Written by Economy, Home, News, Politics, Technology, Trade, World and Chronicle

Solutions for retirement

The GWU wants to ensure its members maintain the quality of life they deserve upon retirement

Pensions reform since 2004 saw the government incentivising voluntary private pensions so that persons could plan and save to improve their well-being during retirement. 

The voluntary personal private pension was finally introduced in 2015 while the voluntary occupational retirement pension was introduced in 2017. A person saving in a voluntary personal pension receives a 25% credit on income tax paid annually up to a maximum of €3,000 annual contributions to their pension scheme.

Should their employer have a voluntary occupational retirement scheme, they can also invest in this and benefit from an additional 25% credit on a maximum of €3,000 annual contributions.

Acknowledging the critical nature of the gap between income earned in employment and income from a State pension and how this is likely to affect one’s quality of life, the General Workers’ Union, traditionally focused on safeguarding employment rights, compensation and benefits, broadened its mandate.

It now seeks to ensure that its members maintain the quality of life they deserve upon retirement. This proactive stance is crucial, recognising that many people view retirement as a distant future and often delay retirement planning until it is too late to accumulate sufficient savings.

In response to this challenge, the GWU embarked on a project to identify effective strategies to support its members’ retirement planning.

A survey among its members revealed a strong inclination to trust a pension service provider who enters into a strategic relationship with it.

With this insight, the GWU initiated a meticulous process to select a pension service provider that could offer its members advantageous terms. These terms aim to maximise the value members receive when they begin to de-accumulate their private pension fund after 61. 

The GWU objectives were ambitious yet clear: to secure a scheme that benefits its members and offers competitive terms to employers with collective agreements with the GWU who wish to introduce a voluntary occupational retirement pension scheme.

The partnership with APS Bank is a testament to the GWU’s forward-thinking approach to labour welfare– Josef Bugeja

This initiative reflects a deep commitment to addressing the broader implications of the union’s members as they age, recognising the essential role of adequate retirement planning in ensuring a dignified and secure retirement.

In October 2023, the GWU’s efforts culminated in signing a memorandum of agreement with APS Bank. This agreement marked the launch of an innovative partnership, introducing an occupational pension scheme for employers under collective agreements with the GWU and a personal pension scheme for its members. 

This collaboration represents a significant milestone in the union’s mission to extend its protective reach beyond the working years of its members, directed to assist them in facilitating a transition to retirement that is not only seamless but also preserves the dignity, independence and quality of life that members have worked hard to achieve.

The partnership with APS Bank is a testament to the GWU’s forward-thinking approach to labour welfare. By proactively addressing the retirement planning needs of its members, the GWU sets a precedent for other trade unions, highlighting the importance of evolving union mandates to meet the changing needs of the workforce.

As Malta’s population ages, such initiatives will be instrumental in ensuring that retirees can enjoy their later years without the financial insecurities that often accompany retirement, thereby contributing to a more resilient and supportive societal framework for Malta’s elderly population.

The union voluntary personal pension and occupational retirement pension schemes with APS Bank will be launched in the coming weeks.

This is the last of three articles published on pension reform. 

Josef Bugeja is general secretary of the General Workers’ Union.