Government suggests auto-enrolment of pension saving schemes, with option to opt-out

The Maltese Government has launched a public consultation on a proposed reform that would see eligible employees automatically enrolled in a new occupational pension scheme.

While enrolment would be automatic, participation remains voluntary, as individuals will retain the right to opt out.

Under the proposal, Government employees would be entitled to contributions of up to €100 per month from the Government. In contrast, employer contributions in the private sector would remain voluntary, leaving it up to individual employers to decide whether to offer additional contributions.

The scheme targets employees aged 18 and over, up to ten years before retirement age, who work primarily in Malta, pay tax locally, and rely on their employment as their main source of income. A minimum monthly contribution of €50 would be deducted directly from participating employees' salaries.

Third-Country Nationals (TCNs) would become eligible for auto-enrolment after six months of employment or upon completion of their probation period, whichever comes later.

The scheme also includes provisions to ensure portability, allowing employees to continue benefitting from their pension plan when changing jobs, also benefitting from tax incentives.

Meanwhile, self-employed individuals are encouraged to voluntarily participate in a pension plan.

The scheme is proposed to launch at the end of 2025, beginning with the public sector. It would then be extended to the private sector within six months.

The consultation will remain open for one month, during which the Government will collect feedback from stakeholders and the general public. A report addressing the feedback and outlining any changes to the proposed framework will follow.

The public consultation document is accessible here.