, this thesis highlights the main constituents of the abovementioned plight. Since Malta is not shielded from these societal changes, the debate of pension reform is also prevalent in the local scenario. This issue is addressed firstly by analysing the current pensions system in Malta, by drawing a timeline starting from its introduction and the relevant amendments thereto which have led to its development. From this analysis it will be deduced that notwithstanding the reforms that have taken place locally, to date there has not been the implementation of Second Pillar Pensions in Malta. Following this, the thesis provides an in-depth analysis of Second Pillar Pensions, particularly Occupational Retirement Schemes. This analysis pinpoints the salient aspects of these complementary pensions varying from their legal structure and organisation to the concerns that have arisen in foreign countries where these pension plans have already been implemented. Once again, the focus is shifted to the local scenario by highlighting the recommendations for implementation as presented by appointed Pensions Working Groups in 2004 and 2010. The arguments that have been put forward against including these pensions in Malta’s reform programme are also considered. Finally, the thesis evaluates the possibility of a prospective implementation of Second Pillar Pensions in Malta whilst scrutinizing the manifest issues previously discussed throughout the previous sections of the thesis.