Pensions

Given Malta’s ageing population, priority has been given to measures devised to strengthen the sustainability and adequacy of pensions.

The reform got underway in 2006 with the raise of retirement age from sixty-one (61) years for men and sixty (60) years for women to sixty-five (65) years for both genders. Concurrently the contributory period has also been increased to forty (40) years while ten (10) years later it increased by another year for persons born in 1969 and onwards.

The contributory period for persons born in 1976 or after, in 2025 was extended by one year to 42 years.  The measure emanated from the Pension Action Plan, drawn up in 2021/2022, and is not intended to change the retirement age of persons born in 1976 or after, It is solely designed to underpin pension sustainability and aims at retaining a fair balance between contributions and benefits across generations.

In terms of sustainability, since 2016 adopted measures have been primarily designed to incentivize pensioners to remain active in the labour market beyond statutory retirement age and to ensure that, over time, a fair balance would be kept between contributions and benefits across generations. Employees in the private sector opting to remain in employment, now have the option to defer their retirement pension. In doing so, they stand to gain annual percentage increases in their pension rate, depending on how long they remain in employment (a maximum of 23% if pension is deferred for 4 years). In 2019 the incentive was extended to employees in the public sector as well.

In terms of adequacy, manifold measures have been implemented since 2016 to increase pensions across the board, to improve the living standards of senior citizens and ward them off the risk of poverty.