Bank of Valletta plc’s (BOV) Manager of Business Generation and Support at Wealth Management Claire Falzon brought workplace pensions to the forefront during the latest Malta Hotels and Restaurants Association (MHRA) quarterly seminar held on 22nd July.

This comes after BOV built a long-term partnership with MHRA through which it supports MHRA and its members by sharing industry insights, analysing financial instruments and identifying how they can benefit MHRA’s members and their employees.

Over recent years, the profile of workplace and private pensions has increased significantly. Through workplace pension schemes, employees have an additional pension plan to the state pension people are accustomed to. Both workplace and private pensions form “the perfect tool” to supplement the state pension.

Workplace pensions offer important benefits to both employers and employees, as plans start from a nominal monthly amount of €100, to which both employers and employees can contribute. The employer sets up the scheme and defines how it will work, including the parameters determining the contribution the company will be making towards the scheme.

This spells important benefits for employers, even from a taxation perspective, since workplace pensions qualify for tax incentives of around 25 per cent up to the ceiling set by Government. Under present legislation, firms can enjoy a tax credit of up to €750 per employee every year.

Similarly, employees are eligible for a tax credit equivalent to their contribution for the workplace pension, over and above any tax credits they already enjoy under a private pension scheme.

“Workplace pensions are ideal instruments that ensure we maintain our current standard of living once we retire,” Ms Falzon explained.

While it might not always be easy to “establish the gap between the state pension and amount required to maintain one’s desired lifestyle,” that is “precisely why it is critical to take the first step and start saving and investing on a regular basis,” she added, highlighting the necessity to factor in variables like inflationary costs and personal ambitions.

By offering workplace pension schemes, companies increase their competitiveness, Ms Falzon remarked. “In a world where companies are competing to attract and retain talent, setting up and contributing towards a workplace pension scheme can be a game changer, giving the employer a decisive competitive advantage,” she said.

While planning for the future “is always a daunting task, it does not have to be,” as financial partners can make a significant difference in this regard. BOV is offering its support to companies interested in setting up pension schemes, as well as to individuals who are seeking to plan ahead for their future.