Occupational Pension Schemes: A Guide for Employers and Employees

Planning for the future is important, especially when it comes to financial security. Whether you are an employer looking to attract and retain talent or an employee thinking ahead to retirement, occupational pension schemes can play a key role. A recent budget announcement in Malta has made these schemes even more relevant: the Finance Minister announced that all employers will be expected to offer them to their employees. This means it is a great time to understand how these schemes work and why they matter.

In this guide, we will break down what occupational pensions are, highlight the unique advantages of the APS Occupational Pension Scheme, and provide insights on how it can contribute to a rewarding retirement.

Changes in Malta: Mandatory Occupational Pension Schemes

As announced in Malta’s latest budget, the legislation will require all employers to offer their employees the option to join an occupational pension scheme. To encourage participation, the government will match contributions made by public sector workers up to €100 per month.

While private sector employers will not be required to contribute, they will be expected to at least offer the option. Employees, however, can choose to opt out. For businesses, this is an opportunity to enhance employee benefits and position themselves as Employers of choice who care about their teams’ financial well-being.

Understanding Occupational Pension Schemes

Occupational pension schemes provide a crucial supplement to state-funded pensions, significantly enhancing employees’ financial security during their retirement years. In Malta, where demographic shifts are leading to an aging population and extended life expectancies, the importance of robust pension schemes is particularly critical. These schemes benefit individuals, but they also help the economy by ensuring retirees continue to have spending power.

Occupational pension schemes can be tailored to different industries and company sizes. They also offer tax benefits for both employers and employees while improving job satisfaction and retention.

Why Employers Should Offer an Occupational Pension Scheme

Setting up an Occupational pension scheme, like the APS Occupational Pension Scheme, can benefit businesses in several ways:

• Boost the company’s appeal: an occupational pension scheme makes a company more appealing to job seekers and valued employees.
• Enhanced corporate image: companies can enhance their corporate image by demonstrating social responsibility and commitment to long-term employee welfare.
• Improved workforce morale: offering an occupational pension scheme can boost workforce morale and job satisfaction, as employees feel more secure about their future.
• Foster employee loyalty: employees who feel financially safe are often happier and more engaged at work.
• Tax efficiency: employers can benefit from various tax incentives and rebates.
• Strategic financial planning: an occupational pension scheme helps businesses manage their long-term financial liabilities more effectively by planning for retirement benefits in advance.

How Employees Benefit from an Occupational Pension Scheme

Since occupational pension schemes offer a host of benefits for businesses and employers, it is evident that employees also reap numerous advantages, such as:

• Enhanced financial security: additional pension savings provide a more stable retirement income.
• Tax benefits: participants may be eligible for tax advantages, making saving even more rewarding.
• Enhanced retirement readiness: having extra savings ensures employees can enjoy their later years without financial worries.

Why Choose APS Bank for Your Occupational Pension Scheme

Opting for the APS Occupational Pension Scheme offers a range of benefits:

• Flexible contribution options: our scheme stands out for its flexibility compared to others in the market. It offers the possibility to increase, pause, or stop contributions according to personal financial circumstances, all without penalty.
• Professionally managed investments: benefit from diverse investment strategies managed by professionals, which can potentially increase the growth of their pension funds.
• Transparent monitoring system: a clear and easy-to-understand system with 24/7 online access allows employees to monitor their investments continuously.
• Annual health check-ups: enjoy up to €50 annually for dental check-ups or eye exams.
• Mental health support: engage in regular online mental health sessions conducted by the Richmond Foundation, aimed at promoting psychological wellbeing.
• Discounted gym memberships: stay active with discounted memberships at participating gyms, helping you keep fit at a lower cost.

This comprehensive package not only supports employees’ physical and mental health but also adapts to their financial capabilities, making retirement planning stress-free and tailored to your needs.

Get Started with APS Bank

Setting up an occupational pension scheme with APS Bank is straightforward. Interested employers can consult our advisors, who will tailor the occupational pension scheme to fit your company’s needs.

Ready to start? For more information, browse our offerings online or fill in the form below to contact us today. Our team is ready to help you create a benefits package that works for your business and your employees.

This information shall not be deemed as investment, tax, or any other form of professional advice. You should consult your independent legal, investment or other advisors to ensure that any decision you make is suitable for you with regards to your specific circumstances and financial situation.

Approved and issued by APS Bank plc, APS Centre, Tower Street, B’Kara BKR4012 (as distributor of the scheme) and Praxis PES Malta Ltd (as the Retirement Scheme Administrator). Praxis PES Malta Limited is authorised by the Malta Financial Services Authority to act as a Retirement Scheme Administrator to Retirement Schemes registered under the Retirement Pensions Act, 2011.  APS Bank plc is regulated by the Malta Financial Services Authority as a Credit Institution under the Banking Act 1994 and to carry out Investment Services activities under the Investment Services Act 1994. The APS Occupational Pension Scheme is licensed and regulated as an occupational retirement scheme by the Malta Financial Services Authority in terms of the Retirement Pensions Act (Chapter 514 of the Laws of Malta). Terms and conditions apply and are available on apsbank.com.mt/terms-and-conditions and  apsbank.com.mt/occupational-pension. There is no statutory provision for compensation in the case where a retirement scheme is unable to satisfy the liabilities attributable to it and the license of the Scheme is not an endorsement by the MFSA of the Scheme’s financial performance.