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Pension plans in Valletta


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State Pension Plan

The age of eligibility for State contributory pensions in Malta is generally 65. Due to recent pension reforms, retirement age varies according to date of birth and gender:

  • Born 1951 or earlier: Retire at age 61 (male) or 60 (female)
  • Born 1952-1955: Retire at age 62 (male and female)
  • Born 1956-1958: Retire at age 63 (male and female)
  • Born 1959-1961: Retire at age 64 (male and female)
  • Born 1962+: Retire at age 65 (male and female)

There are two State pension rates in Malta: a flat rate for individuals with a low pensionable income, and a rate of 2/3 (two-thirds) of an individual's pensionable income for all other persons (contributory pension).

Eligibility

You are eligible to receive a State (contributory) pension in Malta if:

  • You have at some point registered under the Maltese Social Security scheme and
  • Following your 18th birthday, your have been employed with a yearly average of 50 weeks of contributions over a period of
  • Thirty years if born before 31 December 1951
  • Thirty five years if born between 1952 and 1961
  • Forty years if born on or after 1 January 1962

You are entitled to receive a State pension in Malta regardless of if you are still working after you reach retirement age. To claim your State pension in Malta you must apply within 6 months of reaching retirement age.

Pension Amounts

State pension rates depend on your previous earnings and martial status. Retirees with dependent spouses get higher pension payments. Pension payments top out at €220 per week, based on a maximum pensionable salary of approximately €21,000.

Application

To apply for a State pension in Malta you must provide:

  • A completed application form
  • A marriage certificate (if applicable)
  • If the claimant is in recept of a Service (private) Pension from a former employer, they must provide a document indicating the original amount (amount as on first payment) of this payment. This must be attached to the application form.

The Social Security Decision informs the applicant in writing about the outcome of their application. Pensions are normally deposited in bank accounts as specified by the applicant on their application form.

Company Pension Plan

Company pension plans in Malta are also referred to as service pensions. There are different types of company pension plans or service pensions available. Company pension plans usually require you to make a regular contribution based on a percentage of your salary. You can receive a tax relief on the money paid into this pension fund.

There are generally two types:

  • Salary related
  • Money purchase scheme

Salary Related Scheme

Under a salary related scheme, the amount of a company pension fund is based on the number of years of employment and the number of years you have been in the scheme.

Money Purchase Scheme

Under a money purchase scheme, the employer normally matches the employee's retirement contributions, up to a certain monetary amount or percentage.

Claiming Benefits

Procedures for claiming your service or company pension vary according to your scheme. You can normally obtain a forecast of your earnings, when you will be able to retire, survivor's benefits, etc., from the Human Resources staff at your workplace.

Private Pension Plan

Since pensionable income in Malta is capped, many chose to compliment the State pension plan with a private pension plan.

Private pension plans can be obtained through local banks or insurance companies. Such plans are normally offered to individuals ages 18 to 65, and can be individual or joint contribution plans. Minimum terms for private pension plans in Malta are normally 10 years.

Retirement schemes established in Malta and regulated by the Malta Financial Services Authority (MFSA) may be recognized by Her Majesty's Revenue and Customs in the UK (HMRC) as Qualifying Recognised Overseas Pension Schemes (QROPS).

Income of a retirement scheme or fund that is licensed in Malta, including capital gains, is exempt from tax under the Malta Income Tax Act.

Expat

Expats benefit from the State pension plan if their home country has a social security agreement with Malta. Malta has entered into social security agreements with other EU states, Canada, Australia, and Libya.

If your home country does not have an agreement, you must make your own pension arrangements.

Making Contributions while Abroad

If you are a citizen from an EEA country (EU country, Norway, Lichtenstein, Switzerland, and Iceland) you can pay into State pension schemes will working or living abroad.

Depending on the length of your expatriation, you can pay into your home country's State plan, or split your contributions between your home and adopted countries.

If you are from a non-EEA country, procedures for making pension contributions while living abroad vary from country to country. You should contact your home or resident country's State Pension or Social Security office for details on contributing to State pensions while abroad.

Collecting Pension while Abroad

EU citizens have the right to retire to another EU Member State. If they chose to do so, they need not worry about missing out on their pension entitlements. This also applies to citizens of Norway, Lichtenstein, Iceland (EEA) and Switzerland.

The EU's coordination rules ensure that pension contributions made in different countries are paid to people according to each state's pensionable age. Pensions are calculated according to the contributor's insurance record in each EU country. The amount received from each of these countries will correspond to the length of a person's social security coverage in each EU country.

EEA states will calculate your pension payments on your behalf, and make the correct payments to you. In this situation, you request pension payments in the country in which you are a resident at the time of application.

Update 26/05/2013


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