Government launches public consultation on auto-enrolment pension reform

Stakeholders can have their say on a proposed auto-enrolment occupational pension scheme after the Finance Ministry launched its public consultation on Wednesday.

The scheme, designed to encourage more workers to save for retirement, would see eligible employees automatically enrolled into a pension plan unless they choose to opt out. This approach aims to boost participation while maintaining the voluntary nature of retirement saving.

Eligible employees include those between 18 years of age and those who are ten years away from their retirement age, who pay tax in Malta, work habitually in Malta, and whose job is their primary source of income.

Workers would contribute a minimum of €50 per month, deducted directly from their salary. The government will contribute up to an additional €100 per month for its public sector employees. In contrast, private sector employers will not be obligated to contribute, though they are encouraged to do so voluntarily.

The new scheme will follow a defined-contribution model, with investments managed based on an employee’s age to reduce risk as they approach retirement.

The government also plans to implement cost-capping measures and standardised information requirements to ensure transparency and value for money.

Employees changing jobs will benefit from pension portability, allowing seamless transfers between authorised schemes. Tax incentives are also planned for both employees and employers participating in the scheme.

The roll-out is expected to begin in the public sector in the last quarter of 2025, with an extension to the private sector set for six months later.

The consultation period will run for one month. During this time, stakeholders, organisations, and members of the public are invited to submit feedback and proposals via the Finance Ministry’s website. Once the consultation concludes, the government will publish a report summarising the feedback received and outlining any revisions to the scheme.