Plan­ning for the fu­ture

The Malta Business Weekly - - NEWS -

A health­ier diet based on ar­ti­fi­cially syn­the­sised foods and im­prove­ments in med­i­cal care will see life ex­pectancy rise over the next four decades. Ac­cord­ing to Euro­stat data this will see the num­ber of 60+ per­sons dou­ble from the cur­rent 11% by the year 2050. This was stated by Mark Vella, head Busi­ness and Mar­ket­ing at BOV As­set Man­age­ment dur­ing the sec­ond quar­ter sem­i­nar or­gan­ised by the MHRA.

De­spite the in­creases in state pen­sion age, it is ex­pected that the pen­sioner pop­u­la­tion will con­tinue to rise. In fact, the num­ber of work­ing age peo­ple per pen­sioner is ex­pected to fall and by 2050 (Euro­stat data) there will be two peo­ple of work­ing age for ev­ery per­son of pen­sion­able age. In this sce­nario, al­ter­na­tive pen­sion ar­range­ments, out­side the state pen­sion, are ur­gently re­quired.

Last year the Mal­tese Gov­ern­ment in­tro­duced the Vol­un­tary Oc­cu­pa­tional Pen­sion Schemes Rules which came into ef­fect on 1 Jan­uary 2017. Gov­ern­ment also in­tro­duced a num­ber of fis­cal mea­sures to make these pen­sion schemes at­trac­tive for both em­ploy­ers and em­ploy­ees.

An Oc­cu­pa­tional Pen­sion Scheme is set up by the em­ployer and both the em­ployer and em­ployee can con­tribute an amount into the pen­sion scheme on a reg­u­lar ba­sis. Pen­sion ben­e­fits will sup­ple­ment the state pen­sion, at re­tire­ment age. Be­sides the tax ben­e­fits, an Oc­cu­pa­tional Pen­sion Scheme will also help em­ploy­ers re­tain their ex­ist­ing em­ploy­ees.

It is im­por­tant to note that Oc­cu­pa­tional Pen­sion Schemes re­quire a sub­stan­tial amount of re­sources and par­tic­i­pants to run suc­cess­fully. Vella sug­gested that an um­brella as­so­ci­a­tion could be a pos­si­ble so­lu­tion for the MHRA where the mem­bers of the as­so­ci­a­tion will have the op­por­tu­nity to plug into the pen­sion scheme for the ben­e­fit of their em­ploy­ees.

Vella ended his pre­sen­ta­tion by quot­ing War­ren Buf­fet, a well known Amer­i­can busi­ness man, who is widely con­sid­ered to be the most suc­cess­ful in­vestor world­wide. Vella ad­vised that all of us have to re­flect on what Buf­fet says “dif­fer­ent peo­ple un­der­stand dif­fer­ent busi­nesses. And the im­por­tant thing is to know which ones you do un­der­stand and when you're op­er­at­ing within what he calls your cir­cle of com­pe­tence”.

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