Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215667 
Authorgroup: 
Middle East and North Africa Human Development Group (MNSHD), World Bank
Year of Publication: 
2011
Series/Report no.: 
Pensions Strategy Group (Malta) Research Series
Publisher: 
Central Bank of Malta, Valletta
Abstract: 
In 1979, Malta adopted a universal contributory Social Security scheme with wide coverage to employees and self employed, complemented by a noncontributory scheme for specific groups or categories excluded from the general contributory regime. Demographic changes, however, have revealed a lack of sustainability beginning in the early 2000s and the serious need to revisit the Maltese pension system to ensure that it can provide adequate and fiscally sustainable benefits for workers in the future. Since 2003, the World Bank has been providing technical assistance to support the efforts of the Maltese government to introduce a comprehensive pension reform program with the primary objective of addressing the lack of sustainability of the pension system. A report produced in October 2003 showed that parametric reforms were needed to shift to a sustainable system but the changes required would have the effect of significantly compromising the level of pensions. However, since mandatory pension contributions were capped at a low ceiling (estimated at 13% of the average wage bill at that time), the report recommended the possibility of introducing a funded second pillar by adding 2 percentage points of contributions from both employees and employers and gradually increasing this to 5 percentage points by 2020 to provide adequate income replacement. (...)
Document Type: 
Research Report






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