Legal Notice 228 of 2017 was introduced in September- what is this and what does it mean for Maltese businesses? 

Richard: As of January 1st, 2017, small businesses, medium businesses, and international corporations operating in Malta will have the chance to offer their employees what is known as a voluntary occupational pension scheme. Previously, this has not been available to Maltese residents, and they are the first set of tax measures introduced nationwide that incentivise occupational pensions in Malta.

Chantal: In other words, Maltese employees can now enjoy the various benefits that an occupational pension scheme brings such as tax benefits, saving without paying income tax, and of course, the fact that they will have an additional pension to supplement any state pension that has accrued. Once the change in legislation was announced in September 2017, we were approached by several Maltese companies, to help them set up and administer their occupational schemes, and business has taken off from there.
 

So where do Worldwide Pensions come in?

 
Richard: I have been working in insurance and pensions since the early 90's and after working in various large, multinational firms, and working my way up, I decided there was a gap in the market and I wanted to set up on my own. During the mid-2000's, there was a big scandal in Holland concerning occupational pensions. Large companies were paying into schemes, but around 50% was being taken by the insurance company as profits. This angered me, and I decided I wanted to be able to offer companies a way to manage their own policies, rather than putting their trust, and money in the hands of large, profit-driven insurance companies. I set up Worldwide Pensions in 2009 and was granted a license by the MFSA in 2011. From there we have grown to offer our international clients a range of scalable, and tailor-made products that allow them to retain control over their occupational schemes.
 
Chantal: I have always believed that if you want to change the market, you must change it yourself. We saw so many flaws in the existing occupational pensions market, and the fact that it was being abused so openly was incredibly frustrating. The idea behind Worldwide Pensions is to assist and administer the schemes that the employer wants, and to help them create something that is the best fit for them, without handing over half of the contributions as profit for the insurer. We offer international, scalable, and adaptable schemes that can be rolled out in any country, and for any size business.
 

But what IS an occupational pension scheme?
 
Richard: An occupational pension scheme is set up by the employer and rolled out throughout the company. It is an employee benefit where both the employer and employee pay a certain amount into the scheme every month. This is then available as a partial sum at the age of 50, or as an addition to any state pensions, at the age of retirement. It offers employees a way to save without paying tax twice, and it offers employers a way to attract top talent, and retain their existing staff.
 

The government of Malta provides each employee with a pension based on their social security contributions- why should employers look to roll out an occupational pensions scheme?
 
Richard: Of course, every employee pays their social security contributions, and part of this goes towards an individuals pension when they retire. Unfortunately, with rising costs of living across Europe, many are concerned that the state pensions will not cover their costs once they reach retirement age. An occupational scheme also gives the employee the chance to save without paying income tax on it twice- your contributions are only taxed once, so unlike various other saving schemes, you are not being taxed when you contribute, and when you withdraw. In other words, the rate of taxation for an occupational scheme is 15%, whereas with a personal scheme it is 30%. Individuals that have an occupational retirement scheme can also avail themselves of the opportunity to take out a 30% tax lump sum, at the age of 50- a benefit which is provided for by the Maltese regulatory framework.
 
Chantal: When it comes to employer benefits, there are almost too many to mention. We know that staff retention is a big problem in Malta with an average staff turnover rate of 40%- one of the highest in Europe. When a member of staff leaves, it costs around 150% of their annual salary to process the departure and find a replacement. This is a huge financial burden on employers, and we have found that by implementing our occupational pension schemes, we have reduced our clients staff turnover rate by an average of 60%. Making your employee feel valued, offering them benefits relating to their job, and making them feel like they are more than just a number are all integral parts to retaining staff, and ensuring that your staff give 100% every day. Implementing an occupational pensions scheme in your company is a form of social welfare, and a reward for your employee's loyalty and hard work. It can form a part of your CSR, and it can also form a part of an overhaul of your HR structures, which can also save you a lot of money. In the long-term, a good quality occupational scheme can lead to a full revamp of the employee benefits package, and most importantly, it will save you money, increase employee satisfaction, and reduce your staff turnover.

 

What type of businesses should consider an occupational scheme?
 
Chantal: Every business! We offer three different types of occupational retirement scheme, meaning that regardless of sector, type, and size of your company, we have a solution for you. We can offer a tailor-made scheme that is individual to one employer and this is typically used for larger companies that have their own specific set of requirements. Then we offer multinational pensions which is typically for companies that operate in multiple international locations, and then we offer a scheme tailored for the needs of SMEs. We have a product for every kind of business, and every kind of requirement and we pride ourselves on being able to offer a product to suit everyone.
 
Richard: Our products offer clients to every sector. We have consulted for Booking.com but also have clients that work in construction and manufacturing as well. iGaming companies tend to look to offer this type of scheme as they have a big focus on providing the ultimate in employee benefits, but we fee that in such a competitive recruitment market, other sectors need to seriously bolster their employment packages to both retain, and encourage new talent. If Malta wants to bring top-quality foreign staff here, and doesn't want to lose its local talent to abroad, then businesses need to start offering perks that their international competitors already do as a standard.

 

And lastly, what enticed you to Malta?
 
Chantal: We wanted to change the market in The Netherlands and when the legal bill was announced in September, we saw a great opportunity to offer a product that we have years of experience providing in the rest of Europe, to the local market. We wanted to adopt a model where companies can set up their own fund and be flexible with their service providers. Malta offers a welcoming regulatory regime, the authorities are business and forward thinking, and as an EU Member State, it allows us to administer schemes throughout the whole EU. In addition to that, everyone speaks and works in English, we have a great team of Maltese directors, and local staff at our office in Sliema, and of course, the weather is considerably better than many other places in Europe!
 
Richard: Whilst we know that this is a new concept for many Maltese companies, the response we have had so far has been very positive. Employers are desperately looking to improve staff retention and to be competitive in an increasingly global market, and this is one cost effective way to do it. Our Directors include Maltese lawyer Dr Adrian Camilleri, CPA accountant Karl Mallia, and the previous director of the FIAU, Dr Manfred Galdes, and we are working hard to combine their local knowledge, with our international expertise, to create a solution that works for Maltese businesses.

 

How can employers find out more?
 
Chantal: We have just launched our new website, www.wwpensions.com and we invite anyone who is interested in finding out more to check it out, or to drop in at our offices in Sliema.