Malta Pension Rules – Adviser Updates

The Malta Pension Rules have been revised and this update provides you with further information on these changes ahead of implementation. There are still ongoing discussions with the MFSA and if anything changes we will update you accordingly.

Key revisions:

1. De-Risking Notification requirements

The changes in the Pension Rules focus on encouraging Members approaching their retirement to seek professional advice on de-risking their investments and preserving the value of their pension pot throughout their retirement.

In compliance with this requirement, all Retirement Scheme Administrators (‘RSAs’) in Malta are required to issue communications to Members, within five years of their intended retirement age, which:

• Prompts Members to seek professional advice regarding de-risking
• Communicates clearly on the rationale and importance of de-risking.

Here at Momentum Pensions we will commence writing to all Members in scope early next week. This will include Members within five years of the intended retirement age provided to us previously by the member. We will also write to members who have passed their intended retirement date but have not yet taken any benefits with Momentum.

2. Additional Investment due diligence on a risk-based approach

RSAs are now also required to carry additional risk based due diligence for any Malta Members invested in non-standard or “vanilla” type investments. We currently understand from the MFSA that this requirement would not apply to Members invested in funds, listed equities, bonds or similar type investments.

For non-vanilla investments, RSAs are expected to liaise with the member’s Investment Adviser or Investment Manager directly. The Rules require us is to obtain prescribed information which was gathered as part of the suitability assessment carried out by the Adviser and is reasonably relevant to the investment.

Given the quality of our Momentum Malta Retirement Scheme’s investment portfolio, we do not anticipate this will have any significant impact. However, in the event we identify any such investments, we will write to the appointed individual adviser accordingly.

The information provided in this article is for general informational purposes only and does not constitute financial, investment, legal or tax advice or any form of professional advice. We encourage you to seek advice from a qualified professional for any specific needs or concerns you may have. We make no warranties or representations about the accuracy, completeness, or reliability of the information provided in this email. Where links are provided to other sites and resources of third parties, these links are provided for your information only.